During which century did the South Sea Bubble crash in Britain?
Answer
18th century
The South Sea Bubble crashed during the 18th century, in 1720.
The South Sea Company was founded in 1711 and received a government-backed role connected with Britain’s public debt and trade with Spanish America. Investors became increasingly enthusiastic about the company’s prospects, driving its share price to extraordinary levels during 1720. The company’s actual commercial opportunities were much narrower than many investors believed.
As confidence weakened, the share price collapsed later in 1720. The episode damaged investors, exposed speculative promotion, and led to parliamentary investigations. It is one of the earliest famous examples of a major financial bubble and crash, alongside the Dutch tulip speculation of the 17th century and France’s Mississippi Bubble, which also burst in 1720.
The South Sea Bubble was not a stock-market crash in the modern, broad-index sense. It centered on one powerful company and a speculative wave, but its effects reached the British political and financial establishment. Isaac Newton reportedly lost money after buying and selling South Sea Company shares.