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South Sea Bubble: About

South Sea Bubble

What is the South Sea Bubble?

The South Sea Bubble has been called: the world’s first financial crash, the world’s first Ponzi scheme, speculation mania and a disastrous example of what can happen when people fall prey to ‘group think’. That it was a catastrophic financial crash is in no doubt and that some of the greatest thinkers at the time succumbed to it, including Isaac Newton himself, is also irrefutable. Estimates vary but Newton reportedly lost as much as £40 million of today’s money in the scheme.  But what actually happened?

It all began when a British joint stock company called ‘The South Sea Company’ was founded in 1711 by an Act of Parliament. It was a public and private partnership that was designed as a way of consolidating, controlling and reducing the national debt and to help Britain increase its trade and profits in the Americas. To enable it to do this, in 1713 it was granted a trading monopoly in the region. Part of this was the asiento, which allowed for the trading of African slaves to the Spanish and Portuguese Empires. The slave trade had proved immensely profitable in the previous two centuries and there was huge public confidence in the scheme, as many expected slave profits to increase dramatically, especially when the War of the Spanish Succession came to an end and trade could begin in earnest. It didn’t quite play out like that however… Continue Reading from Historic UK

Check Out the Library Collection
Link to Boom and Bust by William Quinn in the catalog
Link to The Great Courses' Crashes and Crises in Kanopy
Link to Collected Plays: Six by Noel Coward in the catalog
Link to Sea Change by Robert Goddard in Freading
Link to Money by Jacob Goldstein
Link to Ascent of Money by Niall Ferguson