South Sea Company founded

(469 words)

Historical Context Note

By 1710 British finance was decisively dominated by the Bank of England and the East India Company, both of which were controlled by a small circle of Whig magnates. The Bank had £5m of nominal capital and such was its power that a 6% loan issued in February 1709 had attracted well over £2m in four hours, many would-be takers being turned away. For the time, this was an incredible sum of money. Robert Harley, the First Minister, therefore came up with a scheme to found The South Sea Company with the principal object of dealing with the problem of the government's increasingly large floating debt. (The fiscal aspect of the proposal provoked a forensic critique from Harley's former propagandist, Daniel Defoe, in his “An Essay on …

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Citation:
Clark, Robert. "South Sea Company founded". The Literary Encyclopedia. First published 18 October 2008
[http://www.litencyc.com/php/stopics.php?rec=true&UID=1025, accessed 23 October 2014.]