Which French company’s 1720 collapse created the Mississippi Bubble?

The Mississippi Company was the French company whose 1720 collapse created the Mississippi Bubble.

John Law promoted the company and its claimed opportunities in French Louisiana. The company later gained control over important French colonial and tax-collection operations, encouraging investors to buy its shares with paper money issued through Law’s banking system.

Speculation pushed the share price sharply higher in 1719 and 1720. Confidence then collapsed when investors sought to convert paper wealth into more reliable assets and the company’s commercial prospects failed to justify its valuation.

The Mississippi Bubble is frequently confused with the South Sea Bubble, which unfolded in Britain during the same period. Both were major eighteenth-century episodes of speculative finance, but they involved different companies and countries.