The 1720 British financial bubble whose collapse helped define the crash was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America in 1711. In 1720, it took over substantial British government debt, and its shares rose dramatically as promoters encouraged expectations of enormous commercial profits. The company’s actual trading prospects were far more limited than the speculation suggested.
By late 1720, the share price had collapsed. Investors lost large sums, and the scandal damaged public confidence in company promotion and financial speculation. Parliament investigated the affair, and some directors and officials were accused of corruption or improper conduct.
The South Sea Bubble occurred during the same broader European speculative era as France’s Mississippi Bubble, but the two were separate schemes. They are often mentioned together because both expanded rapidly in 1720 and then collapsed, causing financial and political upheaval.