Which 1720 speculative bubble involved the South Sea Company’s shares?

The South Sea Bubble was the 1720 speculative bubble involving South Sea Company shares.

The South Sea Company was a British trading and financial corporation that received a government-backed arrangement involving parts of Britain’s national debt. Promotional claims about its commercial prospects encouraged investors to buy shares, even though the company’s actual trade with Spanish America was far smaller than many imagined.

Share prices rose dramatically during 1720, attracting wealthy investors and imitators. When confidence broke, prices collapsed, ruining many holders and causing a broad political scandal. Parliament investigated the company’s directors and allegations of corruption.

The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France, which is why the two are often discussed together. They were separate schemes. Tulip Mania was an earlier Dutch speculative episode involving bulbs rather than company shares, while Railway Mania occurred in Britain more than a century later.