Which 1720 English speculative collapse involved the South Sea Company?

The South Sea Bubble was the 1720 English speculative collapse involving the South Sea Company.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish South America, although its actual trading opportunities were limited. It also assumed portions of the British national debt. Investors bought shares after promoters suggested that the company’s commercial prospects were enormous. The share price rose dramatically during 1720, attracting more speculation and encouraging the creation of other joint-stock ventures.

Confidence collapsed later that year. The South Sea Company’s shares fell heavily, ruining many investors and creating a political scandal. Parliament investigated the company’s directors and the officials who had promoted or benefited from the scheme. The Bubble Act of 1720 attempted to restrict unauthorized joint-stock companies.

The South Sea Bubble occurred alongside the French Mississippi Bubble, but they were separate schemes. Both were connected by international speculation and John Law’s financial experiment, yet the South Sea Company was British and the Mississippi Company was French. That distinction matters when identifying the correct episode.