What 1720 speculative collapse in Britain is known as the South Sea Bubble?

The 1720 speculative collapse in Britain is known as the South Sea Bubble.

The South Sea Company received a government-sponsored monopoly over British trade with Spanish South America in 1711. In 1720, Parliament allowed the company to assume a large share of Britain’s national debt, encouraging investors to buy its shares. Promotional claims about enormous trading opportunities helped drive prices sharply upward.

South Sea shares rose from about £100 in early 1720 to nearly £1,000 by August. Confidence then broke, and the price collapsed before the end of the year. Many investors, including prominent figures, suffered heavy losses, while the scandal damaged public trust in financial promoters and Parliament.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, another 1720 collapse linked to John Law. It was not a modern exchange crash in the narrow sense, but a major early example of a speculative stock-market bubble and its aftermath.