The South Sea Company bubble peaked and collapsed in 1720.
The South Sea Company was founded in 1711 and received a government-backed monopoly over trade with Spanish South America, although its actual trading opportunities were limited. Investors became enthusiastic after the company proposed converting government debt into shares and promoted expectations of enormous profits.
Its share price rose dramatically during 1720, helped by easy credit, speculation, and the popularity of new joint-stock ventures. When confidence broke, the price plunged, ruining many investors and causing a political scandal in Britain. Parliament investigated the company’s directors and associated corruption.
The South Sea Bubble was part of a wider speculative episode that also included the Mississippi Bubble in France. It is often confused with the Tulip Mania of the seventeenth century, but Tulip Mania involved bulbs rather than a publicly traded company’s shares.