What was the name of Britain’s famous 1720 speculative stock-market collapse?

Britain’s famous 1720 speculative stock-market collapse was the South Sea Bubble.

The South Sea Company received a government monopoly over trade with Spanish South America in 1711, but its realistic trading prospects were far smaller than promotional claims suggested. In 1720, investors were allowed to exchange government debt for company shares, and enthusiasm drove the share price sharply upward.

The boom attracted aristocrats, merchants, and ordinary savers. Many other speculative ventures appeared, leading Parliament to pass the Bubble Act in 1720. When confidence weakened later that year, South Sea shares plunged, ruining many investors and causing a major political scandal.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, which collapsed during the same period. They were separate schemes, however: the South Sea episode centered on a British company and British government debt. The crash helped establish the lasting expression “bubble” for an asset price driven far beyond underlying value.