Which London-based company became the symbol of Britain’s 1720 stock-market bubble and crash?

The South Sea Company became the symbol of Britain’s 1720 stock-market bubble and crash.

Founded in 1711, the company received a government-backed role in managing part of Britain’s national debt. Investors were attracted by expectations of profitable trade with Spanish America, although the company’s actual commercial opportunities were far more limited than promotional claims suggested. Its shares rose dramatically during 1720 as speculation spread through London.

The bubble burst later that year. Share prices collapsed, damaging investors ranging from wealthy financiers to members of the political establishment. The scandal led to investigations and legislation intended to restrict speculative joint-stock ventures, including the Bubble Act of 1720.

The South Sea Bubble occurred alongside France’s Mississippi Bubble, which was associated with John Law’s financial system. These episodes are often discussed together, but they were separate schemes in different countries. The South Sea Company therefore identifies the British case, not the French one.