What company’s share-price collapse became the defining symbol of Britain’s South Sea Bubble crash?

The South Sea Company’s share-price collapse became the defining symbol of Britain’s South Sea Bubble crash.

Founded in 1711, the company received a monopoly over British trade with parts of Spanish-controlled South America in exchange for taking on government debt. In practice, its commercial opportunities were far more limited than many investors imagined. Promotional claims and rising prices nevertheless attracted aristocrats, merchants, and ordinary savers.

South Sea shares rose spectacularly in 1720 before collapsing later that year. The company’s failure ruined investors and exposed fraudulent promotion and weak regulation. Parliament investigated, and several directors were accused of corruption. The scandal also damaged confidence in other speculative ventures.

The South Sea Bubble occurred alongside France’s Mississippi Bubble, associated with John Law. These episodes are often grouped together, but they were separate schemes in different countries. The South Sea Company did not cause the Mississippi Bubble, even though both collapses reflected the era’s enthusiasm for paper wealth and expanding credit.