South Sea Bubble
a disastrous financial speculation which arose in England in the beginning of the 18th century. It originated with the directors of a jointstock company, which, in consideration of certain exclusive privileges of trading to the South Seas, offered the government easier terms for the advance or negotiation of loans than could be obtained from the general public. In 1720 the proposal of the company to take over the entire 000,000) in consideration of receiving national debt (at this time about $155,annually 5 per cent., was accepted, and the company promised in return for this privilege (as it was regarded) a premium in their own stock of $37,500,000. Professing to possess extensive sources of revenue, the directors held out promises to the public of paying as much as 60 per cent on their shares. It became soon apparent that such magnificent promises could never be fulfilled, and in a few months' time the collapse came which ruined thousands. The directors had been guilty of fraudulent dealings, and the chancellor of the exchequer and others in high positions were implicated.