Trading Cornish Mining Shares in the 18th Century
As I prepare for the up and coming talk at Luckett, a village with its own amazing mining heritage, it seemed apt that I should produce a quick summary on the trading of Cornish Mining shares. I have used a publication written by Roger Burt as the main source of information, “The London Mining Exchange 1850 to 1900”.
Unfortunately the Cornish mining industry of the 19th century was often hindered by the bad reputation it gained as an investment. This reputation was obtained by the actions of the system that was supposed to support it by raising capital.
Cornish mining has always been an industry of extreme fortunes, extremes driven by the unpredictability of the lodes beneath the ground. This was an industry where luck and skill could bring huge wealth of within yards huge losses.
In the 19th century additional factors came into play, the man made factors of share fraud, and share manipulation. Much of these malpractice s was made possible by the manner in which the mining shares were traded.This was compounded by the change is share structure of many mining companies, a change that brought the shares to a growing market of unwary investors.
The buying and selling of Cornish Mining Shares
In the 18th and 19th Centuries most mining companies excluded from stock market instead the shares were traded by direct contact seller and buyer, or sometimes in the case of large sales by public auction.
Dealers did not buy and sell on commission, but Instead bought and sold, and exchanged shares between mines, even buying whole mines. This business was conducted from their own offices, on the pavement outside of the stock market or in Royal Exchange. Share issues and sales were advertised in the of the mining Journal. Richard Hawke of Liskead for example was a common seller through the pages of the Journal.
As time went on Cost book companies divided their shares to attract more capital.In the mid 1840s most had shares of 256 or less, but 20 years later numbers in thousands. Such division made the shares affordable to a wider range of investors, a wider range of investors that where ripe to be relieved of their money by unscrupulous dealers.
The share dealers direct involvement in mines gave opportunity for malpractice, an opportunity that some took advantage of.
As adventures in the mines they could become involved in their management would influence activity to maximize share value, even if it impacted long term working of mines. They often became the mine’s purser or secretary to maximize their ability to direct the activities of the mine.
Some would start a mine at inflated prospects, collect in share capital from hopeful investors and then take a large slice for their services. Their aim was not to extract ore from underground, but to extract money from gullible public’s pockets. Once the mine was formed their influence was still exerted, sometimes they would divert profits to high prestige projects such as grand buildings, and sometimes falsely boost production with the richest parts of lodes at the expense of the longer term fortune of the mine
The Mining Exchanges
But many honest dealers giving good advice, and some of them attempted from the mid 19th Century more reputable attempted to form place to trade shares, These involved creating a ‘Mining Exchange’ where mining shares could be bought and sold under regulated conditions, through accredited dealers. Several attempts were made, but each failed, often amid acquisitions that the exchanges created small cliques that excluded some of the experienced smaller dealers.
The collapse of the Cornish Mining Industry would overtake the attempts to form a widely supported Mining Exchange. This was a collapse hastened by the bad reputation gained by the very malpractices the exchanges were attempting to prevent.
A date for the diary