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South Sea Company

British joint-stock company during the 18th century.

The South Sea Company was founded in 1711 to reduce national debt. It gained a monopoly to supply African slaves but failed to make significant profits. The South Sea Bubble in 1720 led to a collapse in share prices, ruining many investors. The Bubble Act 1720 was passed to prevent similar incidents. The company engaged in insider trading and bribery. Despite the scandal, the company continued to operate for over a century.

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Timeline

Consolidation of Government Debt Scheme

The scheme aimed to consolidate all government debt, ensuring full repayment to existing creditors at the nominal value of their loans, which were previously undervalued due to doubts about the government's ability to repay.

Treaty of Utrecht

After the War of the Spanish Succession, the Treaty of Utrecht in 1713 limited Britain's trade opportunities with Spain, impacting the South Sea Company's expected profits.

South Sea Company agrees to take on the slave trade

On 26 March 1714, the board of directors of the South Sea Company reluctantly agreed to take on the slave trade, despite it not being an initial objective of the company. The Asiento contract set a sale quota of 4,800 units of slaves per year.

Receipt for South Sea Company dividends

In 1717, dividends from the South Sea Company were issued to shareholders. This financial document represented the returns on investments made in the company.

Company trading in its own stock

The South Sea Company started trading in increasing amounts of its own stock, despite not generating the promised profits, contributing to the eventual collapse of the stock bubble.

South Sea Company Debt Conversion Scheme

In 1719, the South Sea Company proposed a scheme to take over most of Britain's unconsolidated national debt in exchange for company shares. The scheme aimed to transform illiquid investments into tradable shares backed by national debt, providing debt holders and annuitants with a safer and more liquid investment option.

Presentation of the plan to the South Sea Company board

On 21 January, the plan was presented to the board of the South Sea Company regarding financial negotiations and proposals.

Chancellor of the Exchequer presents plan to Parliament

On 22 January, Chancellor of the Exchequer John Aislabie presented the plan to Parliament, leading to discussions and proposals.

Negotiations and increased offers by the South Sea Company

On 1 February, the company negotiators led by Blunt raised their offer and made adjustments to the terms of the proposal.

John Hungerford raises question of bubble companies in House of Commons

John Hungerford raised concerns about numerous joint-stock companies making extravagant or fraudulent claims in the House of Commons in 1720. He led a committee to investigate companies seeking to raise £40 million in capital, establishing the principle that companies should operate within the objects specified in their charters.

Robert Walpole Restores Public Confidence After South Sea Company Scandal

In 1721, Robert Walpole successfully restored public confidence in the financial system after the South Sea Company scandal, removing corrupt company directors and redistributing wealth to victims.

Henry Elking's Proposal to the South Sea Company

In 1722, Henry Elking proposed to the governors of the South Sea Company to resume the 'Greenland Trade' and send ships to catch whales in the Arctic. He provided detailed suggestions on crewing and equipping the ships.

Commencement of Whaling by the South Sea Company

In 1724, the South Sea Company decided to commence whaling in the Arctic. They built 12 whale-ships on the River Thames and sent them to the Greenland seas in 1725.

Financial Loss of the South Sea Company from Arctic Whaling

By 1732, the South Sea Company had accumulated a net loss of £177,782 from eight years of Arctic whaling. The company directors appealed to the British government for further support.

Convention of Pardo

In January 1739, the Convention of Pardo was negotiated between the Prime Minister Walpole and the King of Spain. The treaty stipulated that Spain would pay British merchants £95,000 in compensation for captures and seized goods, while the South Sea Company would pay the Spanish Crown £68,000 in due proceeds from the Asiento.

Reduction of Directors in the South Sea Company

In 1753, the number of directors in the South Sea Company was reduced to 21 from the previous 30. The company continued its trade until the end of the Seven Years' War.

View of Bishops-gate entrance of the South-Sea House

In 1754, a view of the Bishops-gate entrance of the South-Sea House was depicted in popular prints, showcasing the impressive building where the South Sea Company operated in London.

Interior of South Sea House

An image depicting the interior of the South Sea House in 1810, showcasing the historical architecture and setting of the company's headquarters.

Restructuring of the South Sea Company

The South Sea Company, despite facing a crisis in 1720, continued trading until 1853 after undergoing a restructuring. This event marked a significant chapter in the company's history and its resilience in the face of financial challenges.

Digitized News Articles on South Sea Bubble

In 1920, news articles related to the South Sea Bubble were digitized for its 200th anniversary, providing valuable insights into the historical event.

Digitized News Articles on South Sea Bubble

In 1921, news articles related to the South Sea Bubble were digitized for its 200th anniversary, offering further information on this significant financial crisis.

End of the Timeline
South Sea Company

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