South Sea Bubble was a financial crash that shook the British government in the early 1700’s. The South Sea Company, formed in 1711 to increase British trade with Spanish America, established a trade monopoly in 1718 by bribing members of Parliament. In return, the company took over the national debt. Speculation quickly raised the price of its shares from 100 pounds to 1,000 pounds. By 1720, it became obvious that the company’s profits did not justify the increase, and a panic set in. Share values tumbled in a catastrophic burst of selling, and thousands of investors were ruined.
