Even the Bank of Bombay, believed to be as solid as the 'Old
Lady' of Threadneedle Street, had to suspend, and the commercial distress
was frightful.
"But it left its lesson behind it; and since that time Bombay has patiently
and painfully regained its former solid prosperity. It has recovered what
it lost, and is now steadily increasing in population and wealth."
"I never heard of the South Sea Bubble of which you speak," said Louis.
"That is not strange, as it was an affair of one hundred and eighty-one
years ago," replied Lord Tremlyn. "I have not time now to describe it in
full. The floating debt of England at that time was L10,000,000; and the
Earl of Oxford concocted a scheme to pay it off, and formed a company of
merchants for that purpose. The riches of the South Sea Islands, including
South America, were most extravagantly estimated at that time, and the
monopoly of the trade was secured by the company formed. The 'South Sea
Company' was bolstered up by the pledge of the duties on the imports from
these far-off regions, and the shares sold like wild-fire, increasing in
price in the most extraordinary manner. Shares at a par of L100 were quoted
at L550 in May, and L890 in June.
"The failure of the Mississippi Scheme, projected in France by John Law to
develop the resources of the American State of Louisiana, alarmed the
shareholders; but the managers declared that they had avoided the errors of
Law in their finances, and the enterprise still prospered.
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