Which 1720 speculative bubble collapsed after Parliament passed the Bubble Act in Britain?

The South Sea Bubble collapsed in 1720 after speculation drove the South Sea Company’s shares to extraordinary heights in Britain.

The South Sea Company was created in 1711 to manage part of Britain’s government debt. It received trading privileges connected with Spanish America, but those commercial opportunities were far more limited than many investors imagined. Promotion, easy credit, and expectations of government support pushed the shares upward.

The Bubble Act, passed in June 1720, restricted companies operating without a royal charter. It did not prevent the South Sea Company’s eventual collapse and was itself part of the political and financial controversy. By late 1720, the share price had fallen dramatically, ruining many investors.

The South Sea Bubble was linked to the Mississippi Bubble in France, associated with John Law’s financial system. Isaac Newton, who had served as Master of the Mint, lost money after re-entering the South Sea investment. The episode helped establish “bubble” as a lasting term for speculative booms followed by crashes.