Bubble Act repealed
After 105 years, Parliament repealed the Bubble Act. The restriction on joint-stock companies had so throttled legitimate incorporation that the industrializing British economy was being held back by a rule meant to prevent 17th-century fraud.
The Bubble Act's 105-year lifespan is a good illustration of how over-corrective regulation outlives its original problem. By the time it was repealed, nobody alive had witnessed the South Sea Bubble it was designed to prevent.
01 · The Bubble Act
The South Sea Company crashed in September 1720. Parliament's response, passed that same year, was to effectively ban joint-stock companies altogether. The fraud was stopped — by crippling the legal form that made fraud possible, along with every legitimate use of that form for the next century.
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