Which 18th-century company was at the center of Britain’s South Sea Bubble crash?

The South Sea Company was at the center of Britain’s South Sea Bubble crash in 1720.

Founded in 1711, the company received a government-backed monopoly over trade with parts of Spanish South America in exchange for taking on government debt. In practice, its commercial opportunities were far smaller than many investors imagined, but promotional claims and financial engineering drove its share price sharply higher.

The bubble collapsed in late 1720 as confidence weakened and investors sold. The company’s failure ruined many shareholders and damaged public trust in speculative ventures. Parliament investigated the episode, and prominent figures faced accusations of corruption.

The Mississippi Company was involved in a similar speculative bubble in France at roughly the same time, which explains a common mix-up. The South Sea Bubble refers specifically to the British episode centered on the South Sea Company.