What was the name of the 1720 British stock-market bubble involving the South Sea Company?
Answer
South Sea Bubble
Answer
South Sea Bubble
The 1720 British stock-market bubble involving the South Sea Company was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its practical trading opportunities were limited. Its shares rose dramatically in 1720 as promoters encouraged expectations of enormous profits and investors rushed to participate.
The company also proposed converting government debt into its shares, linking speculation to public finance. As confidence weakened, the share price collapsed. Many investors lost fortunes, and the scandal damaged trust in company promotion and political oversight.
The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France, making 1720 a landmark year in the history of speculative manias. It is not the same event as Tulip Mania in the Dutch Republic, which occurred much earlier in the seventeenth century.
Source: Wikipedia · fact-checked Sept. 2026