75-1133: Edward Turner may refer to: Sir Edward Turner, 1st Baronet (1691–1735), first of the Turner baronets Sir Edward Turner, 2nd Baronet (1719–1766), British politician Edward Turner (judge) (1778–1860), Justice of the Supreme Court of Mississippi Edward Turner (chemist) (1798–1837), British chemist Edward Beadon Turner (1854–1931), English medical administrator and rugby union international Edward Turner (cricketer) (1858–1893), Australian cricketer Edward C. Turner (1872–1950), American lawyer and judge in Ohio Edward George Turner (1872–1962), British film entrepreneur Edward Raymond Turner (1873–1903), British inventor and cinematographer Edward Turner (footballer) (1877–?), Northern Ireland international footballer Edward Turner (motorcycle designer) (1901–1973), British motorcycle designer Edward Clark Turner (1915–1997), American bishop of
150-466: A feverish interest in investing: in South Seas primarily, but in stocks generally. One famous apocryphal story is of a company that went public in 1720 as "a company for carrying out an undertaking of great advantage, but nobody to know what it is". The price finally reached £1,000 in early August 1720, and the level of selling was such that the price started to fall, dropping back to £100 per share before
225-489: A foreign consortium, Decker £49,000, Sir Ambrose Crawley £36,791. The company had a Sub-Governor, Bateman; a Deputy Governor, Ongley; and 30 ordinary directors. In total, nine of the directors were politicians, five were members of the Sword Blade consortium, and seven more were financial magnates who had been attracted to the scheme. The company created a coat of arms with the motto A Gadibus usque ad Auroram ("from Cadiz to
300-435: A further 7.5% for a financial adviser, Manasseh Gilligan. Some company board members refused to accept the contract on these terms, and the government was obliged to reverse its decision. Despite these setbacks, the company continued, having raised £200,000 to finance the operations. In 1714 2,680 slaves were carried, and for 1716–17, 13,000 more, but the trade continued to be unprofitable. An import duty of 33 pieces of eight
375-662: A man in a duel, had travelled around Europe before settling in France. There he founded a bank, which in December 1718 became the Banque Royale, national bank of France, while Law himself was granted sweeping powers to control the economy of France, which operated largely by royal decree. Law's remarkable success was known in financial circles throughout Europe, and now came to inspire Blunt and his associates to make greater efforts to grow their own concerns. In February 1719 Craggs explained to
450-581: A new company formed for the purpose, the South Sea Company, which in return would issue them shares in itself to the same nominal value. The government would make an annual payment to the Company of £568,279, equating to 6% interest plus expenses, which would then be redistributed to the shareholders as a dividend. The company was also granted a monopoly to trade with South America, a potentially lucrative enterprise, but one controlled by Spain – with which Britain
525-451: A total of £9 million was owed by the government, with no specifically allocated income to pay it off. Robert Harley and John Blunt had jointly devised a scheme to consolidate this debt in much the same way that the Bank of England had consolidated previous debts, although the Bank still held the monopoly for operating as a bank. All holders of the debt (creditors) would be required to surrender it to
600-740: The Secretary of the Treasury , William Lowndes (who had had significant responsibility for reminting the entire debased British coinage in 1696) and John Aislabie (who represented the October Club , a group of about 200 MPs who had agreed to vote together). Harley's first concern was to find £300,000 for the next quarter's payroll for the British army operating on the Continent under the Duke of Marlborough . This funding
675-501: The South Sea Bubble . The Bubble Act 1720 ( 6 Geo. 1 c. 18), which forbade the creation of joint-stock companies without royal charter , was promoted by the South Sea Company itself before its collapse. In Great Britain, many investors were ruined by the share-price collapse, and as a result, the national economy diminished substantially. The founders of the scheme engaged in insider trading , by using their advance knowledge of
750-593: The Treasurer to the Navy, Hampden , who invested £25,000 of government money on his own behalf. The proposal was accepted in a slightly altered form in April 1720. Crucial in this conversion was the proportion of holders of irredeemable annuities who could be tempted to convert their securities at a high price for the new shares. (Holders of redeemable debt had effectively no other choice but to subscribe.) The South Sea Company could set
