The panic was forgotten till Lord Macaulay revived the memory of it.  But, in fact, in the South Sea Bubble, which has always been remembered, the form was the same, only a little more extravagant; the companies in that mania were for objects such as these:—­’ “Wrecks to be fished for on the Irish Coast—­Insurance of Horses and other Cattle (two millions)—­Insurance of Losses by Servants—­To make Salt Water Fresh—­For building of Hospitals for Bastard Children—­For building of Ships against Pirates—­For making of Oil from Sun-flower Seeds—­For improving of Malt Liquors—­For recovery of Seamen’s Wages—­For extracting of Silver from Lead—­For the transmuting of Quicksilver into a malleable and fine Metal—­For making of Iron with Pit-coal—­For importing a Number of large Jack Asses from Spain—­For trading in Human Hair—­For fatting of Hogs—­For a Wheel of Perpetual Motion.”  But the most strange of all, perhaps, was “For an Undertaking which shall in due time be revealed.”  Each subscriber was to pay down two gnineas, and hereafter to receive a share of one hundred, with a disclosure of the object; and so tempting was the offer, that 1,000 of these subscriptions were paid the same morning, with which the projector went off in the afternoon.’  In 1825 there were speculations in companies nearly as wild, and just before 1866 there were some of a like nature, though not equally extravagant.  The fact is, that the owners of savings not finding, in adequate quantities, their usual kind of investments, rush into anything that promises speciously, and when they find that these specious investments can be disposed of at a high profit, they rush into them more and more.  The first taste is for high interest, but that taste soon becomes secondary.  There is a second appetite for large gains to be made by selling the principal which is to yield the interest.  So long as such sales can be effected the mania continues; when it ceases to be possible to effect them, ruin begins.

So long as the savings remain in possession of their owners, these hazardous gamblings in speculative undertakings are almost the whole effect of an excess of accumulation over tested investment.  Little effect is produced on the general trade of the country.  The owners of the savings are too scattered and far from the market to change the majority of mercantile transactions.  But when these savings come to be lodged in the hands of bankers, a much wider result is produced.  Bankers are close to mercantile life; they are always ready to lend on good mercantile securities; they wish to lend on such securities a large part of the money entrusted to them.  When, therefore, the money so entrusted is unusually large, and when it long continues so, the general trade of the country is, in the course of time, changed.  Bankers are daily more and more ready to lend money to mercantile men; more is lent to such men; more bargains are made in consequence; commodities are more sought after; and, in consequence, prices rise more and more.