QUICK SUMMARY FORMAT

BUBBLE SPOTTING SERIES - 2014

This short presentation on the English Railway Mania forms

part of a larger presentation on Market Bubbles

Front page graphic - WIKICOMMONS. -Petar Milošević

In the late 1830s and early 1840s the British

economy slowed down, and interest rates

went up. Government bonds became a

preferred investment.

BACKGROUND

www.nrm.org.uk

However in the mid 1840s the bank of

England dropped the interest rates again.

England was in the middle of the industrial

revolution, creating an affluent middle

class in the process.

Government then changed legislation,

making it much easier for individuals to

invest in companies.

www.nrm.org.uk

Railroad companies were punted by media

hype as a FOOL PROOF INVESTMENT and a

number of Railroad “Investment

Opportunities” sprung up left, right and

centre.

www.nrm.org.uk

Due to many Members of Parliament

investing in these schemes, the regulatory

control was pretty much laissez-faire OR

LACKING.

During those early days, the technology was

far from perfected, and it resulted in

numerous accidents (as can be seen from this

1931 sketch) www.Nrm.Org.Uk

Between 1844-1846 a total of 6,220 miles

(10,010 km) of railway line was constructed

(comparatively by the 2000’s the modern UK

rail network was only approx. 11,000 miles

(18,000 km) long.

In 1845 the Bank of England increased

lending rates, which was the end of easy

capital.

Some scams were uncovered, which had

lured innocent investors to invest

their hard earned money in bogus

investments.

This, combined with weak operating

performance (at least partially as a result

of extreme competition between all the

various railroad companies), started the

snowball effect and funds were withdrawn

from railroad companies.

RAILWAY SHARE

PRICES

Many investors lost substantial

investments.

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English Railway Mania (Bubble) –Sources and further reading

http://www.thebubblebubble.com/1929-crash/

http://www.investopedia.com/terms/s/stock-market-crash-1929.asp

http://www.reuters.com/article/2008/01/21/us-market-crashes-

idUSL2126592320080121

http://www3.nd.edu/~jstiver/FIN462/US%20Market%20Crashes.pdf

http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

This presentation is provided in the sake of public interest, and has been compiled based on

publically available information sources on the web.

While great care has been taken in the preparation and compilation of information indicated here,

the author does not accept any legal or other liability for any inaccuracy, mistake, misstatement or

any other error of whatsoever nature contained herein.

This presentation is not investment advice, not a solicitation for any type of investment, financial

or otherwise, nor is this presentation an opinion expressed on, nor endorsement of markets,

commodities or investments.

Any names, trademarks and images are copyright their respective owners and rights in the

graphic artwork and photos used in this presentation belongs to, and are courtesy of the

respective owners thereof. Unless where otherwise indicated, I don’t claim to have any rights

therein.