It is 200 years since the South Sea Bubble, the bursting of a company which has been called ‘The First Crash’. The failure of this company caused a national crisis. This was triggered by the mania for gambling rife among the English and the French at the time. This had extended to a speculation on a national dimension, in company shares. But it was more than that, and the consequences of the failure were enormous and far-reaching.
Three companies
The laws defining and controlling companies were in quite early days, but not so early that it was considered that the nation’s credit structure rested on three companies: the Bank of England (1694), the East India Company (1600) and the fledgling South Sea Company (1711). Of the first two, their purposes were apparent, for the Bank of England had been founded to take over the National Debt, and to be the bank to the government, while the East India Company already had a flourishing
