In 1720 Britain embarked on a project to convert a large part of the public debt into shares in the South Sea Company. Most narratives assume the Company stood to profit from an anticipated increase in the market price of its shares. Though some have noted that this assumption is incorrect, no one has yet tried to find an alternative explanation for the Company's motivation for entering into the project. In this article I argue that the Company had no need to profit directly from the conversion operation and instead saw it as an opportunity to establish dominance in the British banking industry.
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