The South Sea Company was at the center of Britain’s South Sea Bubble, whose collapse helped trigger the 1720 stock-market crash.
Founded in 1711, the South Sea Company received a government-backed monopoly over British trade with Spanish South America, though the expected commercial opportunities were limited. In 1720, the company proposed converting part of Britain’s national debt into its shares, creating enthusiasm among investors.
Its share price rose from about £100 in January 1720 to roughly £1,000 in August. The boom attracted speculation and encouraged the creation of other ventures, many of them fraudulent or unrealistic. When confidence broke, the South Sea share price collapsed, ruining investors and provoking a political scandal.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also collapsed in 1720. They were separate schemes, not two names for the same company. Parliament investigated the South Sea directors, and several officials were accused of corruption.