In 1711 the South Sea Co. received from the English Crown a chartered monopoly on trade with the "New World"-in short, a very lucrative implicit subsidy. At about the same time, Parliament had embarked on a plan to reduce the amount of publicly held debt, and the South Sea Co. answered the call. It became both the largest holder of and issuer of benchmark debt in England. The company's stock, unsurprisingly, rose within months from 128 to more than 1,000 pounds, investors perceiving that government ties made the company too big to fail. Soon, however, a downturn in trade from the Americas caused market nervousness.
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