Which 18th-century company’s collapse became the best-known British stock-market crash of 1720?

The South Sea Company’s collapse became the best-known British stock-market crash of 1720.

The South Sea Company was granted a monopoly over British trade with Spanish South America and proposed converting government debt into company shares. Its shares rose dramatically in 1720 as investors were attracted by promotional claims and speculative enthusiasm. The expected trading profits did not match the market’s extravagant hopes.

When confidence broke, the shares collapsed, ruining many investors and prompting a major political scandal. Parliament investigated corruption involving officials and company promoters. The episode is known as the South Sea Bubble, one of the earliest famous speculative bubbles in financial history. France experienced a related contemporary episode involving John Law’s Mississippi Company, but that was a separate bubble. The phrase “South Sea Bubble” therefore refers specifically to the British company and its 1720 share-price collapse.