Editing South Sea Company (section)

== A trading company ==
The South Sea Company was created in 1711 to reduce the size of public debts, but was granted the commercial privilege of exclusive rights of trade to the Spanish Indies, based on the treaty of commerce signed by Britain and the [[Charles VI, Holy Roman Emperor|Archduke Charles]], candidate to the Spanish throne during the [[War of the Spanish Succession]]. After [[Philip V of Spain|Philip V]] became the King of Spain, Britain obtained at the 1713 [[Treaty of Utrecht]] the rights to the slave trade to the Spanish Indies (or [[Asiento de Negros]]) for 30 years. Those rights were previously held by the Compagnie de Guinée et de l'Assiente du Royaume de la France.

The South Sea Company board opposed taking on the slave trade, which had shown little profitability when chartered companies had engaged in it. To increase the profitability, the Asiento contract included the right to send one yearly 500-ton ship to the fairs at Portobello and [[Veracruz, Veracruz|Veracruz]] loaded with duty-free merchandises, called the ''Navío de Permiso''. The Crown of England and the King of Spain were each entitled to 25% of the profits, according to the terms of the contract, that was a copy of the French Asiento contract, but [[Anne, Queen of Great Britain|Queen Anne]] soon renounced her share. The King of Spain did not receive any payments due to him, and this was one of the sources of contention between the Spanish Crown and the South Sea Company.

As was the case for previous holders of the Asiento, the Portuguese and the French, the profit was not in the slave trade but in the illegal contraband goods smuggled in the slave ships and in the annual ship. Those goods were sold at the Spanish colonies at a handsome price, for they were in high demand; and constituted unfair competition with taxed goods, proving a large drain on the Spanish Crown's trade income. The relationship between the South Sea Company and the Government of Spain was always bad, and worsened with time. The company complained of searches and seizures of goods, lack of profitability, and confiscation of properties during the wars between Britain and Spain of 1718–1723 and 1727–1729, during which the operations of the company were suspended. The Government of Spain complained of the illegal trade, failure of the company to present its accounts as stipulated by the contract, and non-payment of the King's share of the profits. These claims were a major cause of deteriorating relations between the two countries in 1738; and although the Prime Minister [[Robert Walpole|Walpole]] opposed war, there was strong support for it from the King, the House of Commons, and a faction in his own Cabinet. Walpole was able to negotiate a treaty with the King of Spain at the [[Convention of Pardo]] in January 1739 that stipulated that Spain would pay British merchants £95,000 in compensation for captures and seized goods, while the South Sea Company would pay the Spanish Crown £68,000 in due proceeds from the Asiento. The South Sea Company refused to pay those proceeds and the King of Spain retained payment of the compensation until payment from the South Sea Company could be secured. The break-up of relations between the South Sea Company and the Spanish Government was a prelude to the ''[[War of Jenkins' Ear|Guerra del Asiento]]'', as the first [[Royal Navy]] fleets departed in July 1739 for the Caribbean, prior to the declaration of war, which lasted from October 1739 until 1748. This war is known as the [[War of Jenkins' Ear]].<ref>Nelson (1945) states that the substantial illicit trade pursued by the South Sea Company officials under the Asiento "must be considered as a major cause of the War of Jenkins' Ear because it threatened to destroy the entire commercial framework of the Spanish Empire&nbsp;... Unable to accept the destruction of its commercial system, Spain attempted to negotiate but requested that the company, as an evidence of good faith, should open its accounts for inspection by the Spanish representatives. Naturally, the directors refused, for compliance would have meant the complete exposure of the illegal traffic. Neither Spain nor the South Sea Company would yield. War was the inevitable result".</ref><ref>Brown (1926, p. 663) says that The failure to comply with the accounting provisions of the Asiento treaty (in the context of Spanish knowledge of secret accounts kept by the South Sea Company which would prove clandestine trading) was a constant source of the friction which culminated in armed conflict.</ref><ref>For Hildner (1938), the war of 1739 might have been averted if the issues addressed by the commission established in 1732 to settle disputes over the Asiento had been resolved.</ref>

