Which company’s collapse helped trigger Britain’s South Sea Bubble crash in 1720?

The South Sea Company’s collapse helped trigger Britain’s South Sea Bubble crash in 1720.

The company received a government charter to trade with Spanish South America, but its shares became primarily a vehicle for speculation rather than profitable commerce. In 1720, Parliament approved a plan allowing the company to convert part of the national debt into shares. Investors rushed in, and the price climbed dramatically before confidence failed.

The collapse was part of a wider European speculative episode. France’s Mississippi Company also suffered a major breakdown that year, but it was a separate company and scheme. The South Sea Bubble did not resemble a modern exchange crash in every detail: trading practices, credit arrangements, and disclosure standards were very different. Nevertheless, the episode became one of history’s best-known examples of a stock-market bubble followed by a sudden collapse.