825-567: The War of the Quadruple Alliance . The company's assets in South America were seized, at a cost claimed by the company to be £300,000. Any prospect of profit from trade, for which the company had purchased ships and had been planning its next ventures, disappeared. Events in France now came to influence the future of the company. A Scottish economist and financier, John Law , exiled after killing
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#1733093584807900-539: The Act gave a boost to the South Sea Company, its shares leaping to £890 in early June. This peak encouraged people to start to sell; to counterbalance this the company's directors ordered their agents to buy, which succeeded in propping the price up at around £750. The price of the stock went up over the course of a single year from about £100 to almost £1,000 per share. Its success caused a country-wide frenzy— herd behavior —as all types of people, from peasants to lords, developed
975-648: The Bank of England's monopoly. The task of the Company Secretary was to oversee trading activities; the Accountant, Grigsby, was responsible for registering and issuing stock; and the Cashier, Robert Knight, acted as Blunt's personal assistant at a salary of £200 per annum. The Treaty of Utrecht of 1713 granted Britain an Asiento de Negros lasting 30 years to supply the Spanish colonies with 4,800 slaves per year. Britain
1050-435: The Bank proposed to undertake the conversion with a payment of £5.5 million and a fixed conversion price of £170 per £100 face-value Bank stock. On 1 February, the company negotiators led by Blunt raised their offer to £4 million plus a proportion of £3.5 million depending on how much of the debt was converted. They also agreed that the interest rate would decrease after four years instead of seven, and agreed to sell on behalf of
1125-701: The Company was restructured and continued to operate for more than a century after the Bubble. The headquarters were in Threadneedle Street , at the centre of the City of London , the financial district of the capital. At the time of these events, the Bank of England was also a private company dealing in national debt, and the crash of its rival confirmed its position as banker to the British government. When in August 1710 Robert Harley
1200-531: The Episcopal Diocese of Kansas Edward M. Turner (1918–1996), American Episcopal prelate Ed Turner (television executive) (c. 1934–2002), CNN executive vice president Eddie Turner (fl. 1970s–2010s), guitarist Ed Turner (basketball) (born 1957), American basketball player See also [ edit ] Ted Turner (disambiguation) [REDACTED] Topics referred to by the same term This disambiguation page lists articles about people with
1275-449: The House of Commons a new scheme for improving the national debt by converting the annuities issued after the 1710 lottery into South Sea stock. By Act of Parliament, the company was granted the right to issue £1,150 of new stock for every £100 per annum of annuity which was surrendered. The government would pay 5% per annum on the stock created, which would halve their annual bill. The conversion
1350-468: The King. Shares in the company were "sold" to politicians at the current market price; however, rather than paying for the shares, these recipients simply held the shares, with the option of selling them back to the company at any time, receiving the increase in market price. This method, as well as winning over the heads of government, the King's mistress, et al. , had the advantage of binding their interests to
1425-469: The Spaniards are to be divested of common sense, infatuate, and given up, abandoning their own commerce, throwing away the only valuable stake they have left in the world, and in short, bent on their own ruin, we cannot suggest that they will ever, on any consideration, or for any equivalent, part with so valuable, indeed so inestimable a jewel, as the exclusive trade to their own plantations. The originators of
1500-582: The Whigs between Walpole's faction supporting the Prince of Wales and James Stanhope 's supporting the King. Argyll and Townshend were dismissed as directors, as were surviving Tories Sir Richard Hoare and George Pitt, and King George I became governor. Four MPs remained directors, as did six people holding government financial offices. The Sword Blade Company remained bankers to the South Sea, and indeed had flourished despite
1575-430: The assets of an insurance company. On 22 February 1720, John Hungerford raised the question of bubble companies in the House of Commons, and persuaded the House to set up a committee, which he chaired, to investigate. He identified a number of companies which between them sought to raise £40 million in capital. The committee investigated the companies, establishing a principle that companies should not be operating outside
