What was the name of the French company at the center of the Mississippi Bubble, which collapsed in 1720?

The Mississippi Company was at the center of France’s Mississippi Bubble, which collapsed in 1720.

The company was linked to John Law, a Scottish financier who gained influence in France after the death of Louis XIV. Law promoted paper money and a company holding privileges connected with trade and colonial development in French Louisiana. Investors bought shares partly because the company’s prospects were presented in highly optimistic terms.

Share prices rose dramatically in 1719 and early 1720. The boom attracted wealthy investors and ordinary savers, but the company’s commercial results could not justify the market valuation. When confidence and convertibility weakened, shareholders rushed to sell, and the price collapsed. The resulting crisis damaged confidence in Law’s financial system.

The Mississippi Bubble is often paired with Britain’s South Sea Bubble because both collapsed in 1720. They were separate companies and schemes, however. Law’s system also involved the Banque Générale, later transformed into the Banque Royale, making the episode a monetary crisis as well as a speculative stock bubble.