Which 1720 British company collapsed after becoming the center of the South Sea Bubble?

The South Sea Company collapsed after becoming the center of Britain’s 1720 South Sea Bubble.

Founded in 1711, the company received a government-backed monopoly over trade with Spanish South America, although the expected commercial opportunities were far more limited than promotional claims suggested. In 1720, Parliament approved a plan allowing the company to assume part of Britain’s national debt, and its shares surged as investors imagined enormous profits.

The boom attracted the public and encouraged the creation of other speculative ventures. When confidence weakened, South Sea Company shares plunged. The collapse ruined many investors and exposed corruption involving politicians, company promoters and influential shareholders.

The episode was part of a wider European speculative crisis. France’s Mississippi Company bubble also burst around the same period, but it was a separate enterprise. The South Sea Bubble became a lasting warning about government privileges, misleading promotion and buying assets solely because prices are rising.