Monday, January 29, 2018

South Seas

The year was 1711. Britain was meddling in several wars. The War of Spanish Succession. And there was a big quarrel between the Czar of Russia and Sweden which in those days had a king, ambitions for world domination and a colony in Delaware. And, for the Brits, there were the never ending traditional disputes with the French about pretty much everything. Meanwhile, George I of England was anxious to participate more fully in continental family maneuvering, a victory here, a victory there, but he was informed that his treasury was nine million pounds in debt. A truly ridiculous amount of money back then. A couple of bright sparks from Treadneedle Street, which was, and maybe still is, the financial district in the City of London came up with a scheme to solve the problem. A public private partnership. The private sector would sell shares in what they called the South Sea Company and raise money to help fill the national treasury. And the thing about the War of Spanish Succession was what might happen to the South Seas, a part of the world we now days call South America and which many years previously the Pope had given to Spain.

In 1711 a person who had resources to spare could buy shares in the South Seas Company. And many who did so kind of reckoned that in due course the British Government and the South Seas Company would pull itself together and do to South America what the British Government and the East India Company monopoly had done to the far east. There'd be fortunes to be made, dreams of Country Houses staffed by butlers, downstairs maids and probably Fox Hunting. All a person had to do was risk everything, sit back and wait, and if necessary borrow more money to invest in this new South Seas Company. Well, as Daniel Defoe, the trader, writer, pamphleteer and English Speaking spy pointed out, because Spaniards were quarrelling about who was the rightful heir to the Spanish Peninsular and what with everything else going on in the world, including north American English Speaking colonists fighting the indigenous peoples of the Carolinas, Spain had it's own financial interests and they weren't going to just give up on their monopoly of South America. Either way, 1711 is one of those few dates a person finds easier and easier to remember.

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