South Sea Bubble — Colonial Speculation and Financial Crisis
The South Sea Company, chartered in 1711 to trade with Spanish America under the Asiento agreement, became the centre of Europe's first great speculative financial bubble in 1720, with its shares rising tenfold before collapsing catastrophically. The bubble illustrated both the enormous perceived value of colonial trade and the dangerous tendency of colonial commerce to generate financial instability. The crash ruined thousands of investors, destroyed the ministry of Robert Walpole's predecessors, and produced lasting cynicism about stock companies. It was the first major demonstration that the wealth of empire could produce systemic financial crisis as well as prosperity.
- Year: 1720 CE
- Category: Economic
