The South Sea Bubble was one of the most glittering bubbles that ever dazzled the eyes of speculators. The South Sea Company had been established by Harley, Lord Oxford, in 1711, to relieve taxation. The floating debts at that time amounted to nearly ten millions, and the Lord Treasurer wished to establish a fund to pay off that sum. The interest was secured by making permanent the duties on wine, vinegar, tobacco, and certain other commodities; and creditors were attracted by the promise of a monopoly of trade with the Spanish coasts of America. This scheme was regarded by friends of the Government as a masterpiece of finance, and it was sanctioned both by Royal Charter and Act of Parliament. The leading merchants thought highly of the scheme, and the nation saw in it an El Dorado. People recalled the discoveries of Drake and Raleigh, and spoke of the Spanish coasts of America as though they were strewn with gold and gems. The Peace of Utrecht ought to have done something to destroy these illusions, for instead of England being granted free trade with the Spanish colonies in America, Spain only gave England the Asiento treaty, or contract for supplying negro slaves, the privilege of annually sending one ship of less than five hundred tons to the South Sea, and establishing certain factories. The first ship of the South Sea Company, the _Royal Prince_, did not sail until 1717, and the next year war broke out with Spain, and all British goods and vessels in Spanish ports were seized. Nevertheless, the South Sea Company flourished; its funds were high, and it was regarded as a sort of rival to the Bank of England. At the close of 1719 Stanhope’s Administration was anxious to buy up and diminish the irredeemable annuities granted in the last two reigns, and amounting to £800,000 per annum. Competing schemes to effect this were sent in by the South Sea Company and the Bank of England, and the two corporations tried to outbid one another; they went on increasing their offers until at last the South Sea Company offered the enormous sum of £7,500,000, which the Government accepted. The South Sea Company had the right of paying off the annuitants, who accepted South Sea stock in lieu of Government stock, and two-thirds of them agreed to the offer of eight and a quarter years’ purchase. There seemed no shadow of doubt in any quarter that this was a most satisfactory solution of the difficulty. The South Sea Company was everywhere regarded as prosperous.