South sea company

The South Sea Company (officially The Governor and Company of the merchants of Great Britain, trading to the South Seas and other parts of America, and for the encouragement of fishing)[3] was a British joint-stock company founded in 1711, created as a public-private partnership to consolidate and reduce the cost of the national debt. To assist in the generation of income for this purpose, the company was granted a monopoly to trade with South America and islands in the surrounding waters, hence its name (the modern use of the term “South Seas” to refer to the entire South Pacific Ocean was unknown in England at the time). When the company was created, Britain was involved in the War of the Spanish Succession and Spain and Portugal controlled most of South America. There was thus no realistic prospect that trade would take place, and as it turned out the Company never realized any significant profit from its monopoly. 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; the notorious economic bubble thus created, which ruined thousands of investors, became known as the South Sea Bubble—Read more at Wikipedia. “South Sea Company.” 29 December 2019