The South Sea Company

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The South Sea Company was a British joint stock company that traded in South America during the 18th century. Founded in 1711, the company was granted a monopoly to trade in Spain's South American colonies as part of a treaty during the War of Spanish Succession. The primary element of trade was slaves (Asiento). In return, the company assumed the national debt England had incurred during the war. Speculation in the company's stock led to a great economic bubble known as the South Sea Bubble in 1720, which caused financial ruin for many. In spite of this it was restructured and continued to operate for more than a century after the Bubble. The headquarters were in Threadneedle Street.[1]

Contents

Foundation

The company, established in 1711 by (among others) the Lord Treasurer Robert Harley and a shady character named John Blunt, was granted exclusive trading rights in Spanish South America. At that time, when continental America was being explored and settled, Europeans applied the term "South Seas" only to South America and surrounding waters, not to any other ocean. The trading rights were presupposed on the successful conclusion of the War of the Spanish Succession, which did not end until 1713, and the actual treaty-granted rights were not as comprehensive as Harley had originally hoped.

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