Which company’s South Sea scheme gave its name to Britain’s 1720 speculative bubble?

The South Sea Company gave its name to Britain’s 1720 South Sea Bubble.

Founded in 1711, the company received a government-backed monopoly over British trade with Spanish South America, although its actual commercial opportunities were far more limited than investors expected. It also took over part of Britain’s national debt in exchange for shares and other financial privileges.

Promotional claims and rising share prices attracted investors. The stock climbed dramatically during 1720, while many other speculative ventures appeared. Parliament eventually passed the Bubble Act in June 1720, restricting companies formed without a royal charter or parliamentary authority.

Confidence collapsed later that year. The South Sea Company’s share price fell from a peak near £1,000 to roughly £124 by December. Thousands of investors suffered losses, and the scandal damaged public trust in promoters and politicians. The South Sea episode occurred alongside France’s Mississippi Bubble, but the two schemes were separate companies and markets.