Which speculative scheme in 1720 caused a major stock-market collapse in Britain?

The South Sea Bubble was the speculative scheme that caused a major stock-market collapse in Britain in 1720.

The South Sea Company received a government-backed monopoly over British trade with parts of Spanish America, although the practical trading opportunities were far smaller than many investors imagined. The company also took on government debt, and its shares rose dramatically as promoters and speculators fueled optimism.

By late 1720, the price could no longer be justified by the company’s business prospects. Selling spread, the share price collapsed, and many investors lost fortunes. The scandal damaged public confidence and led to parliamentary investigations.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, another 1720 speculative collapse. They were separate schemes in different countries. Tulip mania, by contrast, occurred in the Dutch Republic during the seventeenth century and involved bulb contracts rather than the South Sea Company’s shares.