Which company’s shares were at the heart of Britain’s famous South Sea Bubble crash?

The South Sea Company’s shares were at the heart of Britain’s famous South Sea Bubble crash.

Founded in 1711, the South Sea Company received a British government monopoly over trade with Spanish South America, although the commercial opportunities were far more limited than investors imagined. The company also took on government debt, and its directors promoted expectations of enormous profits.

Its share price rose rapidly in 1720 amid speculation, easy credit, and imitation by other ventures. Parliament passed the Bubble Act that year, restricting unauthorized joint-stock companies, but the measure did not prevent the South Sea Company’s own collapse. By late 1720, confidence had broken and many investors suffered severe losses.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, which involved John Law’s Mississippi Company. They were separate schemes, though both reflected early eighteenth-century speculation and over-optimistic claims about overseas trade. The South Sea Company’s crash helped produce political scandal in Britain and prompted investigations into corruption among company directors and public officials.