=== Slave trade under the Asiento ===
{{main|Asiento de Negros}}
[[File:1713 Asiento contract.png|thumb|Cover of the English translation of the Asiento contract signed by Britain and Spain in 1713 as part of the Utrecht treaty that ended the War of Spanish Succession. The contract granted exclusive rights to Britain to sell slaves in the Spanish Indies.]]
Under the [[Treaty of Tordesillas]], Spain was the only European power that could not establish factories in Africa to purchase slaves. The slaves for Spanish America were provided by companies that were granted exclusive rights to their trade. This monopoly contract was called the slave Asiento. Between 1701 and 1713 the Asiento contract was granted to France. In 1711 Britain had created the South Sea Company to reduce debt and to trade with Spanish America, but that commerce was illegal without a permit from Spain, and the only existing permit was the Asiento for the slave trade, so at the [[Treaty of Utrecht]] in 1713 Britain obtained the transfer of the Asiento contract from French to British hands for the next 30 years.

The board of directors was reluctant to take on the slave trade, which was not an object of the company and had shown little profitability when carried out by chartered companies, but they finally agreed on 26 March 1714. The Asiento set a sale quota of 4,800 units of slaves per year. An adult male slave counted as one unit; females and children counted as fractions of a unit. Initially the slaves were provided by the [[Royal African Company]].

The South Sea Company established slave reception factories at [[Cartagena, Colombia]], [[Veracruz, Veracruz|Veracruz]], Mexico, Panama, [[Portobelo, Colón|Portobello]], [[La Guaira]], [[Buenos Aires]], [[La Havana]] and [[Santiago de Cuba]], and slave deposits at [[Jamaica]] and [[Barbados]]. Despite problems with speculation, the South Sea Company was relatively successful at [[Atlantic slave trade|slave trading]] and meeting its quota (it was unusual for other, similarly chartered companies to fulfill their quotas). According to records compiled by David Eltis and others, during the course of 96 voyages in 25 years, the South Sea Company purchased 34,000 slaves, of whom 30,000 survived the voyage across the Atlantic.<ref>{{cite web |url=http://www.historycooperative.org/cgi-bin/justtop.cgi?act=justtop&url=http://www.historycooperative.org/journals/wm/58.1/eltis.html |title=History Cooperative – A Short History of Nearly Everything! |website=History Cooperative |url-status=dead |archive-url=https://archive.today/20091020132439/http://www.historycooperative.org/cgi-bin/justtop.cgi?act=justtop&url=http://www.historycooperative.org/journals/wm/58.1/eltis.html |archive-date=2009-10-20}}</ref> (Thus about 11% of the slaves died on the voyage: a relatively low mortality rate for the [[Middle Passage]].<ref>{{cite web |url=http://www.ehs.org.uk/ehs/conference2004/assets/paul.doc |title=The South Sea Company's slaving activities |first=Helen |last=Paul |url-status=dead |archive-url=https://archive.today/20121209151433/http://www.ehs.org.uk/ehs/conference2004/assets/paul.doc |archive-date=2012-12-09}}</ref>) The company persisted with the slave trade through two wars with Spain and the calamitous 1720 commercial [[Economic bubble|bubble]]. The company's slave trading peaked during 1725, five years after the bubble burst.<ref>Paul, H. J. (2010). ''The South Sea Bubble''.</ref>

=== The annual ship ===
The slave Asiento contract of 1713 granted a permit to send one vessel of 500 tons per year, loaded with duty-free merchandise to be sold at the fairs of [[New Spain]], [[Cartagena, Colombia|Cartagena]] and [[Portobelo, Colón|Portobello]]. This was an unprecedented concession that broke two centuries of strict exclusion of foreign merchants from the Spanish Empire, although a quarter of the profit was to be paid to the Spanish Crown.<ref>Walker, G. J. (1979), p. 101</ref>

The first ship to head for the Americas, the ''Royal Prince'', was scheduled for 1714 but was delayed until August 1716. In consideration of the three annual ships missed since the date of the Asiento, the permitted tonnage of the next ten ships was raised to 650.<ref>Archivo General de Indias, Seville, Spain IG2785</ref> Only seven annual ships sailed during the Asiento, the last one being the ''Royal Caroline'' in 1732. The company's failure to produce accounts for all the annual ships but the first one, and lack of payment of the proceeds to the Spanish Crown from the profits for all the annual ships, resulted in no permits being granted after the ''Royal Caroline'' trip of 1732–1734.

