Which 1720 French investment scheme collapsed in the Mississippi Bubble?

The Mississippi Company collapsed in the 1720 Mississippi Bubble.

The company, originally associated with Scottish financier John Law, received a monopoly over French trade and settlement in the Mississippi region. Law also helped create a bank and promoted company shares as part of a broader plan to manage France’s public debt and expand the money supply.

Speculation drove the share price to extraordinary levels in Paris during 1719 and 1720. Investors bought shares partly with newly issued paper money, but confidence failed when doubts grew about the company’s profits and the value of its currency. The share price then collapsed, ruining many investors.

The Mississippi Bubble is often paired with Britain’s South Sea Bubble, which also burst in 1720. They were separate companies and schemes, although both showed how monopolies, easy credit, and persuasive growth stories could produce financial manias.