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#17330935848071650-442: The board and replaced with businessmen. The Whigs Horatio Townshend, brother in law of Robert Walpole , and the Duke of Argyll were elected directors. The change of government led to a revival of the company's share value, which had fallen below its issue price. The previous government had failed to make the interest payments to the company for the preceding two years, owing more than £1 million. The new administration insisted that
1725-607: The bubble companies investigated were two supported by Lords Onslow and Chetwynd respectively, for insuring shipping. These were criticised heavily, and the questionable dealings of the Attorney-General and Solicitor-General in trying to obtain charters for the companies led to both being replaced. However, the schemes had the support of Walpole and Craggs , so that the larger part of the Bubble Act (which finally resulted in June 1720 from
1800-497: The committee's investigations) was devoted to creating charters for the Royal Exchange Assurance Corporation or London Assurance Corporation. The companies were required to pay £300,000 for the privilege. The Act required that a joint stock company could be incorporated only by Act of Parliament or royal charter . The prohibition on unauthorised joint stock ventures was not repealed until 1825. The passing of
1875-550: The companies had no legal basis, while others (such as the Hollow Sword Blade Company, which acted as the South Sea Company's banker), used existing chartered companies for purposes entirely different from those designated at their creation. The York Buildings Company was set up to provide water to London, but was purchased by Case Billingsley who used it to purchase confiscated Jacobite estates in Scotland, which then formed
1950-450: The company ship. He was dismissed as a director, but the result was the beginning of Harley's fall from favour with the company. On 27 July 1714, Harley was replaced as Lord High Treasurer as a result of a disagreement that had broken out within the Tory faction in parliament. Queen Anne died on 1 August 1714; and at the election of directors in 1715 the Prince of Wales (the future King George II )
2025-512: The company's charter was issued on 10 September 1711. The government itself surrendered £0.75 million of its own debt held by different departments (at that time individual office holders were at liberty to invest government funds under their control to their own advantage before it was required for government expenditure). Harley surrendered £8,000 of debt and was appointed Governor of the new company. Blunt, Caswall and Sawbridge together surrendered £65,000, Janssen £25,000 of his own plus £250,000 from
2100-572: The company's dubious legal position. Blunt and Sawbridge remained South Sea directors, and they had been joined by Gibbon and Child. Caswall had retired as a South Sea director to concentrate on the Sword Blade business. In November 1718 Sub-Governor Bateman and Deputy Governor Shepheard both died. Leaving aside the honorary position of Governor, this left the company suddenly without its two most senior and experienced directors. They were replaced by Sir John Fellowes as Sub-Governor and Charles Joye as Deputy. In 1718 war broke out with Spain once again, in
2175-399: The company, based on that of the Bank of England, was drawn up by Blunt who was paid £3,846 for his services in setting up the company. Directors would be elected every three years and shareholders would meet twice a year. The company employed a cashier, secretary and accountant. The governor was intended as an honorary position, and was later customarily held by the monarch. The charter allowed
2250-451: The conversion price but could not diverge much from the market price of its shares. The company ultimately acquired 85% of the redeemables and 80% of the irredeemables. The company then set to talking up its stock with "the most extravagant rumours" of the value of its potential trade in the New World; this was followed by a wave of "speculating frenzy". The share price had risen from the time
2325-841: The current price. The transactions were recorded by Knight in the names of intermediaries, but no payments were received and no stock issued – indeed the company had none to issue until the conversion of debt began. The individual received an option to sell his stock back to the company at any future date at whatever market price might then apply. Shares went to the Craggs: the Elder and the Younger ; Lord Gower ; Lord Lansdowne ; and four other MPs. Lord Sunderland would gain £500 for every pound that stock rose; George I's mistress, their children and Countess Platen £120 per pound rise, Aislabie £200 per pound, Lord Stanhope £600 per pound. Others invested money, including
Edward Turner - Misplaced Pages Continue
2400-458: The dawn", from Juvenal , Satires , 10) and rented a large house in the City of London as its headquarters. Seven sub-committees were created to handle its everyday business, the most important being the "committee for the affairs of the company". The Sword Blade company was retained as the company's banker and on the strength of its new government connections issued notes in its own right, notwithstanding
