What was the name of the 1720 English financial bubble that ended in a major stock-market crash?

The South Sea Bubble was the 1720 English financial bubble that ended in a major stock-market crash. It centered on the South Sea Company, which received a government-backed trading monopoly connected with Spanish South America.

The company’s shares rose dramatically as investors were encouraged to believe that its commercial opportunities were enormous. In practice, the company’s actual trade was far more limited than the speculation suggested. The share price became detached from realistic expectations of profits.

When confidence weakened in late 1720, investors rushed to sell. The collapse ruined many shareholders and caused political scandal because members of Parliament and government officials had been involved in the promotion or ownership of South Sea stock.

The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France, but they were separate schemes. “Tulip Mania” was an earlier Dutch episode involving tulip bulbs, not an English eighteenth-century stock-company collapse.