Which 1720 French company collapsed during the speculative crash known as the Mississippi Bubble?

The Mississippi Company collapsed during the speculative crash known as the Mississippi Bubble in 1720.

The company was associated with John Law, a Scottish financier who gained control of the French company and promoted its prospects in Louisiana and France’s American territories. The company’s shares became the focus of intense speculation, and its paper money and shares were linked within an ambitious financial system.

Investors bought shares at rapidly rising prices, often driven more by expectation than by the company’s actual colonial revenues. When confidence weakened, shareholders rushed to sell. The share price collapsed in 1720, causing heavy losses and damaging public trust in paper finance.

The Mississippi Bubble occurred at roughly the same time as Britain’s South Sea Bubble, but the two were separate schemes. Both became famous examples of early financial bubbles, and both demonstrated how credit expansion, persuasive promotion, and crowd behavior could push asset prices far beyond realistic values.