Events
South Sea Bubble
Also Known As The Bubble of 1720
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A speculative bubble in the shares of the South Sea Company that inflated through the spring and summer of 1720 and collapsed that autumn. The Company had taken on a large share of Britain's national debt in exchange for a trading monopoly and government-backed conversion terms, and speculative buying drove its share price far beyond anything its actual trading revenue could support. The collapse ruined thousands of investors, implicated government ministers in the Company's own stock manipulation, and led Parliament to pass the Bubble Act restricting the formation of new joint-stock companies. It stands beside Tulip Mania as one of the two episodes economists reach for first when discussing speculative manias.
Facts
Event DateThe exact day of the peak is not settled in sources; the share price reached its high point in early August 1720 before collapsing by late September. Cross-Tradition Connections
Associated With
The Bank of England was the South Sea Company''s direct rival for management of the national debt through the whole episode; the crash confirmed the Bank''s position as banker to the British government.
In the Other Atlases
Sources
1. Encyclopaedia Britannica
Encyclopaedia Britannica, Inc.South Sea Bubble
2. Wikipedia
Wikimedia FoundationSouth Sea BubbleQuote, South Sea Bubble
The price finally reached 1,000 pounds in early August 1720, and the level of selling was such that the price started to fall
2. Wikipedia
Wikimedia FoundationAssociated With: Bank of England, South Sea Bubble (South Sea Company), Recriminations sectionQuote, Associated With: Bank of England, South Sea Bubble (South Sea Company), Recriminations section
At the time of these events, the Bank of England was also a private company dealing in national debt, and the crash of its rival confirmed its position as banker to the British government.
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