The French financial bubble centered on John Law’s company was the Mississippi Bubble.
John Law, a Scottish financier, gained influence in France after establishing a bank that issued paper money. His Mississippi Company held a monopoly over French trade and colonization claims in the Mississippi region of North America. The company was later merged with other French trading ventures and became closely connected with the government’s debt-management system.
Investors crowded into shares in Paris, especially on the Rue Quincampoix, and prices rose far beyond what the company’s actual colonial commerce could support. When confidence in the paper-money system and company valuations weakened, share prices collapsed in 1720. Many investors suffered severe losses, and Law fled France.
The Mississippi Bubble and the South Sea Bubble unfolded at roughly the same time, but they were separate events. Both combined speculative share buying with ambitious claims, state finance, and expanding use of paper credit.