Which French company was at the center of the Mississippi Bubble, the speculative crash of 1720?

The Mississippi Company was at the center of France’s speculative crash known as the Mississippi Bubble.

The company was developed by Scottish financier John Law, who received permission to develop French trade and settlement in the Mississippi region. Law also gained control over important financial institutions and promoted a system based on paper money and shares in the company.

Investors in France rushed to buy shares, expecting vast profits from North American commerce. The share price rose to extraordinary levels in 1719 and early 1720. Confidence then collapsed when investors sought to convert paper claims and shares into hard currency that the system could not adequately support.

The company’s shares crashed in 1720, damaging public trust in paper money and speculative finance. The episode is commonly paired with the South Sea Bubble because both occurred in 1720, but the Mississippi Bubble unfolded in France and involved a different company, financial system, and political setting.