Jeffersonian Republican. [volume] (Stroudsburg, Pa.) 1840-1853, 1851-08-28
The SoutI, Sea Scheme.

OXfoFd, IN Hi, Tor political purposes and
so much admired was the ingenuity of the
scheme, that it was called "The Earl of Ok.
ford's Masterpiece. The Company, which
consisted ofmerchants, undertook the payment
ola large quantity of ofGovernmentdebta amount.
ing to fl0,000,000 sterling; and in return fol
this they were invested with numerous privi.
leges, mong which was monopoly of the
trade in the South Sea; now more usually called
the Pacific Ocean. The idea was, that by
means of commerce with Peru, Mexico, and
other gold producing countries, Britain would
soon be filled with the precious metals. Owing,
however, to the refusal of Spain to permit the
commerce with her transatlantic dominions,
no voyage was made under the Company's
auspices till 17l7, when single ship set out;
and even this slight thread of connection be-
tween Britain and the South Seas was snap.
ped by the outbreak of war with Spain in
the following year.
Still the Company fourished as a moneta-
ry concern; and in 1920 it and the Bank OF
England made rival offers to Government,
contracting for the payment of the debts Of
the State, now amounting to about f3l ,000,-
900 sterling. The ultimate offer of the South
Sea Company was, that in return for under
taking the discharge of the debt, it should be
secured per cent. interest for. four years /;
after which Government was to be at liberty
to redeem the debl, paying only per cent.
interest till the redemption should be effect
ed. After warm discussion in the House
of commons between the friends of the South
Sea Company and the friends of the Bank,
offer of the former was declared the more ad-
vantageous, and leave given to bring in bill
to that effect.
Immediately the South Sea Company oc-
cupied the public eye; and every person who
possessed capital, desired to invest in concern
of such splendid promise. The day after the
passing of the above resolution, the Compa-
ny's stock rose from 130 to 300 and notwith-
standing all the predictions of the more pru-
dent men of the nation, among whom was
Mr.. Walpole, 1t continued to rise. The con-
tagion of the Mississippi frenzy had reached
England /; and although by this time the fail
ure of Laws scheme might have been evident,
this did not hinder the English from rushing
into similar folly. Great efforts were like
wise made by Sir John Blunt, the Chairman
of the Company, aud other interested parties,
to initiate the public mind with the most ex-
travagant rumors and anticipations, with a
view still further to raiseshe price of stock !;
and by the time that the bill-after passing
the House Of Commons by majority of 472
to %, and the House of Lords by a majority
of So to 17-received the royal assent, the
price had almost risen to 400. alt seemed
at that time as if the whole nation had turn
ed stock k-jobbers. Exchange Alley was every
day blocked up by crowds, and Cornhill was
impossible from the number of carriages
Everybody came to purchase stock. Every
fool aspired to be knave.'"
The apparent success of the South Sea
Scheme led to many other projects equally
extravagant In all, the share lists were
speedily filed up, and an enormous traffic
carried on in shares, while of course every
means was resorted to to raise them to an ar
tifcial value in the market. These schemes
soon received the name of bubbles, the most
appropriate that inauguration could devise.
Persons of distinction, of both sexes, were
deeply engaged in all these bubbles; those of
the male sex going to taverns and coffee hou-
ses to meet their brokers, and the ladies re-
sorting for the same purposes to the shops of
milliners and haberdashers The Prince of
Wales became Governor of one company, and
is said to have cleared 100000 by his specu-
lations. So great was the confusion of the
crowd in the Alley, that shares in the same
bubble were known to have been sold at the
same instant 10 per cent. higher at one end of
the Alley than at the other.
Unlike the Mississippi Scheme, which was
complicated affair, and really was founded
on the reasoning of an able man, however,
false that reasonining may have been, the
South Sea project was pure and simple bub-
bic, blown by the breath of knaves, and ac-
cordingly its explosion was instantaneous
When the price of stock had reached its high
est, the Chairman of the Company, Sir John
Blunt, and other influential persons, sold out !;
and as soon as this became known, the fall
commenced. On sudden, stock fell from
1000 to 700 A public meeting OF share-hol-
ders was then held, at which many speeches
were delivered by the principal parties con-
cerned, most of them scouting the panic as
utterly groundless and declaring that the af-
fairs of the Company stood as well as ever
In va In were all the affemDts to arrest the