Which 1720 British company’s collapse helped define the South Sea Bubble?

The South Sea Company’s collapse helped define the South Sea Bubble of 1720. The company received a British government monopoly over trade with Spanish South America, and its shares rose rapidly as investors believed its commercial prospects were extraordinary. In practice, the expected trade opportunities were far more limited than the speculation suggested.

The company’s share price surged during 1720, drawing in aristocrats, merchants, and ordinary investors. Easy credit and imitation schemes amplified the frenzy. When confidence broke, the price collapsed, causing ruin for many shareholders and exposing corruption and political favoritism. Parliament investigated the scandal, and several prominent figures faced severe reputational or financial consequences.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720. They were separate companies and schemes. The South Sea Company is the specific British company associated with the English crisis.