Which 1720 company’s collapse formed part of Britain’s South Sea Bubble stock-market crash?

The South Sea Company’s collapse formed the central part of Britain’s South Sea Bubble stock-market crash in 1720.

Founded in 1711, the South Sea Company received a government-backed monopoly over trade with parts of Spanish America in exchange for taking on government debt. Investors later pushed its share price dramatically higher, even though the company’s expected trading opportunities were far more limited than promotional claims suggested.

The bubble burst in late 1720. Share prices fell rapidly, ruining many investors and causing a political scandal in Britain. Parliament investigated the company’s directors and other officials, while public anger focused on speculation, insider dealing, and the use of government connections.

The South Sea Bubble occurred alongside the Mississippi Bubble in France, associated with John Law’s financial system and the Mississippi Company. These were separate schemes, although their collapses happened in the same broad period and helped create a Europe-wide crisis of confidence in speculative finance.