South Sea Company x Corporation for carrying on trade to the South Seas

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South Sea Company x Corporation for carrying on trade to the South Seas

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        The South Sea Company was established in 1711, ostensibly to trade with Spanish South America, but, in fact, as a vehicle for managing government debt incurred during the War of the Spanish Succession. Holders of government debt were persuaded to exchange it for shares in the new Company which by 1720 had made only one, moderately successful, trading voyage and held around £20m of government debt. Company directors continued to talk up the potential of the scheme, provoking feverish speculation followed by a share price collapse in which thousands were ruined.

        A Parliamentary investigation uncovered massive fraud by the directors, but the South Sea Company itself survived and continued to trade into the 1760s. It retained a role in the management of the National Debt until effectively abolished in 1854.

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