The speculative bubble that burst in Britain during the 1720 stock market crash was the South Sea Bubble.
The South Sea Company received a government-backed plan to convert government debt into company shares and was granted trading privileges connected with Spanish South America. Its shares rose dramatically as investors anticipated enormous profits, even though the company’s realistic commercial prospects were far smaller than public enthusiasm suggested.
By late summer 1720, confidence weakened and the share price collapsed. The failure ruined many investors and triggered investigations into bribery and parliamentary corruption. The episode became one of the best-known early examples of a stock-market bubble.
The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, which also collapsed in 1720. They were separate schemes, however. Tulip Mania happened earlier in the Dutch Republic and involved bulbs rather than shares in the South Sea Company.