It turns out that the first SPAC was conceived in 1710

Charles MacKay has left us some immortal descriptions of the first of these, the famous “South Sea Bubble” of 1710.

Actually, the South Sea Company itself (which grew so large that at one point it bought up most of the national debt) was just the anchor for what happened, a giant corporation, its stock constantly ballooning in value, that seemed, to put it in contemporary terms, “too big to fail.”

It soon became the model for hundreds of new start-up offerings: Innumerable joint-stock companies started up everywhere. They soon received the name Bubbles, the most appropriate imagination could devise … Some of them lasted a week or a fortnight, and were no more heard of, while others could not even live out that span of existence.

Every evening produced new schemes, and every morning new projects. The highest of the aristocracy were as eager in this hot pursuit of gain as the most plodding jobber in Cornhill.

The author lists, as arbitrary examples, eighty-six schemes, ranging from the manufacture of soap or sailcloth, the provision of insurance for horses, to a method to “make deal-boards out of sawdust.”

Each issued stock; each issue would appear, then be scooped up and avidly traded back and forth in taverns, coffee-houses, alleys, and haberdasheries across the city. In every case, their price was quickly bid through the ceiling—each new buyer betting, effectively, that he or she could unload them on some even more gullible sucker before the inevitable collapse.

Sometimes people bid on cards and coupons that would allow them no more than the right to bid on other shares later. Thousands grew rich. Thousands more were ruined.

The most absurd and preposterous of all, and which shewed, more completely than any other, the utter madness of the people, was one started by an unknown adventurer, entitled “A company for the carrying on of an undertaking of great advantage, but nobody to know what it is.”

The man of genius who essayed this bold and successful inroad upon public credulity merely stated in his prospectus that the required capital was half a million, in five thousand shares of 100l. each, deposit 2l. per share.
Each subscriber, paying his deposit, would be entitled to 100l. per annum per share.

How this immense profit was to be obtained, he would not condescend to inform them at that time, but promised that in a month the full particulars would be duly announced, and call made for the remaining 98l. of the subscription.

Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid.

He was philosopher enough to be contented with his venture, and set off that same evening for the Continent. He was never heard of again.

If one is to believe MacKay, the entire population of London conceived the simultaneous delusion, not that money could really be manufactured out of nothing, but that other people were foolish enough to believe that it could—and that, for that very reason, they actually could make money out of nothing after all.


This is one of the many passages and charts I find in books and articles on a daily basis. They span many disciplines, including:

I occasionally add a personal note to them.

The whole collection is available here.