The 1720 financial crisis in France caused by the collapse of John Law’s company is known as the Mississippi Bubble.
John Law promoted the Mississippi Company, which held a monopoly over trade and development claims connected with French Louisiana. The company’s shares rose dramatically as investors became excited about the potential wealth of France’s American territories.
Law also controlled France’s Banque Générale and helped expand the money supply, linking the company’s shares to a wider financial experiment. When investors began demanding conversion of paper money and shares into more stable assets, confidence collapsed.
The resulting crash ruined many investors and damaged Law’s reputation. It occurred at roughly the same time as Britain’s South Sea Bubble, but the two were separate episodes. Both collapses became famous examples of early speculative financial manias.