What is the significance of the South Sea Bubble?

The bubble, or hoax, centred on the fortunes of the South Sea Company, founded in 1711 to trade (mainly in slaves) with Spanish America, on the assumption that the War of the Spanish Succession, then drawing to a close, would end with a treaty permitting such trade.

How much money was lost in the South Sea Bubble?

Newton did, however, lose a great deal of money in the bubble – possibly as much as $20 million in current terms – having sold his South Sea stock at an early stage, later re-entering the market and investing his entire fortune in the Company.

Why was there a South Sea Bubble in 1720?

…what became known as the South Sea Bubble. In 1720 there was an incredible boom in South Sea stock, as a result of the company’s proposal, accepted by Parliament, to take over the national debt. The company expected to recoup itself from expanding trade, but chiefly from the foreseen rise in the value of its shares.

What did the South Sea Company do after 1720?

After 1720, when the overinflated value of the South Sea Company stock dramatically rose and fell, the company maintained its involvement in the Spanish American colonies.

How did bribes influence the South Sea Bubble?

Bribes made to members of Parliament influenced the passage of the act, in which the South Sea Company made a new loan to the government of approximately £7.5 million. Additionally, the company acquired £31.5 million in unconsolidated government debt in exchange for converting the debt into more company shares.

Who was the Governor of the South Sea Bubble?

The success of the first voyage in 1717 was only moderate, but King George I of Great Britain became governor of the company in 1718, creating confidence in the enterprise, which was soon paying 100 percent interest. …what became known as the South Sea Bubble.