The South Sea Company had no physical trade after 1739 but, despite this, it continued in existence for a further 117 years. The company had a Sub-Governor, Bateman; a Deputy Governor, Ongley; and 30 ordinary directors. They sent out no more whale-ships after the loss-making 1732 season. Thus bonds representing the debt intended to be consolidated under the scheme were available for purchase on the open market at a price that allowed anyone with advance knowledge to buy and resell in the immediate future at a high profit, for as soon as the scheme became publicised the bonds would once again be worth at least their nominal value, as repayment was now more certain a prospect. The sell-off began by early July and the collapse occurred quickly. A new Parliament met in November 1710 resolved to attend to national finances, which were suffering from the pressures of two simultaneous wars: the War of the Spanish Succession with France, which ended in 1713, and the Great Northern War, which was not to end until 1721. Supporters, dexter: The emblematic figure of Britannia, with the shield, lance etc all proper; sinister: A fisherman completely clothed, with cap boots fishing net etc and in his hand a string of fish, all proper. This short history is just an overview, intended to provide a context for research in the South Sea Bubble Collection. However, Company stock rose greatly in value as it expanded its operations dealing in government debt, and peaked in 1720 before suddenly collapsing to little above its original flotation price. To pay for this, the company used a trick which the Bank of England had employed in its own creation. The popping of the South Sea Bubble resulted in a contagion that popped a concurrent bubble in Amsterdam as well as France’s Mississippi Scheme bubble. [8], Harley's first concern was to find £300,000 for the next quarter's payroll for the British army operating on the Continent under the Duke of Marlborough. (1963). He released the information steadily, continually adding new reports of debts incurred and scandalous expenditure, until in January 1711 the House of Commons agreed to appoint a committee to investigate the entire debt. The Asiento was granted in the name of Queen Anne and then contracted to the company. He identified a number of companies which between them sought to raise £40 million in capital. The result was a map showing four major oceanic basins: the North Atlantic, the South Atlantic, the Pacific, and the Indian. Why would the South Sea Company not specifically define the ‘South Sea’? ", Hoppit, Julian. [34] This triggered bankruptcies amongst those who had bought on credit, and increased selling, even short selling (i.e., selling borrowed shares in the hope of buying them back at a profit if the price fell). 21 Feb. 2014. COVID-19 : The more the price rose in advance of conversion, the more the company would make. The South Sea Company did not even engage in its first trade voyage to the South Seas until 1717, and the potential for South Sea fortune slipped even further from grasp when the fragile relationship between Spain and Britain weakened in 1718. Interestingly, the charter lays claim to all “Islands, Forts, Places and Mines” within its boundaries, as well as all trade, including ships found within its territory. Though South Sea Company shares were skyrocketing, the company’s profitability was mediocre at best, despite abundant promises of future growth by company directors. 210. SOUTH SEA COMPANY. Hungerford had previously been expelled from the Commons for accepting a bribe. (function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = "//connect.facebook.net/en_US/all.js#xfbml=1"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk')); Yet even this map does not specify what portion of the ocean is claimed by the Company. These claims were a major cause of deteriorating relations between the two countries in 1738; and although the Prime Minister Walpole opposed war, there was strong support for it from the King, the House of Commons, and a faction in his own Cabinet. The Bubble Act 1720 (6 Geo I, c 18), which forbade the creation of joint-stock companies without royal charter, was promoted by the South Sea Company itself before its collapse. A proposal was even made in Parliament to place bankers in sacks filled with snakes and thrown into the Thames River! [21], By the time of the next directors' elections in 1718 politics had changed again, with a schism within the Whigs between Walpole's faction supporting the Prince of Wales and James Stanhope's supporting the King. Caswall had retired as a South Sea director to concentrate on the Sword Blade business. The company was promised a monopoly of all trade to the Spanish colonies in South America in exchange for taking over and consolidating the national debt raised by the War of Spanish Succession (1701-1714). [5] Company money was used to deal in its own shares, and selected individuals purchasing shares were given cash loans backed by those same shares to spend on purchasing more shares. The South Sea Company never paid the amount due for the first annual ship to the Spanish Crown, nor did it pay any amount for any of the other six trips. Some Company board members refused to accept the contract on these terms, and the government was obliged to reverse its decision. ", "Understanding financial derivatives during the South Sea Bubble: The case of the South Sea subscription shares", South Sea Bubble collection at Harvard University, Charles McKay's Account of The South Sea Bubble in Modern English, Helen Paul's Account of The South Sea Company's slave trading activities, Bank of Credit and Commerce International, Facebook–Cambridge Analytica data scandal, Company of Merchant Adventurers of London, Company of Merchant Adventurers to New Lands, Post-Napoleonic Irish grain and cropland price shocks, 2011 Tōhoku earthquake and tsunami stock market crash, 2015–2016 Chinese stock market turbulence, List of stock market crashes