South Sea Company Stock Assignment - 1730

Assignment of proceeds of the sale of South Sea Company stock dated August 8, 1730. This document is signed by William Thomas, Fellow of Winchester College and is over 278 years old. The document was addressed to Charles Lockyer, Esq - Accountant of the South Sea Company.




South Sea Bubble

The South Sea Bubble (1711 - September 1720) is the name given to the economic bubble which occurred due to overheated speculation in and subsequent disastrous collapse of the South Sea Company.

The company was formed in 1711 by Robert Harley, and was granted exclusive trading rights in Spanish South America. The trading rights were pre-supposed on the successful conclusion of the War of the Spanish Succession, which did not end until 1713, and the actual granted treaty rights were not as comprehensive as Harley had hoped. In return for the rights the company had taken on around £10 million of government bonds, exchanging them with the holders for stock in the company at 6% interest.

The company did not undertake a trading voyage to South America until 1717 and made little actual profit, and when Spain and Britain returned to enmity in 1718 the short-term prospects of the company were very poor, but the company argued its longer-term future would be extremely profitable. In 1717 the company took on a further £2 million of public debt.

In 1719 the company proposed a scheme by which it would take on the entire remaining national debt of Britain (£30,981,712), offering its own stock at 5% in exchange for government bonds in a deal lasting until 1727, the Bank of England proposed a similar deal. The company hoped to make a considerable profit and did much to advertise the proposal which was accepted in a slightly altered form in April, 1720.

The company then set to talking up its stock with "the most extravagant rumours" of the value of its potental trade, and there was an enormous wave of "speculating frenzy". The share price had been rising from the time the scheme was proposed - from £128 in January 1720, to £175 in February, £330 in March and following the schemes acceptance to £550 at the end of May. A number of other joint-stock companies then joined the market, making usually fraudulent claims about other foreign ventures or bizarre schemes, they were nicknamed 'bubbles'. In June the Bubble Act required all joint-stock companies to have a Royal Charter. The grant of a charter to the South Sea was an added boost, its shares leapt to £890 in early June, this peak encouraged people to start to sell and the company directors ordered their agents to buy which propped the price up at around £750. The price finally reached £1,000 in early August and the level of selling was such that the price started to fall, triggering bankruptcies amongst those who had bought on credit and increased selling. The price fell slowly throughout August down to around £700. The attempts by the company directors to talk up the price failed and it continued to fall into September, the stockholders had lost confidence and a run started.

By the end of September the stock had fallen to £150. The company failures now extended to banks and goldsmiths as they could not collect loans made on the stock, thousands of individuals were ruined (including many members of the aristocracy). With investors outraged Parliament was recalled in December and an investigation was begun. Reporting in 1721 it revealed widespread fraud among the company directors. Robert Walpole, who had argued against the scheme from the beginning, was forced to introduce a series of measures to restore public confidence.

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Winchester College is a well-known boys' independent school, and an example of an English public school, in the city of Winchester in Hampshire, England. Officially known as Collegium Sanctae Mariae prope Wintoniam (or Collegium Beatae Mariae Wintoniensis prope Winton), or St Mary's College near Winchester, the college is commonly referred to as "Win: Coll:" or just "Winchester". Winchester has existed for over six hundred years - the longest unbroken history of any school in England. It is one of the original nine English public schools as defined by the Public Schools Act 1868.

Winchester College was founded in 1382 by William of Wykeham, Bishop of Winchester and Chancellor to Richard II, and the first seventy poor scholars entered the school in 1394. It was founded in conjunction with New College, Oxford, for which it was designed to act as a feeder: the buildings of both colleges were designed by master mason William Wynford. This double foundation was the model for Eton College and King's College, Cambridge some 50 years later (a sod of earth from Winchester and a number of scholars were sent to Eton for its foundation), and for Westminster School, Christ Church, Oxford and Trinity College, Cambridge in Tudor times.

History from Wikipedia and OldCompanyResearch.com (old stock certificate research service).