From the treaty the British expected amazing
results. The South Sea Company was formed to carry on a vast
trade with South America. One ship a year could, of course, carry
little, but the ships laden with negroes could smuggle into the
colonies merchandise and the one trading ship could be and was
reloaded fraudulently from lighters so that its cargo was
multiplied manyfold. Out of the belief in huge profits from this
trade with its exaggerated visions of profit grew in 1720 the
famous South Sea Bubble which inaugurated a period of frantic
speculation in England. Worthless shares in companies formed for
trade in the South Seas sold at a thousand per cent of their face
value. It is a form of madness to which human greed is ever
liable. Walpole's financial insight condemned from the first the
wild outburst, and his common sense during the crisis helped to
stem the tide of disaster. The South Sea Bubble burst partly
because Spain stood sternly on her own rights and punished
British smugglers. During many years the tension between the two
nations grew.
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