Which company’s share collapse helped trigger the 1720 Mississippi Bubble in France?

The Mississippi Company’s share collapse helped trigger the 1720 Mississippi Bubble in France.

The company was reorganized under the influence of Scottish financier John Law, who promoted a plan combining colonial trade, public debt, and a new paper-money system. Shares rose dramatically as investors expected wealth from the French colony of Louisiana and from the company’s growing financial privileges.

The boom became detached from the company’s realistic commercial prospects. As confidence weakened, shareholders rushed to convert paper assets and shares into more stable forms of wealth. The resulting collapse damaged investors and undermined confidence in Law’s broader financial system, leading him to leave France.

The Mississippi Bubble is often paired with Britain’s South Sea Bubble because both burst in 1720. They were separate episodes, although both involved government debt, privileged companies, aggressive promotion, and speculation. The company also changed names during its history, which is why historical accounts may use related corporate titles.