Which speculative bubble burst in London in 1720, causing a famous early stock-market crash?

The South Sea Bubble burst in London in 1720, causing a famous early stock-market crash.

The South Sea Company had received special trading privileges and persuaded investors that its shares would bring enormous wealth from commerce with Spanish America. Its actual commercial prospects were far more limited than the excitement suggested. Share prices rose dramatically as politicians, aristocrats, and ordinary investors joined the speculation.

The price reached about £1,000 in August 1720 before collapsing later that year. Many investors borrowed to buy shares, so the fall caused bankruptcies and severe personal losses. Parliament investigated corruption, and the scandal damaged public trust in financial promoters and government officials.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, which also collapsed in 1720. They were separate schemes in different countries. Tulip Mania occurred in the Netherlands during the seventeenth century and was not a stock-market bubble involving a listed company.