Which 1720 English stock-market collapse is linked to the failure of the South Sea Company?

The 1720 English stock-market collapse linked to the South Sea Company is known as the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish America, though its actual commercial opportunities were far more limited than promotional claims suggested. Its shares rose dramatically in 1720 as investors expected enormous profits, and Parliament’s Bubble Act helped channel speculative enthusiasm toward approved companies. When confidence broke, the share price collapsed.

The bubble ruined many investors and triggered political scandal, because influential figures had promoted or benefited from the scheme. The crisis happened alongside France’s Mississippi Bubble, creating a broader European episode of speculative finance. South Sea shares did not represent a modern diversified stock index, so the event is best described as a company-centered speculative bubble and collapse rather than a contemporary market crash. It remains a classic example of how monopoly promises, easy credit, herd behavior, and political connections can amplify financial speculation.