South Sea Bubble
2 of the 6 encyclopedias on this shelf carry an entry for South Sea Bubble. Both are reproduced below, so you can see where they agree and where they differ.
Aiton's Encyclopedia (1910)
a speculative scheme, originating in England early in the eighteenth century. In 1711 a company of merchants, headed by the Earl of Oxford, agreed to advance the government 10,000,000 to pay off the floating debt. In return the government guaranteed the company six per cent interest on the loan and granted a monopoly of trade in the South Sea. The prospect of profitable trade with Brazil gave the stock of the South Sea Company an enormous market value. Investors were wild to buy shares. Prices of stock rose day by day to fabulous figures. Sixty per cent profits were assured. In 1720 Parliament, by vote of both houses, actually consented to have the company carry the entire national debt of $150,000,000. Stock rose to 890, nearly nine times its face value. Then a crash came. The stock became worthless. Thousands of people were ruined. Earls, duchesses, members of the House, and high officials were convicted of bribery. Millions of dollars' worth of stock had been exchanged for influence. Out of the amount owed the company by the government and through the collection of fines, it was found possible to pay honest investors one third of the face value of the stock. The scheme was very similar to the Louisiana Scheme organized in France by John Law at about the same time. See Law ; Tontine
Collier's New Encyclopedia (1921)
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 national debt (at this time about 000,000) in consideration of receiving $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.
What Has Changed in the Last Century
Both accounts treat the affair as a story of paper speculation and fraud, and on those facts they hold up: the 1720 scheme to swallow the national debt, the promises of 60 per cent, the collapse that ruined thousands, and the disgrace of the chancellor of the exchequer, John Aislabie, who was expelled from the Commons. What neither Aiton's in 1910 nor Collier's in 1921 mentions is what the South Sea Company actually traded in. Its chief asset was the Asiento won from Spain in 1713, the contract to ship enslaved Africans to Spanish America, and modern accounts of the Bubble put that slaving business at the centre rather than the "prospect of profitable trade with Brazil". Historians since the 1990s have also grown less willing to read 1720 as simple mass madness, treating the debt-for-equity conversion as a serious, if reckless, piece of public finance; the company itself was not wound up until 1853, and Parliament's response, the Bubble Act restricting joint-stock companies, stayed on the books until 1825.
Written for this edition, 2026.