2475-408: The debt be written off, but allowed the company to issue new shares to stockholders to the value of the missed payments. At around £10 million, this now represented half the share capital issued in the entire country. In 1714 the company had 2,000 to 3,000 shareholders, more than either of its rivals. By the time of the next directors' elections in 1718 politics had changed again, with a schism within
2550-559: The encouragement of the Fishery ) was a British joint-stock company founded in January 1711, created as a public-private partnership to consolidate and reduce the cost of the national debt . To generate income, in 1713 the company was granted a monopoly (the Asiento de Negros ) to supply African slaves to the islands in the " South Seas " and South America . When the company was created, Britain
2625-560: The first year, plus any that might have been added (against standing instructions) by the ship's captains on their own behalf. On arrival of the first cargoes, the local authorities refused to accept the Asiento, which had still not been officially confirmed there by the Spanish authorities. The slaves were eventually sold at a loss in the West Indies. In 1714 the government announced that a quarter of profits would be reserved for Queen Anne and
2700-471: The form of a fixed annuity over a period of years, so that the government effectively held the prize money as borrowings until the whole value had been paid out to the winners. Marketing was handled by members of the Sword Blade syndicate, Gibbon selling £200,000 of tickets and earning £4,500 commission, and Blunt selling £993,000. Charles Blunt (a relative) was made Paymaster of the lottery with expenses of £5,000. The national debt investigation concluded that
2775-402: The founders of the Bank of England and of the financially disastrous Darien Scheme . Harley was rewarded for delivering the scheme by being created Earl of Oxford on 23 May 1711 and was promoted to Lord High Treasurer . With a more secure position, he began secret peace negotiations with France. The scheme to thus consolidate all government debt and to manage it better in the future held out
2850-584: The full court of directors to nominate a smaller committee to act on any matter on its behalf. Directors of the Bank of England and of the East India Company were barred from being directors of the South Sea Company. Any ship of more than 500 tons owned by the company was to have a Church of England clergyman on board. The surrender of government debt for company stock was to occur in five separate lots. The first two of these, totaling £2.75 million from about 200 large investors, had already been arranged before
2925-475: The government was to be used to buy in any debt not subscribed to the scheme, which although it helped the government, also helped the company by removing possibly competing securities from the market, including large holdings by the Bank of England. Company stock was now trading at £123, so the issue amounted to an injection of £5 million of new money into a booming economy just as interest rates were falling. Gross Domestic Product (GDP) for Britain at this point
3000-458: The government £1 million of Exchequer bills (formerly handled by the Bank). The House accepted the South Sea offer. Bank stock fell sharply. Perhaps the first sign of difficulty came when the South Sea Company announced that its Christmas 1719 dividend would be deferred for 12 months. The company now embarked on a show of gratitude to its friends. Select individuals were sold a parcel of company stock at
3075-666: The interests of the company: in order to secure profits, the stock needed to rise. Meanwhile, by publicising the names of their elite stockholders, the company managed to clothe itself in an aura of legitimacy, which attracted and kept other buyers. The South Sea Company was by no means the only company seeking to raise money from investors in 1720. A large number of other joint-stock companies, making extravagant (sometimes fraudulent) claims about foreign or other ventures or bizarre schemes, had been created. Others represented potentially sound, although novel, schemes, such as for founding insurance companies. These were nicknamed "Bubbles". Some of
Edward Turner - Misplaced Pages Continue
3150-399: The manors of Bicester in 1728 and then the manor of Ambrosden in 1729. Turner was made 1st Baronet of Ambrosden in 1733. He died in 1735 and was succeeded by his son Sir Edward Turner, 2nd Baronet . South Sea Company The South Sea Company (officially: The Governor and Company of the merchants of Great Britain, trading to the South Seas and other parts of America and for
