Which 18th-century French scheme collapsed in the Mississippi Bubble of 1720?

The Mississippi Company was the French scheme that collapsed in the Mississippi Bubble of 1720.

The company was reorganized under the direction of Scottish financier John Law and received trading privileges connected with France’s North American territories, especially the Mississippi basin. Law also linked the company to a broader financial system involving a bank and paper money. Public enthusiasm drove its shares to extraordinary levels in 1719 and 1720.

Investors bought shares partly because they expected continuing price increases, while stories about North American wealth amplified speculation. When confidence in the company and its paper currency weakened, holders rushed to sell. The share price collapsed, and Law fled France after the system unraveled.

The Mississippi Bubble and Britain’s South Sea Bubble were separate events, though both peaked and burst in 1720. The episode helped create lasting skepticism about paper money and government-backed speculative finance in France.