The Probert Encyclopaedia of Money

SOUTH SEA BUBBLE

The South Sea Bubble was an English scheme for liquidating the National Debt in the 18th century. In 1711 the South Sea Company was incorporated which in return for a monopoly of trade to Spanish America took over the floating National Debt. The public, encouraged by the government bought 100 pound shares in the company which quickly rose to 1000 pounds in value. Then in 1720 the company crashed and there was widespread ruin. In the ensuing inquiry the government was found guilty and Walpole attained power and restored the country's credit, and the South Sea Company henceforth conducted legitimate business.
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