Which 1720 speculative bubble collapsed around the South Sea Company in Britain?

The South Sea Bubble was the 1720 speculative bubble that collapsed around Britain’s South Sea Company.

The South Sea Company received a government charter and took over part of Britain’s public debt. Promotional claims about profitable trade with Spanish America encouraged investors to buy shares, while the company’s rising price attracted further speculation. Parliament passed the Bubble Act in 1720 amid the boom, but confidence soon broke down.

South Sea shares reached a peak in 1720 before collapsing later that year. Many investors suffered severe losses, including prominent public figures. The episode damaged trust in company promoters and exposed weaknesses in financial oversight, though it did not create a modern stock exchange crash in the same sense as 1929 or 1987.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720. They were separate schemes. Tulip mania occurred in the Netherlands in the 1630s and involved bulbs rather than the South Sea Company’s shares.