The document discusses the financial and economic situation in Britain in the early 18th century, including deficit financing and the South Sea Bubble financial crisis. It notes that Britain had a large national debt with no parliamentary influence. To help pay off the debt, the government established taxes and granted the South Sea Company a monopoly on trade with Spanish colonies. This led to a speculative bubble as shares of the South Sea Company rose dramatically then crashed in 1720. The document also discusses Robert Walpole's later efforts as First Lord of the Treasury to introduce a sinking fund to reduce the national debt through the 1730s.
4. Exclusive monopoly of the trade
with Spanish colonies
(Treaty of Utrecht)
Fund British National Debt
5. ?To pay ? 7,000,000.
?To be the sole creditor of the Government.
?To reduce interests.
Government
6. Everyone began to buy shares in the company.
0
200
400
600
800
1000
1200
1719 1720
Chart TitleSouth Sea Company Shares
? Modest income from the trade with Spanish
Colonies
? Creation of other companies around the South
Sea Company.
7. Could not afford to pay
for the shares
South Sea Company
PEOPLE
Lend their debtors
money to pay off the
due
SOUTH
SEA
BUBBLE
8. ROBERT WALPOLE
1721 - Back in Government's financial affairs
1721 - 1745 First Lord of the Treasury
? Introduced the SINKING FUND
to reduce the national debt
? Reduction of the annual interest :
2,57 in 1721 1,89 in 1741
1737 - Queen Caroline died: his position began
to weaken
9. Excise
Bill
Walpole
1733 - 1739
Duties on wine and tobacco only paid if
taken for internal consumption out of the
warehouses.
? To check smuggling
? Allowing goods to be re-exported without duties:
London and others: free ports
? Retain the land tax at low prices
