Which company name became associated with the 1720 British stock-market bubble and crash?
Answer
South Sea Company
Answer
South Sea Company
The South Sea Company became associated with Britain's 1720 stock-market bubble and crash.
Founded in 1711, the company received a government-backed monopoly over British trade with Spanish South America, although its realistic trading opportunities were much more limited than promotional claims suggested. In 1720, Parliament approved a plan for the company to assume part of Britain's government debt. Speculation drove its share price to extraordinary levels before confidence collapsed.
The South Sea Bubble was part of a wider speculative episode. Shares in the Mississippi Company rose and fell in France, and many smaller British ventures attracted money through exaggerated promises. Parliament passed the Bubble Act in 1720, restricting companies formed without a royal charter or parliamentary authorization.
The crash ruined many investors and damaged public trust in financial promotion. Isaac Newton is famously reported to have said that he could calculate the motions of heavenly bodies but not the madness of people. The quote is widely repeated, though its exact wording is uncertain.
Source: Wikipedia · fact-checked Sept. 2026