Which 1720 French speculative bubble collapsed around the same time as Britain’s South Sea Bubble?

The Mississippi Bubble was the French speculative bubble that collapsed around the same time as Britain’s South Sea Bubble.

The Mississippi Company was promoted by Scottish financier John Law, who also controlled France’s Banque Générale and later the Banque Royale. The company held a monopoly over French trade and colonization connected with the Mississippi and Louisiana territories. Law’s financial system linked company shares, bank money, and government debt.

Share prices rose dramatically in 1719 and 1720 as investors were attracted by promises of wealth from Louisiana. The territory’s actual economic potential could not justify the speculation. When confidence failed, investors rushed to exchange shares and bank notes for more dependable assets, causing a collapse.

The Mississippi Bubble and South Sea Bubble were separate national episodes, though they occurred in the same broad period and are often studied together. The French crisis damaged confidence in Law’s system, while the South Sea scandal led to investigations and political controversy in Britain.