Which 1720 financial collapse followed the bursting of speculation in the South Sea Company?

The 1720 financial collapse that followed speculation in the South Sea Company was the South Sea Bubble.

The South Sea Company was founded in England in 1711 and received a government-backed monopoly over trade with Spanish South America, although its practical trading opportunities were limited. In 1720, Parliament approved a plan allowing the company to assume part of the national debt. Confidence and promotional enthusiasm drove its share price sharply higher.

The price reached about £1,000 in August 1720 before collapsing later that year. Investors included members of the political and social elite, and the reversal caused widespread losses. The scandal damaged public trust and led to parliamentary investigations into corruption and insider dealing.

The South Sea Bubble is often discussed alongside the Mississippi Bubble in France, which also burst in 1720. It is not the same event as Tulip Mania in the Dutch Republic, an earlier episode involving tulip bulbs. The South Sea collapse became a classic example of speculative bubbles fueled by leverage, excitement, and unrealistic expectations.