Which speculative boom’s collapse in France was called the Mississippi Bubble?

The collapse of John Law’s speculative boom in France was called the Mississippi Bubble.

The episode centered on the Mississippi Company, which received a monopoly over trade connected with French territories in North America. Scottish financier John Law also gained control of parts of France’s financial system and promoted banknote-backed expansion. Investors rushed to buy company shares, especially in 1719 and early 1720, driving prices far above levels supported by the company’s actual trade prospects.

Confidence broke in 1720 as doubts grew about the company’s profits and the value of its paper money. Share prices collapsed, damaging investors and undermining Law’s system. The Mississippi Bubble occurred at roughly the same time as Britain’s South Sea Bubble, but the two were separate schemes in different countries. The Mississippi Company did not literally control all trade in the Mississippi region, and the crash was not a modern exchange collapse in the same institutional sense as 1929 or 1987. It remains a classic example of credit expansion, speculation, and a loss of confidence.