How Rail Road Bubbles Happen: The Glenmutchkin Railway
Introduction (via Andrew Odlyzko)
The Glenmutchkin story was published in 1845 by William Edmondstoune Aytoun, an ardent Scottish nationalist, poet, writer, lawyer, journalist, and University of Edinburgh professor. The first wave of truly manic railway promotion took place in 1844. By the summer of 1845, when Aytoun was writing this piece, the British Parliament was finishing its consideration of the projects hatched in 1844, approving some lines and rejecting others. But at the same time, another, much greater, wave of railroad promotion was gathering speed, with even sillier (and more destructive to investors) projects being planned. Aytoun’s warning in the last sentence of the story, that [i]t contains a deep moral, if anybody has sense enough to see it; if not, I have a new project in my eye for next session, of which timely notice shall be given. was not heeded. Few people had the sense to see the moral of the story, and timely notices” of new projects were being given literally by the dozen every day just as the story, written specifically to warn the nation of the folly and fraud of the mania, was being published in the October 1845 issue of Blackwood’s Magazine. It was just one of many pieces appearing at that time (in Punch, especially) making fun of the scramble for supposedly effortless riches that the revolutionary new technology was offering.