Which French speculative bubble of 1720 centered on John Law’s Mississippi Company?

The French speculative bubble of 1720 centered on John Law’s company was the Mississippi Bubble.

John Law controlled the Mississippi Company, which held a monopoly over French trade connected with Louisiana and other parts of the French colonial system. Law also helped expand the use of paper money through the Banque Générale, later linked to the Banque Royale. Investors were encouraged to believe that colonial wealth would justify extraordinary share prices.

Shares rose rapidly in Paris, attracting intense speculation. Confidence broke in 1720 as investors sought to convert paper assets and company shares into more reliable money. The resulting collapse damaged Law’s system and forced him to flee France.

The Mississippi Bubble is often paired with Britain’s South Sea Bubble because both peaked and collapsed in 1720. They were not the same company or market. The French episode also shows how monetary policy, government finance and share speculation could become tightly connected.