South Sea Company

British company founded in 1711 to trade, chiefly in slaves, with Spanish America. The resulting speculation mania that led to ruin for many investors was known as the South Sea Bubble. Company dissolved in 1753.

The South Sea Company was founded in 1711 to trade (mainly in slaves) with Spanish America, on the assumption that the War of the Spanish Succession, then drawing to a close, would end with a treaty permitting such trade. The company's stock sold well, but the Treaty of Utrecht made with Spain in 1713, was less favourable than had been hoped, imposing an annual tax on imported slaves and allowing the company to send only one ship each year for general trade. The success of the first voyage in 1717 was only moderate, but King George I of Great Britain became governor of the company in 1718, creating confidence in the enterprise, which was soon paying 100 percent interest. In 1720 there was an incredible boom in South Sea stock, as a result of the company's proposal, accepted by Parliament, to take over the national debt. The company expected to recoup itself from expanding trade, but chiefly from the foreseen rise in the value of its shares. By September the market had collapsed, and by December South Sea shares had plummeted in value, dragging other, including government, stock with them. Many investors were ruined, and the House of Commons ordered an inquiry, which showed that at least three ministers had accepted bribes and speculated. Many of the company's directors were disgraced, but the company itself survived until 1853, having sold most of its rights to the Spanish government in 1750.

The South Sea Company was a British joint stock company founded in 1711. In 1713, it was granted a monopoly on trade with Spain's American colonies in return for assuming the national debt accrued during the War of the Spanish Succession. In 1731 John Hanbury was Director, and John Eyles a Subdirector, of the company, which had been reorganized following the 1720 bubble in South Sea stock.

Robert Harley, Earl of Oxford and Lord Treasurer, initiated a scheme for the funding of national debt through the South Sea Company, founded in 1711 to trade with Spanish America, on the assumption that the War of the Spanish Succession would end with a treaty permitting such trade. The Treaty of Utrecht, 1713, was less favourable than had been hoped, but confidence in the Company remained artificially high, eventually leading to the collapse of the stock market in 1720 (the South Sea Bubble) and the ruin of many investors. The Company, however, survived until 1853.