Which 1720 British speculative bubble burst after the collapse of its namesake company?

The South Sea Bubble burst in 1720 after the collapse of the South Sea Company’s share price.

The company received a government-backed monopoly over trade with Spanish South America, although its realistic trading prospects were far smaller than many investors believed. In exchange for taking over portions of Britain’s government debt, the company issued shares and promoted expectations of enormous future profits.

Its stock price rose dramatically during 1720 as investors speculated and new joint-stock ventures appeared. The Bubble Act, passed that year, attempted to restrict unauthorized companies, but it did not stop the speculative boom. When confidence broke, shares fell sharply and many investors faced ruin.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also collapsed in 1720 under John Law’s financial system. The events encouraged parliamentary investigations and exposed corruption involving company promoters and public officials. The episode is not a modern stock-market crash in the same institutional setting, but it is one of history’s best-known early financial bubbles.