Which 18th-century British company became the symbol of the 1720 stock-market crash?

The South Sea Company became the symbol of the 1720 British stock-market crash.

The South Sea Company was established in 1711 and received a government-backed monopoly over British trade with Spanish South America, although its realistic trading prospects were far more limited than many investors believed. In 1720, Parliament approved a proposal allowing the company to assume part of the national debt, helping its shares attract enormous speculation.

Share prices rose dramatically as investors expected profits from trade and financial arrangements. The boom drew in people from many social classes and encouraged the creation of other speculative ventures. When confidence broke, South Sea shares collapsed, causing widespread losses and political scandal.

The episode is called the South Sea Bubble, but it was part of a broader speculative crisis. France’s Mississippi Company also experienced a major bubble in 1720. The South Sea Company did not simply represent a modern exchange crash; credit, government finance and promotional speculation were tightly connected in the episode.