The speculative boom that collapsed in London in 1720 around the South Sea Company was the South Sea Bubble.
The South Sea Company received a government monopoly over British trade with parts of South America, although its actual trading prospects were far smaller than many investors imagined. The company promoted its shares aggressively and arranged to convert government debt into stock. Prices rose dramatically as aristocrats, merchants, and ordinary savers joined the speculation.
The bubble burst late in 1720, causing severe losses and a political scandal in Britain. Parliament investigated corruption, and the company’s directors were punished or forced to surrender property. The South Sea Bubble is often discussed alongside John Law’s Mississippi Bubble in France, which collapsed during the same general era. Neither episode was the Dutch tulip mania, which involved bulb contracts in the 1630s.