South+Sea+Bubble

South Sea Bubble by Danny, Junnor, Alec, Joe

The South Sea Company was a company based in Great Britain, but traded in South America. The company was essentially granted a monopoly on trade in the South American colonies by the British government, but in return assumed the national debt of Great Britain. As one can guess, everyone in Great Britain wanted a piece of this monopoly. The SSC had no problem attracting investors with an IOU to the government worth 10 million pounds. The SSC had the most lucerative monopoly on Earth which generated publicity throughout Britain and parts of South America due to having all the rights to trade in the South Seas.
 * __SOUTH SEA COMPANY__**

The Bubble began in 1711 and ended in the late 1720s. South Sea Company had a monopoly on the merchant trades. Every one in Britain began to buy the SSC stock because of inflation it drove the stock price up. The heads of the SSC realized the stock price didn't reflect the actual value. They decided to sell of all their shares and attempted to do so quietly. Someone leaked the information to the public and a panic began which caused people to want to sell off their shares, which in turn caused the price of the stock to depreciate greatly. Thus everyone in Great Britain had their life savings invested in virtually worthless stocks.Life during the bubble for the people was successful while after the bubble people were in a panic and unsuccessful. The price of the stock increased by nearly 10 times the original price before collapsing due to fraud and corruption of the leading directors of the company. The success during the bubble created British pride and also the British people were in belief they were going to be rich in the future. After the bubble people realized how terrible of a position they were in and the stock that they had invested in was worthless creating a panic. In the beginning of the bubble people believed the stock was reliable and safe because so many wealthy and powerful people were investors. SSC took out a 10 million loan from the British Government.Harley, Earl of Oxford, wanted to improve the British Government's finances by paying back £10 million of debt, including military debentures.

On 9 June 1720 Parliament passed a bill for the so called Bubble Act actually a name attached to this act much later, in the early 19th century officially named "An Act for better securing certain Powers and Privileges, intended to be granted by His Majesty by Two Charters, for Assurance of Ships and Merchandize at Sea, and for lending Money upon Bottomry; and for restraining several extravagant and unwarrantable Practices therein mentioned.The reason that this bubble was different was because the bubble itself could've been solved quietly, yet due to the fact that somebody leaked the information, the entire situation went downhill and everything crashed.

New First Lord of the Treasury Robert Walpole was forced to and attempted to introduce multiple measures to restore the public's confidence. The stock of the South Sea Company was split up and divided amongst the Bank of England and the East India Trading Company, while many of the company's directors were forced to assist victims of the collapse. Methods to help out the victims were taking much of their assets and giving it back to said victims, particularly their large estates that they owned. Under Walpole's jurisdiction and guidance, England's Parliament attempted to deal with this massive debt and situation. One resolution they proposed was that "the bankers be tied up in sacks filled with snakes and tipped into the murky River Thames." Overall, this major bubble crisis led to serious damage done to King George I's credibility.