The proliferation of shares, bonds and securities of all kinds during the nineteenth century radically changed the nature of investment. Property as an essentially physical possession – land, plate, jewelry – gave way to the more intangible resources of income and interest from capital investment. The proprietors of joint-stock companies or holders of government bonds, for example, were entitled to a “flow of income” from their capital. Investments of this sort were responsible for the phenomenal growth of the English economy, but were especially vulnerable to manipulation by unscrupulous persons. The theft of shares or misuse of an investor's capital was not readily detectable so long as the accustomed flow of income was maintained. Worthless paper securities could also be passed off as representing valuable goods or profitable trade. Furthermore, the principal securities market – the London Stock Exchange – was a poor intermediary between investors and new share issues, failing to shield the public from fraudulent company promoters.

The growth of stockholding and a securities market was originally tied to the National Debt, which increased from a mere £5 million in 1698 to £71 million in 1749 to £497 million in 1800. For over a century most stock transactions involved government securities, and company shares were not even listed on the Exchange until 1811. The Railway Mania of the 1840s magnified the importance of company shares and railway share dealings increased Exchange membership from a few hundreds before the Mania to 864 in 1851.