Newton Sir Isaac
Isaac Newton DS Regarding South Seas Investment Just Before Collapse, Probably Finest Known
1p partly printed and partly handwritten document signed by British physicist Sir Isaac Newton (1642-1727) as "Isaac Newton" at center right. Dated July 13, 1720. Countersigned by "Wm Thompson" and "Richd Morgan". Bearing serial number "N. (130)" in left blank margin. A manuscript notation, "£6000 - Lottery Annuities at 5 per Cent." appears in the bottom margin. Revenue stamps at top. Overall age-toning, dust-staining, and foxing. Both the spindle hole at center and a blank margin defect are expertly repaired. Slight marginal chipping, with a small discolored area found in the top blank margin. Binding traces along left edge, else very good. The signature is bold and clear, with the final "n" being slightly affected by the red wax seal. Accompanied by a color postcard portrait of Newton from the National Portrait Gallery.
"I Sr. Isaac Newton of St. Martin's Street by Leicester fields do hereby Authorize and Impower Mr. Joseph Safford for me and in my Name to Subscribe, or to Authorize and Impower any other Person or Persons for me and in my Name, to Subscribe into the Capital Stock of The Governour and Company of Merchants of Great Britain Trading to the South Seas, and other Parts of America, and for Encouraging the Fishery; all such Part, Share, and Interest Parts, Shares, and Interests, as I have or am intitled unto, in all or any the redeemable Stocks or Annuities transferable at the Bank of England: And I do hereby ratify and confirm all such Subscriptions as shall be made for me and in my Name by, or by Order or Direction of the Said
Witness my Hand and Seal the Thirteenth Day of July Anno Dom. 1720".
The South Sea Company was founded in 1711 to trade with Spanish America. Although the company described itself rather grandly in contemporary documents as the "Company of Merchants of Great Britain Trading to the South Seas, and other Parts of America, and for Encouraging Fishery", its main business was slave-trading. The company's stock, with a guaranteed interest of 6%, sold well initially. In 1713, the Treaty of Utrecht signed between Great Britain and Spain proved detrimental to the company's interest since it imposed an annual tax on imported slaves. Yet confidence was restored when George I took the throne in 1714, and acquired large holdings in the company. Sir Isaac Newton was among company shareholders listed at Christmas 1714.
In 1718, King George I became governor of the company, thereby giving investors even more confidence in the company, and encouraging speculation of shares now paying 100% interest. The peak came in early 1720, partly as a result of the company's proposal to take over the national debt. It is recorded that Newton, when asked his opinion of the prospect of South Seas stock, replied that he could calculate the motions of heavenly bodies, but not the madness of the people. Newton followed his own advice and liquidated £7,000 of stock, reaping a solid 100% profit. He was not alone, and the stock price decreased in April. The company rallied and speculation again became rampant. Many investors, including Newton, were lured back into the market. Stock prices soared in July 1720, with Newton authorizing Mr. Joseph Safford to subscribe on his behalf. Unhappily, by September 1720, the market had collapsed, and shares dragged down government stocks with them. Newton lost £20,000, and for the rest of his life, could never bear to hear the name of the company.
This historic document represents that even the brilliant Sir Isaac Newton surcame to the rampant speculation fever of the time. It must have been a document that he wished fervently many times he had not signed. The phenomenon known as the South Sea Bubble continues to fascinate modern investors since it clearly demonstrates the underlying economic, cultural, and psychological mechanisms prompting such reckless speculation. The fact that luminaries like Sir Isaac Newton were somehow persuaded to invest and re-invest in the South Sea Company illustrates the complexity of the pressures involved. An extraordinary document bearing a rarely encountered signature!
This item comes with a Certificate from John Reznikoff, a premier authenticator for both major 3rd party authentication services, PSA and JSA (James Spence Authentications), as well as numerous auction houses.
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