Which company became the symbol of Britain’s South Sea Bubble crash in 1720?

The South Sea Company became the symbol of Britain’s South Sea Bubble crash in 1720.

The company was founded in 1711 and received a monopoly over British trade with parts of Spanish South America in exchange for managing government debt. Investors came to expect enormous profits, even though the company’s realistic trading opportunities were limited.

Its share price rose dramatically during 1720 as speculation spread through London. Parliament’s Bubble Act and growing doubts about the company’s finances helped turn enthusiasm into a rush to sell. The price collapsed, ruining many investors and causing a major political scandal.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same period. Neither episode was a modern stock-market crash in the technical sense, but both are classic examples of speculative bubbles, leverage, and crowd psychology.