Which company’s 1720 collapse became the central scandal of Britain’s South Sea Bubble?

The South Sea Company’s 1720 collapse became the central scandal of Britain’s South Sea Bubble.

Founded in 1711, the South Sea Company received a monopoly over British trade with parts of Spanish America in exchange for taking on government debt. Its shares later soared as investors expected enormous commercial profits, even though the company’s actual trading prospects were far more limited.

The share price collapsed in late 1720 after speculative enthusiasm gave way to selling. Many investors lost fortunes, and the scandal damaged public confidence in company promoters, directors, and politicians. Parliament investigated the affair, revealing corruption and financial misconduct.

The South Sea Bubble unfolded at the same time as John Law’s Mississippi Company bubble in France. Those episodes are related, but they were separate companies and national crises.