Which 18th-century British trading company was at the center of the South Sea Bubble?

The South Sea Company was the British trading company at the center of the South Sea Bubble.

Founded in 1711, the company received a monopoly over British trade with Spanish South America, although the practical trading opportunities were far smaller than many investors imagined. It also took on part of the British government’s debt, encouraging confidence in its shares.

Speculation drove the share price sharply upward in 1720. Investors included aristocrats, professionals, and ordinary savers, while promoters encouraged unrealistic expectations about the company’s profits. When confidence broke, the price collapsed and ruined many shareholders.

The South Sea Bubble occurred alongside France’s Mississippi Bubble, but the two were separate schemes. The episode helped inspire later debates about financial regulation, corporate promotion, insider dealing, and the dangers of buying assets solely because prices are rising.