Which London market crash in 1720 followed the collapse of the South Sea Company?

The 1720 London market crash that followed the South Sea Company’s collapse is known as the South Sea Bubble.

The South Sea Company received valuable privileges connected with British government debt and promoted expectations of enormous profits from trade with Spanish America. Its share price rose dramatically during 1720, attracting investors from many social classes and encouraging speculation in other ventures.

When confidence broke, the company’s shares plunged. The collapse ruined many investors and caused a political scandal in Britain. Parliamentary investigations found corruption and bribery involving company directors and public officials, and the episode became a lasting example of speculative mania.

The South Sea Bubble occurred alongside France’s Mississippi Bubble, another major speculative collapse in 1720. The two events are related historically but are separate episodes. Neither should be confused with tulip mania in the Dutch Republic, which occurred roughly a century earlier.