The Committee of Inquiry on the South Sea Bubble publishes its findings.

The South Sea Bubble of 1720 was one of the first but by no means the last or the worst of capitalism’s great bubbles. As with all the others, it made some rich and impoverished many. In a single year, obsessive trading in the stocks of Britain’s South Sea Company increased the price from just over £100 to almost £1,000 per share. Before 1720 was out, the price had plunged to well below its starting-point.

The South Sea Company, founded to consolidate and reduce state debt and to have a monopoly trade in the South Seas – the Spanish-controlled territory of Latin America had managed to disguise the fact that it could not turn a profit on either venture. The former because the dividend returns promised to investors outstripped the interest the Crown was prepared to pay. The latter because, for most of the life of the South Sea Company, Britain was at war with Spain and – consequently – the chances that Spain would grant extensive trade rights within its own sphere of influence to a British company were, shall we say, remote. The bubble brought share trading into disrepute. Traders and investors alike were seen as venal and corrupt, seeking something for nothing – the solid something reflected in the bubble’s shimmering surface.