Which company’s speculative collapse formed the center of England’s South Sea Bubble in 1720?

The South Sea Company’s speculative collapse formed the center of England’s South Sea Bubble in 1720.

Founded in 1711, the company received a government-backed monopoly over trade with Spanish South America, although its practical trading opportunities were far more limited than many investors believed. In 1720, a plan to convert government debt into company shares helped drive extraordinary speculation. Share prices rose rapidly as investors expected immense future profits.

The boom attracted famous investors and imitators, while Parliament approved the Bubble Act to restrict unauthorized joint-stock companies. As confidence weakened, South Sea shares collapsed. Many investors lost fortunes, and the scandal damaged public trust in financial promoters and politicians.

The South Sea Bubble is often mentioned alongside France's Mississippi Bubble, which also burst in 1720. They were separate schemes, however. The South Sea episode was centered in Britain and involved the South Sea Company, not the East India Company, whose name is sometimes incorrectly substituted.