and bear markets, https://en.wikipedia.org/w/index.php?title=South_Sea_Company&oldid=981493779, Short description is different from Wikidata, Wikipedia articles needing clarification from December 2019, Articles needing additional references from January 2018, All articles needing additional references, Articles with unsourced statements from January 2018, Wikipedia articles needing clarification from February 2014, Articles with unsourced statements from January 2014, Wikipedia articles with WorldCat identifiers, Creative Commons Attribution-ShareAlike License. By then, government spending for the United Kingdom had reached £64.4 million, which the government was able to afford by lowering the interest rate on its debt. With investors outraged, Parliament was recalled in December and an investigation began. An adult male slave counted as one unit; females and children counted as fractions of a unit. Hayley, R. L. (1973). All Tory politicians were removed from the board and replaced with businessmen. As of 1719, the government was in debt by £50 million, £18.3 million of which was held by three of England’s largest corporations. There was provision for two extra sailings at the start of the contract. In contrast to the "legitimate" trade in slaves, the regular trade of the annual ships generated healthy returns, in some case profits were over 100%. South Sea Bubble Home : What is the South Sea Bubble : South Sea Bubble Short History. The South Sea Company Charter reads in part “into unto and from the Kingdoms, Lands etc. The South Sea Company was formed in 1711, supported by Robert Harley as a Tory competitor for the Whig Bank of England. In June 1703 the company bought a large estate in county Cork, confiscated from a number of attainted persons and other lands in counties Waterford and Clare. Harley surrendered £8,000 of debt and was appointed Governor of the new company. Ed. Neither Spain nor the South Sea Company would yield. South Sea Sail is a well established yacht management business and yacht owners. SSYC is a young and dynamic UK based brand with a 30 years experience, a full service luxury yachting company providing yacht charter, yacht sales, yacht services and … However, it also required a 'sweetener' in the form of receiving a new loan of £20,000 at 5% as part of the deal, secured against Royal shares in Cornish tin. The payment to the government was to be used to buy in any debt not subscribed to the scheme, which although it helped the government also helped the company by removing possibly competing securities from the market, including large holdings by the Bank of England. These were nicknamed "Bubbles". [15], The company created a coat of arms with the motto A Gadibus usque ad Auroram ("from Cadiz to the dawn", from Juvenal, Satires, 10) and rented a large house in the City of London as its headquarters. The South Sea Bubble was a complex event, the product of intersecting financial, legal, political, and cultural factors. £18.3m was held by three large corporations: Privately held redeemable debt amounted to £16.5m. !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); (Hansard, 25 March 1834) ... that a prompt and effectual mode to remedy these evils would be for Government to annul the charter and dissolve the company. The new King George I and the Prince of Wales both had large holdings in the company, as did some prominent Whig politicians, including James Craggs the Elder, the Earl of Halifax and Sir Joseph Jekyll. (2002) "The Myths of the South Sea Bubble,", Kleer, Richard A. Stanhope, who was a member of the committee, received £50,000 of the 'resaleable' South Sea stock from Sawbridge, a director of the Hollow Sword, at about this time. The South Sea Company directors appealed to the British government for further support. There he founded a bank, which in December 1718 became the Banque Royale, national bank of France, while Law himself was granted sweeping powers to control the economy of France, which operated largely by royal decree. The adventure hub is located at Shop 3, Coral Sea Marina - South Village. Others represented potentially sound, although novel, schemes, such as for founding insurance companies. Carlos, Ann M. and Neal, Larry. [55], The South Sea Company had a governor (generally an honorary position); a subgovernor; a deputy governor and 30 directors (reduced in 1753 to 21). The study will then examine what this means for the sovereignty of the South Sea Company, as well as the intentions of its authors. II Electronic Resource] : In Three Parts : To which is Added a General Index to both Volumes. One quarter of the profits were to be reserved for the King of Spain. The price of the stock went up over the course of a single year from about £100 to almost £1000 per share. With the exception of the South and Central American coasts, the interior geography is left ambiguous. In 1721 formal investigations exposed a web of deceit, corruption, and bribery that led to the prosecution of many of the major players in the crisis, including both company and government officials. On 27 July 1714, Harley was replaced as Lord High Treasurer as a result of a disagreement that had broken out within the Tory faction in parliament. Directors would be elected every three years and shareholders would meet twice a year. In 1714 one of the directors who had been sponsored by Harley, Arthur Moore, had attempted to send 60 tons of private goods on board the company ship. Gale. In part, the government recognised that it had a good deal it did not wish to spoil. Brown (1926, p. 663) says that The failure to comply with the accounting provisions of the Asiento treaty (in the context of Spanish knowledge of secret accounts kept by the South Sea Company which would prove clandestine trading) was a constant source of the friction which culminated in armed conflict. A secret committee was one with a fixed set of members who could vote on its proceedings.

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