The 1720 English speculation involving a company granted rights to trade in the South Seas was the South Sea Bubble.
The South Sea Company was created in 1711 to manage part of Britain’s government debt and received a monopoly over British trade with Spanish South America. In practice, the expected trading opportunities were limited, but the company’s shares rose dramatically during 1720 as investors anticipated enormous profits.
Parliament’s Bubble Act and aggressive promotion helped intensify the boom. Shares climbed to roughly £1,000 before collapsing later in the year. The crash ruined many investors and triggered political scandal, because influential figures had promoted or benefited from the scheme.
The South Sea Bubble was not the only major speculative episode of 1720. France experienced the Mississippi Bubble, associated with John Law’s financial system. The two collapses occurred in the same year but involved different companies and countries.