What was the name of the 1720 English market collapse linked to the South Sea Company?
Answer
South Sea Bubble
Answer
South Sea Bubble
The 1720 English market collapse linked to the South Sea Company was called the South Sea Bubble.
The South Sea Company received a government-backed monopoly connected with trade in the South Seas and took over large amounts of British government debt. Its shares rose dramatically as investors expected enormous profits, even though the company’s actual trading prospects were far more limited than popular enthusiasm suggested.
When confidence broke in 1720, the share price collapsed, ruining many investors and causing a political scandal. Parliament investigated the company’s conduct, and several directors faced severe consequences.
The South Sea Bubble is often grouped with the Mississippi Bubble in France, which also burst in 1720. They were separate schemes, although both illustrate how speculation, promotional claims, and easy credit can inflate asset prices beyond underlying business value.
Source: Wikipedia · fact-checked Oct. 2026