The Mississippi Bubble was the 1720 collapse of the French speculative scheme built around John Law’s Mississippi Company.
John Law, a Scottish financier, gained control of the company and promoted its supposed trade and development opportunities in French Louisiana. The company also absorbed French government debt, while Law’s Banque Générale issued banknotes and supported a rapidly expanding share market.
Shares rose dramatically in Paris, attracting investors from across society. Confidence then failed, holders rushed to convert paper wealth into money, and the system suffered a severe collapse. Law fled France in December 1720, and the episode damaged faith in paper money and financial innovation.
The Mississippi Bubble happened alongside the South Sea Bubble in Britain, but the institutions and governments were different. Both collapses showed how debt conversion, easy credit, monopoly claims, and crowd psychology could reinforce speculative prices.