3225-542: The national finances, which were suffering from the pressures of two simultaneous wars : the War of the Spanish Succession with France, which ended in 1713, and the Great Northern War , which was not to end until 1721. Harley came prepared, with detailed accounts describing the situation of the national debt, which was customarily a piecemeal arrangement, with each government department borrowing independently as
3300-556: The need arose. He released the information steadily, continually adding new reports of debts incurred and scandalous expenditure, until in January 1711 the House of Commons agreed to appoint a committee to investigate the entire debt. The committee included Harley himself, the two Auditors of the Imprests (whose task was to investigate government spending), Edward Harley (the Chancellor's brother), Paul Foley (the Chancellor's brother-in-law),
3375-470: The objects specified in their charters. A potential embarrassment for the South Sea was avoided when the question of the Hollow Sword Blade Company arose. Difficulty was avoided by flooding the committee with MPs who were supporters of the South Sea, and voting down by 75 to 25 the proposal to investigate the Hollow Sword. (At this time, committees of the House were either 'Open' or 'secret'. A secret committee
3450-547: The offer to the public in July 1719. The Sword Blade company spread a rumour that the Pretender had been captured, and the general euphoria induced the South Sea share price to rise from £100, where it had been in the spring, to £114. Annuitants were still paid out at the same money value of shares, the company keeping the profit from the rise in value before issuing. About two-thirds of the in-force annuities were exchanged. The 1719 scheme
3525-481: The open market at a price that allowed anyone with advance knowledge to buy and resell in the immediate future at a high profit, for as soon as the scheme became publicised the bonds would once again be worth at least their nominal value, as repayment was now more certain a prospect. This anticipation of gain made it possible for Harley to bring further financial supporters into the scheme, such as James Bateman and Theodore Janssen . Daniel Defoe commented: Unless
3600-414: The prospect of all existing creditors being repaid the full nominal value of their loans, which at the time before the scheme was publicised were valued at a discounted rate of £55 per £100 nominal value, as the lotteries were discredited and the government's ability to repay in full was widely doubted. Thus bonds representing the debt intended to be consolidated under the scheme were available for purchase on
3675-407: The same amount to the company for all the fixed-term repayable debt as it had been paying before, but after seven years the 5% interest rate would fall to 4% on both the new annuity debt and also that assumed previously. After the first year, the company was to give the government £3 million in four quarterly installments. New stock would be created at a face value equal to the debt, but the share price
3750-522: The same name. If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Edward_Turner&oldid=1233672569 " Category : Human name disambiguation pages Hidden categories: Short description is different from Wikidata All article disambiguation pages All disambiguation pages Sir Edward Turner, 1st Baronet Sir Edward Turner, 1st Baronet (1691 – 1735)
3825-453: The scheme knew that there was no money to invest in a trading venture, and no realistic expectation that there would ever be a trade to exploit, but nevertheless the potential for great wealth was widely publicised at every opportunity, so as to encourage interest in the scheme. The objective for the founders was to create a company that they could use to become wealthy and that offered scope for further government deals. The royal charter for
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#17330935848073900-505: The scheme was proposed: from £128 in January 1720, to £175 in February, £330 in March and, following the scheme's acceptance, £550 at the end of May. What may have supported the company's high multiples (its P/E ratio ) was a fund of credit (known to the market) of £70 million available for commercial expansion which had been made available through substantial support, apparently, by Parliament and
3975-495: The start of the contract. The Asiento was granted in the name of Queen Anne and then contracted to the company. By July the company had arranged contracts with the Royal African Company to supply the necessary African slaves to Jamaica. Ten pounds was paid for a slave aged over 16, £8 for one under 16 but over 10. Two-thirds were to be male, and 90% adult. The company trans-shipped 1,230 slaves from Jamaica to America in
4050-481: The timings of national debt consolidations to make large profits from purchasing debt in advance. Huge bribes were given to politicians to support the Acts of Parliament necessary for the scheme. Company money was used to deal in its own shares, and selected individuals purchasing shares were given cash loans backed by those same shares to spend on purchasing more shares. The expectation of profits from trade with South America
