During the 1720 South Sea Bubble, which company gave the crisis its name?
Answer
South Sea Company
Answer
South Sea Company
The South Sea Company gave its name to the South Sea Bubble of 1720.
Founded in 1711, the South Sea Company received a British government monopoly over trade with Spanish South America in exchange for assuming government debt. In practice, its commercial prospects were far more limited than promotional claims suggested. A plan to convert government debt into company shares helped drive intense speculation.
The share price rose dramatically in 1720 before collapsing later that year. Investors included members of the British political and social elite, and the scandal damaged public confidence in financial promotion and government oversight. Parliament investigated the episode, and some directors faced severe consequences.
The South Sea Bubble is often discussed alongside France's Mississippi Bubble, which also burst in 1720. They were separate companies and schemes, though both involved speculation, state finance, and unrealistic expectations about overseas wealth. The South Sea Company was not the East India Company, another major British trading corporation of the period.
Source: Wikipedia · fact-checked Oct. 2026