Company
DissolvedThe South Sea Company
London · 1711 – 1853
The bubble burst in 1720. The company lingered as a manager of government debt until it was wound up in 1853.
Parliament chartered the South Sea Company in 1711 to take over a mass of government debt. Holders of the debt received company stock. The company received a monopoly on trade with Spanish South America, a trade Spain had no intention of opening.
The commercial promise was thin. The financial engineering was not. In 1720 the company offered to convert still more of the national debt into its shares, and the shares rose because people believed they would rise. They did, and then they fell by most of their value between July and December.
What the bubble employed
For a few months London had a new crowd of jobbers, clerks copying transfers, and coffee-house brokers selling paper in companies that owned nothing. The South Sea Company itself had directors, a staff, and a few ships. The employment that mattered was the market around the stock. When the price collapsed, that employment vanished with it, and a generation of politicians spent years assigning the blame in public hearings.
A company that outlived its scandal
The firm was not wound up in 1720. It continued as a manager of the government annuity it had been created to hold, a dull office with clerks and a charter, until the South Sea Company was finally dissolved in 1853. The museum's interest is the lesson, which keeps recurring: a company can be famous for a market in its own shares and barely exist as a place of work.
The work it organized
- Stockjobber
- Transfer clerk
- Director
- Annuity clerk
On the timeline
Related
- The Bank of EnglandActive