Britain experienced the 1720 collapse known as the South Sea Bubble.
The South Sea Company was a British joint-stock company that received a government arrangement involving trade with Spanish America and assumed part of Britain’s national debt. Its shares rose dramatically in 1720 as investors expected enormous profits, even though the company’s realistic trading prospects were far more limited than popular enthusiasm suggested.
The price collapsed later that year, ruining many investors and damaging public confidence. The episode became one of the best-known early stock-market bubbles. Parliament investigated the company, and several directors were accused of corruption. The Bubble Act of 1720 also restricted the creation of certain joint-stock companies without a royal charter or parliamentary authority.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720. They were separate schemes in different countries, though both reflected the era’s enthusiasm for paper wealth, government debt conversion, and speculative company shares. The South Sea Company itself did not simply vanish immediately; it continued in a reduced form afterward.