4125-447: The year was out. This triggered bankruptcies amongst those who had bought on credit, and increased sales, including short selling (i.e., selling borrowed shares in the hope of buying them back at a profit if the price fell). Also, in August 1720, the first of the installment payments of the first and second money subscriptions on new issues of South Sea stock were due. Earlier in the year John Blunt had come up with an idea to prop up
4200-632: Was a "merchant prince" with great wealth from the British East India Company . Both Turner and his father-in-law invested in the South Sea Company , but when the company's stock had risen in price in the South Sea Bubble , they sold their shareholdings at a profit before the price crashed in 1720. Both men then invested their increased wealth in land. Turner bought two manors in Oxfordshire from Sir Stephen Glynne, 3rd Baronet : one of
4275-548: Was a distinct success from the government's perspective, and they sought to repeat it. Negotiations took place between Aislabie and Craggs for the government and Blunt, Cashier Knight and his assistant and Caswell. Janssen, the Sub Governor and Deputy Governor were also consulted but negotiations remained secret from most of the company. News from France was of fortunes being made investing in Law's bank, whose shares had risen sharply. Money
4350-458: Was a significant part of the company's work, and that it was carried out to the standards of the day. Its trading activities therefore offered a financial motivation for investment in the company. The company was heavily dependent on the goodwill of government; when the government changed, so too did the company board. In 1714 one of the directors who had been sponsored by Harley, Arthur Moore, had attempted to send 60 tons of private goods on board
4425-608: Was an 18th-century investor, landowner and baronet . He was born in London the son of John Turner, a well-to-do London merchant (d. 1708) and educated at Bicester Grammar School . Like his father, he became a merchant in London, a Director and sometime Chairman of the East India Company. He served a year as the High Sheriff of Oxfordshire in 1732. In 1718 he married Mary Page, the daughter of Sir Gregory Page, 1st Baronet , who
4500-477: Was an unofficial bank. Sales commenced on 3 March 1711 and tickets had completely sold out by 7 March, making it the first truly successful English state lottery. The success was shortly followed by another larger lottery, "The Two Million Adventure" or "The Classis", with tickets costing £100, with a top prize of £20,000 and every ticket winning a prize of at least £10. Although prizes were advertised by their total value, they were in fact paid out by installments in
4575-545: Was appointed Chancellor of the Exchequer , the government had already become reliant on the Bank of England , a privately owned company chartered 16 years previously, which had obtained a monopoly as the lender to the government. The government had become dissatisfied with the service it was receiving and Harley was actively seeking new ways to improve the national finances. A new parliament met in November 1710 resolved to attend to
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#17330935848074650-415: Was at war. At that time, when the continent of America was being explored and colonized, Europeans applied the term "South Seas" only to South America and surrounding waters. The concession both held out the potential for future profits and encouraged a desire for an end to the war, necessary if any profits were to be made. The original suggestion for the South Sea scheme came from William Paterson , one of
4725-478: Was charged on each slave (although for this purpose some slaves might be counted only as a fraction of a slave, depending on quality). One of the extra trade ships was sent to Cartagena in 1714 carrying woollen goods, despite warnings that there was no market for them there, and they remained unsold for two years. It has been estimated that the company transported a little over 34,000 slaves with mortality losses comparable to its competitors, showing that slave trading
4800-482: Was elected as Governor of the company. The new King George I and the Prince of Wales both had large holdings in the company, as did some prominent Whig politicians, including James Craggs the Elder , the Earl of Halifax and Sir Joseph Jekyll. James Craggs, as Postmaster General, was responsible for intercepting mail on behalf of the government to obtain political and financial information. All Tory politicians were removed from
