Which 1720 bubble burst when shares of the South Sea Company collapsed in Britain?

The 1720 bubble that burst when South Sea Company shares collapsed in Britain was the South Sea Bubble.

The South Sea Company received a government-backed role in managing part of Britain’s public debt and promoted expectations of enormous trading profits. Its shares rose dramatically during 1720 as investors bought into the company and other speculative ventures.

The boom attracted people from many social classes and encouraged the creation of dubious joint-stock schemes. When confidence weakened, selling accelerated. South Sea shares fell heavily, ruining investors and causing a political scandal involving company directors and public officials.

The South Sea Bubble occurred in the same year as the Mississippi Bubble in France, but the two were separate schemes. Both reflected early modern enthusiasm for joint-stock finance, government-linked companies and overseas trade. Britain later passed the Bubble Act, which restricted certain unchartered companies, although financial regulation remained limited by modern standards.