In contrast to the "legitimate" trade in slaves, the regular trade of the annual ships generated healthy returns, in some case profits were over 100%.<ref>McLachlan, (1940), pp. 130–131</ref> Accounts for the voyage of the ''Royal Prince'' were not presented until 1733, following continuous demands by Spanish officials. They reported profits of £43,607.<ref>Archivo General de Indias, Seville, Spain C266L3</ref> Since the King of Spain was entitled to 25% of the profits, after deducting interest on a loan he claimed £8,678. The South Sea Company never paid the amount due for the first annual ship to the Spanish Crown, nor did it pay any amount for any of the other six trips.<ref>{{cite journal |last=Hildner |first=Ernest G. |title=The Role of the South Sea Company in the Diplomacy Leading to the War of Jenkins' Ear, 1729–1739 |journal=The Hispanic American Historical Review |volume=18 |issue=3 |pages=322–341 |date=August 1938 |jstor=2507151 |doi=10.2307/2507151}}</ref>{{rp|341}}

=== Arctic whaling ===
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{{main|Whaling in the United Kingdom#The northern whale fishery}}

The [[Greenland Company]] had been established by an act of Parliament, the [[Greenland Trade Act 1692]] ([[4 Will. & Mar.]] c. 17) in 1693 with the object of catching whales in the Arctic. The products of their "whale-fishery" were to be free of customs and other duties. Partly due to maritime disruption caused by wars with France, the Greenland Company failed financially within a few years. In 1722 Henry Elking published a proposal, directed at the governors of the South Sea Company, that they should resume the "Greenland Trade" and send ships to catch whales in the Arctic. He made very detailed suggestions about how the ships should be crewed and equipped.<ref>Elking, Henry [1722](1980). ''A view of the Greenland Trade and whale-fishery''. Reprinted: Whitby: Caedmon. {{ISBN|0-905355-13-X}}</ref>

The British Parliament confirmed that a British Arctic "whale-fishery" would continue to benefit from freedom from customs duties, and in 1724 the South Sea Company decided to commence whaling. They had 12 whale-ships built on the River Thames and these went to the Greenland seas in 1725. Further ships were built in later years, but the venture was not successful. There were hardly any experienced whalemen remaining in Britain, and the company had to engage Dutch and Danish whalemen for the key posts aboard their ships: for instance all commanding officers and harpooners were hired from the [[North Frisia]]n island of [[Föhr]].<ref>{{cite book |first=Uwe |last=Zacchi |language=de |title=Menschen von Föhr. Lebenswege aus drei Jahrhunderten |publisher=Boyens & Co. |location=Heide |year=1986 |isbn=978-3-8042-0359-4 |page=13}}</ref> Other costs were badly controlled and the catches remained disappointingly few, even though the company was sending up to 25 ships to [[Davis Strait]] and the [[Greenland]] seas in some years. By 1732 the company had accumulated a net loss of £177,782 from their eight years of Arctic whaling.<ref>Anderson, Adam [1801](1967). ''The Origin of Commerce''. Reprinted: New York: Kelley.</ref>

The South Sea Company directors appealed to the British government for further support. Parliament had passed an act of Parliament{{which|date=April 2025}} in 1732 that extended the duty-free concessions for a further nine years. In 1733 the [[Whale Fishery Act 1732]] ([[6 Geo. 2]]. c. 33) was passed that also granted a government subsidy to British Arctic whalers, the first in a long series of such acts of Parliament that continued and modified the whaling subsidies throughout the 18th century. This, and the subsequent acts, required the whalers to meet conditions regarding the crewing and equipping of the whale-ships that closely resembled the conditions suggested by Elking in 1722.<ref>Evans, Martin H. (2005). Statutory requirements regarding surgeons on British whale-ships. ''The Mariner's Mirror'' '''91''' (1) 7–12.</ref> In spite of the extended duty-free concessions, and the prospect of real subsidies as well, the court and directors of the South Sea Company decided that they could not expect to make profits from Arctic whaling. They sent out no more whale-ships after the loss-making 1732 season.