4875-475: Was estimated as £64.4 million. On 21 January the plan was presented to the board of the South Sea Company, and on 22 January Chancellor of the Exchequer John Aislabie presented it to Parliament. The House was stunned into silence, but on recovering proposed that the Bank of England should be invited to make a better offer. In response, the South Sea increased its cash payment to £3.5 million, while
4950-561: Was involved in the War of the Spanish Succession and Spain and Portugal controlled most of South America. There was thus no realistic prospect that trade would take place, and as it turned out, the Company never realised any significant profit from its monopoly. However, Company stock rose greatly in value as it expanded its operations dealing in government debt, and peaked in 1720 before suddenly collapsing to little above its original flotation price. The notorious economic bubble thus created, which ruined thousands of investors, became known as
5025-518: Was moving around Europe, and other flotations threatened to soak up available capital (two insurance schemes in December 1719 each sought to raise £3 million). Plans were made for a new scheme to take over most of the unconsolidated national debt of Britain (£30,981,712) in exchange for company shares. Annuities were valued as a lump sum necessary to produce the annual income over the original term at an assumed interest of 5%, which favoured those with shorter terms still to run. The government agreed to pay
5100-493: Was much harder to sell and transfer of its ownership was legally much more complex. The government received a cash payment and lower overall interest on the debt. Importantly, it also gained control over when the debt had to be repaid, which was not before seven years but then at its discretion. This avoided the risk that debt might become repayable at some future point just when the government needed to borrow more, and could be forced into paying higher interest rates. The payment to
5175-466: Was one with a fixed set of members who could vote on its proceedings. By contrast, any MP could join in with an 'open' committee and vote on its proceedings.) Stanhope, who was a member of the committee, received £50,000 of the 'resaleable' South Sea stock from Sawbridge, a director of the Hollow Sword, at about this time. Hungerford had previously been expelled from the Commons for accepting a bribe. Amongst
5250-559: Was permitted to open offices in Buenos Aires , Caracas , Cartagena , Havana , Panama , Portobello and Vera Cruz to arrange the Atlantic slave trade . One ship of no more than 500 tons could be sent to one of these places each year (the Navío de Permiso ) with general trade goods. One quarter of the profits were to be reserved for the King of Spain. There was provision for two extra sailings at
5325-517: Was provided by a private consortium of Edward Gibbon (grandfather of the historian ), George Caswall , and Hoare's Bank . The Bank of England had been operating a lottery on behalf of the government, but in 1710 this had produced less revenue than expected and another begun in 1711 was also performing poorly; Harley granted the authority to sell tickets to John Blunt , a director of the Hollow Sword Blade Company , which despite its name
5400-418: Was still rising and sales of the remaining stock, i.e. the excess of the total market value of the stock over the amount of the debt, would be used to raise the government fee plus a profit for the company. The more the price rose in advance of conversion, the more the company would make. Before the scheme, payments were costing the government £1.5 million per year. In summary, the total government debt in 1719
5475-488: Was talked up to encourage the public to purchase shares, but the bubble prices reached far beyond what the actual profits of the business (namely the slave trade) could justify. A parliamentary inquiry was held after the bursting of the bubble to discover its causes. A number of politicians were disgraced, and people found to have profited immorally from the company had personal assets confiscated proportionate to their gains (most had already been rich and remained so). Finally,
5550-533: Was voluntary, amounting to £2.5 million new stock if all converted. The company was to make an additional new loan to the government pro rata up to £750,000, again at 5%. In March there was an abortive attempt to restore the Old Pretender, James Edward Stuart , to the throne of Britain, with a small landing of troops in Scotland. They were defeated at the Battle of Glen Shiel on 10 June. The South Sea company presented
5625-414: Was £50 million: The purpose of this conversion was similar to the old one: debt holders and annuitants might receive less return in total, but an illiquid investment was transformed into shares that could be readily traded. Shares backed by national debt were considered a safe investment and a convenient way to hold and move money, far easier and safer than metal coins. The only alternative safe asset, land,
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