Which 1720 British company became the symbol of a speculative stock bubble that collapsed?

The South Sea Company became the symbol of the British speculative stock bubble that collapsed in 1720.

The company received a government charter in 1711 and was granted rights connected with British trade in the South Atlantic. Its shares rose dramatically in 1720 as investors were attracted by optimistic claims, easy credit, and the belief that the company’s commercial prospects were enormous. Many buyers entered simply because prices were rising.

The bubble burst later in 1720, causing severe losses for shareholders. The collapse damaged confidence in financial markets and produced political scandal because influential people had promoted or benefited from the scheme. Parliament investigated the affair, and several directors were accused of corruption.

The South Sea Bubble was part of a wider European speculative episode. France’s Mississippi Company bubble also collapsed around the same period. A common mistake is assuming the South Sea Company’s main business matched the extravagant expectations attached to its shares; its actual trade prospects were far smaller than the speculation suggested.