SOUTH SEA COMPANY, THE. An Eng lish commercial company incorporated in lin. It was a financial scheme organized by the Lord Treasurer Harley for the purpose of extinguishing the national debt, which then to £10, 000,000. The company assumed the debt on condi tion of receiving from the Government au annual payment of £600,000 for a certain number of years and a monopoly of trade to the South Seas. It also secured from the Spanish Government the con tract of supplying the Spanish-American colonies with slaves, and proposed to engage in whale fish eries. On the strength of its purely prospective profits, the value of the company's stock increased enormously. In the spring of 1720 it proposed to assume the entire national debt. which was at that time over thirty millions, on being guaran teed five per cent. per annum for seven mud a half years. At the end of this time the debt might be redeemed, if the Government chose, and the inter est reduced to four per cent. The directors used every means to increase the value of the stocts, until in the beginning of August, 1720, the shares were quoted at 1000, when the chairman and some of the principal directors sold out. This
flagrant conduct and the failure of Law's Mississippi Scheme in France opened the eyes of the public, and at the end of 1720 the crash came. Thousands of innocent stockholders were ruined. Parliamentary investigation revealed a scandalous complicity on the part of a number of the Cabinet. By the able manner in which be afforded relief to the unfortunate stockholders. Sir Robert Walpole (q.v.), the new Chancellor of the Exchequer, acquired great popularity. The directors were deprived of their ill-gotten gains and almost one-third of the original capital was saved for the stockholders. Consult: Mackay, Memoirs of Extraordinary Popular Delusions (London, 1852) ; Coxe, Memoirs of Sir Robert IFteipo/c (London, 1802).