/biz/ - Business & Finance

[Anonymous No.7216704]

Railway Mania was an instance of speculative frenzy in Britain in the 1840s. It followed a common pattern: as the price of railway shares increased, more and more money was poured in by speculators until the inevitable collapse. It reached its zenith in 1846, when no fewer than 272 Acts of Parliament were passed, setting up new railway companies, and the proposed routes totalled 9,500 miles (15,300km) of new railway. Around a third of the railways authorised were never built – the companies either collapsed due to poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors' money into other businesses.
>Makes you think

[Anonymous No.7216827]

While earlier business ventures had relied on a small number ofbanks, businessmen and wealthyaristocratsfor investment, a prospective railway company had (on top of these sources) a large, literate section of population with savings to invest. In 1825 the government had repealed theBubble Act, brought in after the near-disastrousSouth Sea Bubbleof 1720 which put close limits on the formation of new business ventures and, importantly, had limitedjoint stock companiesto a maximum of five separate investors. With these limits removed anyone could invest money (and hopefully earn a return) on a new company and railways were heavily promoted as a foolproof venture. New media such asnewspapersand the emergence of the modernstock marketmade it easy for companies to promote themselves and provide the means for the general public to invest.
>Are you reading this, Anon?