Which 1720 French financial collapse was engineered around John Law’s Mississippi Company?

The 1720 French financial collapse engineered around John Law’s Mississippi Company was the Mississippi Bubble.

Scottish financier John Law established the Banque Générale in 1716 and gained control of the Mississippi Company, which held a monopoly over French trade and colonization in parts of North America. Law linked the company to government finance and issued shares that could be bought with paper money, making investment accessible to a wider public.

Speculation drove the shares to extraordinary levels in 1719 and 1720. Investors crowded into Paris to trade them, while confidence depended heavily on expectations about the company’s American wealth and the stability of Law’s monetary system. When doubts spread, holders rushed to exchange paper assets for coin and the market collapsed.

The Mississippi Bubble unfolded at roughly the same time as Britain’s South Sea Bubble. Both episodes show how monopoly privileges, public debt, promotional claims, and expanding credit could combine to create a dangerous financial boom.