Which 1720 French company collapsed in the Mississippi Bubble, causing a major Paris stock-market crash?

The Mississippi Company collapsed in the Mississippi Bubble, causing a major Paris stock-market crash in 1720.

The company was reorganized under Scottish financier John Law, who received control of trade privileges connected with French territories in North America. Law also became central to a paper-money system and a bank that helped expand credit. Investors bought company shares in Paris, driving prices far above levels supported by the company’s actual commercial prospects.

As confidence weakened in 1720, shareholders tried to convert paper wealth and shares into cash. The monetary system could not sustain the demand, and the company’s share price collapsed. Many investors suffered heavy losses, while Law fled France.

The episode is often compared with Britain’s South Sea Bubble, which also peaked and collapsed in 1720, but the companies and national settings were different. The Mississippi Bubble was centered on France and the Mississippi Company, not the English South Sea Company.