Which 1720 British market collapse involved the South Sea Company?

The 1720 British market collapse involving the South Sea Company was the South Sea Bubble.

The South Sea Company received a government-backed trading monopoly and later proposed taking over part of Britain’s national debt. Its shares rose dramatically in 1720 as investors expected enormous profits from trade with Spanish America, although the company’s actual commercial prospects were far smaller than the speculation suggested.

The price peaked in August 1720 and then collapsed. Investors across social classes lost money, and the scandal damaged public trust in company promotion and political influence. Parliament investigated the affair, and some directors and officials faced severe consequences.

The South Sea Bubble occurred during the same year as France’s Mississippi Bubble, but the two were separate schemes. “Bubble” became a lasting term for speculative excitement followed by a sharp collapse.