The South Sea Bubble
The South Sea Bubble of 1720 was Britain's counterpart to John Law's contemporaneous Mississippi crisis in France: the South Sea Company, which held a monopoly on British trade with Spanish South America and had absorbed much of the national debt through a conversion scheme, saw its share price rise from £128 in January 1720 to over £1,000 in June before collapsing to £150 by December. The parallel with Law's Mississippi Bubble — simultaneously inflating and collapsing across the Channel — was not coincidental: both arose from the attempt of post-war states to use chartered companies to monetise government debt, and their near-simultaneous collapse exposed the shared fragility of early 18th-century public finance. Unlike France, however, Britain emerged from the crisis with its institutions intact: Robert Walpole's political management, the survival of the Bank of England, and the subsequent stability of the consol system meant that British public credit recovered and strengthened, while France's collapse of confidence in paper money persisted for the remaining decades of the Ancien Régime. George I's court was implicated through ministers who had taken bribes from the Company, generating a political scandal whose management defined the early years of Walpole's ascendancy.
- Year: 1720 CE
- Category: Economic
