Which 1720 British bubble burst in a famous early stock-market crash?

The South Sea Bubble burst in 1720 in a famous early British stock-market crash.

The South Sea Company received a government-backed monopoly over trade with Spanish South America and became the focus of intense speculation. Its shares rose dramatically as investors imagined enormous commercial profits, even though the company’s real trading prospects were far more limited than the excitement suggested.

Parliament passed legislation that helped the company assume part of Britain’s public debt, increasing its financial and political importance. As the share price climbed, many investors joined the rush. When confidence failed, selling spread rapidly and the price collapsed.

The episode damaged investors, including members of the political and scientific establishment, and prompted investigations into corruption. It is often discussed alongside the Mississippi Bubble in France, which also collapsed in 1720, but they were separate schemes in different countries. “South Sea Bubble” is the specific name required for the British event.