Spanish galleons, treasure hunters and speculators: how bubbles never change

Regular readers will know that I am beginning to be mildly obsessed by the great diving and treasure-hunting booms of the late 1600s onwards (sunken Spanish galleons were the main target).

I'm reading Peter Earle's Treasure Hunt at the moment I was trying to save it for my holidays, but I'm afraid it was irresistible. You should get your own copy for the fabulous stories of derring-do on the high seas, but you will also love the all too familiar description of the financing systems and get-rich-quick schemes that grew up around the treasure hunters.

The first step was for an adventurer to get a royal warrant to search for treasure in any one area (no free market here). This was supposed to register the claim and to protect the area from interlopers while the project was put together. But, of course, not everyone intended on actually going to sea the warrant itself was enough to make plenty of money.

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To get the patent, the adventurer would join with a group of others, usually at least someone who knew how to manipulate courtiers, and "a Noble Lord who will be useful in the management of the business".

Once the patent was through, "the original partners would divide it up into several hundred sometimes several thousand shares and promote the project by all means possible, emphasising their exact knowledge of the wreck site and the authenticity of the information they had received, blowing up the potential treasure to be won to hundreds of thousands or millions of pounds, in coffee houses, on the Exchange, and everywhere else where men met and talked."

For good measure, they usually gave some shares away to the great and the good and advertised their "involvement" relentlessly. They then never bothered with the going to sea bit.

This was, says Earle, a much easier way to make money than the "the long, tiresome and very expensive" business of fitting out ships, building diving bells, financing a crew and buying divers (slave divers from Madeira came at £70 a head).

There was some effort to clamp down on this one William Blathwayt tried to persuade the Treasury to demand proof of the reality of a wreck before handing over a patent: "I humbly offer that before the passing of this grant your Lordships be satisfied by good proofs of the truth of the information, lest some of the petitioners be surprised by the others into a society of stockjobbing instead of a real and grounded trade."

His petition went nowhere. After all, who needs real business when you can have speculation?

This first treasure-hunting bubble popped in the 1690s (when the Bank of England was founded and the first state lottery the Million Adventure were founded) but readers will note just how familiar sounding the whole process was: the bubbles of 400 years ago were no different to the ones we keep inflating today.