Events in France now come to influence…
February 1719 CE
Events in France now come to influence the future of the South Sea company.
A Scottish economist and financier, John Law, exiled after killing a man in a duel, had traveled around Europe before settling in France.
Here he has founded a bank, which in December 1718 had become the Banque Royale, national bank of France, while Law himself has been granted sweeping powers to control the nation’s economy, which operates largely by Royal decree.
Law's remarkable success, known throughout Europe in financial circles, now comes to inspire Blunt and his associates to make greater efforts to grow their own concerns.
Craggs explains to the House of Commons in February 1719 a new scheme for improving the national debt by converting the annuities issued after the 1710 lottery into South Sea stock.
By Act of Parliament, the company is granted the right to issue eleven hundred and fifty pounds of new stock for every one hundred pounds of annuity that is surrendered.
The government will pay five percent on the stock created, which will halve their annual bill.
The conversion is voluntary, amounting to two and a half million pounds in new stock if all convert.
The company is to make an additional new loan to the government pro-rata up to seven hundred and fifty thousand pounds, again at five percent.