Memoirs of Extraordinary Popular Delusions
by
Charles Mackay
Part 1 out of 5
MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS
BY CHARLES MACKAY
AUTHOR OF
"THE THAMES AND ITS TRIBUTARIES,"
"THE HOPE OF THE WORLD," ETC.
"Il est bon de connaitre les delires de l'esprit humain.
Chaque people a ses folies plus ou moins grossieres."
MILLOT
VOL I.
LONDON:
RICHARD BENTLEY, NEW BURLINGTON STREET.
PUBLISHER IN ORDINARY TO HER MAJESTY.
1841.
CONTENTS OF THE FIRST VOLUME
THE MISSISSIPPI SCHEME
THE SOUTH SEA BUBBLE
THE TULIPOMANIA
RELICS
MODERN PROPHECIES
POPULAR ADMIRATION FOR GREAT THIEVES
INFLUENCE OF POLITICS AND RELIGION ON THE HAIR AND BEARD
DUELS AND 0RDEALS
THE LOVE OF THE MARVELOUS AND THE DISBELIEF OF THE TRUE
POPULAR FOLLIES IN GREAT CITIES
THE O. P. MANIA
THE THUGS, OR PHANSIGARS
NATIONAL DELUSIONS.
N'en deplaise a ces fous nommes sages de Grece;
En ce monde il n'est point de parfaite sagesse;
Tous les hommes sont fous, et malgre tous leurs soins,
Ne different entre eux que du plus ou du moins.
BOILEAU.
In reading the history of nations, we find that, like individuals,
they have their whims and their peculiarities; their seasons of
excitement and recklessness, when they care not what they do. We find
that whole communities suddenly fix their minds upon one object, and
go mad in its pursuit; that millions of people become simultaneously
impressed with one delusion, and run after it, till their attention is
caught by some new folly more captivating than the first. We see one
nation suddenly seized, from its highest to its lowest members, with a
fierce desire of military glory; another as suddenly becoming crazed
upon a religious scruple, and neither of them recovering its senses
until it has shed rivers of blood and sowed a harvest of groans and
tears, to be reaped by its posterity. At an early age in the annals of
Europe its population lost their wits about the Sepulchre of Jesus,
and crowded in frenzied multitudes to the Holy Land: another age went
mad for fear of the Devil, and offered up hundreds of thousands of
victims to the delusion of witchcraft. At another time, the many
became crazed on the subject of the Philosopher's Stone, and committed
follies till then unheard of in the pursuit. It was once thought a
venial offence in very many countries of Europe to destroy an enemy by
slow poison. Persons who would have revolted at the idea of stabbing a
man to the heart, drugged his pottage without scruple. Ladies of
gentle birth and manners caught the contagion of murder, until
poisoning, under their auspices, became quite fashionable. Some
delusions, though notorious to all the world, have subsisted for ages,
flourishing as widely among civilized and polished nations as among
the early barbarians with whom they originated, -- that of duelling, for
instance, and the belief in omens and divination of the future, which
seem to defy the progress of knowledge to eradicate entirely from the
popular mind. Money, again, has often been a cause of the delusion of
multitudes. Sober nations have all at once become desperate gamblers,
and risked almost their existence upon the turn of a piece of paper.
To trace the history of the most prominent of these delusions is the
object of the present pages. Men, it has been well said, think in
herds; it will be seen that they go mad in herds, while they only
recover their senses slowly, and one by one.
In the present state of civilization, society has often shown
itself very prone to run a career of folly from the last-mentioned
cases. This infatuation has seized upon whole nations in a most
extraordinary manner. France, with her Mississippi madness, set the
first great example, and was very soon imitated by England with her
South Sea Bubble. At an earlier period, Holland made herself still
more ridiculous in the eyes of the world, by the frenzy which came
over her people for the love of Tulips. Melancholy as all these
delusions were in their ultimate results, their history is most
amusing. A more ludicrous and yet painful spectacle, than that which
Holland presented in the years 1635 and 1636, or France in 1719 and
1720, can hardly be imagined. Taking them in the order of their
importance, we shall commence our history with John Law and the famous
Mississippi scheme of the years above mentioned.
THE MISSISSIPPI SCHEME
Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry 'em down;
Divide the empty nothing into shares,
And set the crowd together by the ears.
Defoe.
The personal character and career of one man are so intimately
connected with the great scheme of the years 1719 and 1720, that a
history of the Mississippi madness can have no fitter introduction
than a sketch of the life of its great author, John Law. Historians
are divided in opinion as to whether they should designate him a knave
or a madman. Both epithets were unsparingly applied to him in his
lifetime, and while the unhappy consequences of his projects were
still deeply felt. Posterity, however, has found reason to doubt the
justice of the accusation, and to confess that John Law was neither
knave nor madman, but one more deceived than deceiving; more sinned
against than sinning. He was thoroughly acquainted with the philosophy
and true principles of credit. He understood the monetary question
better than any man of his day; and if his system fell with a crash so
tremendous, it was not so much his fault as that of the people amongst
whom he had erected it. He did not calculate upon the avaricious
frenzy of a whole nation; he did not see that confidence, like
mistrust, could be increased, almost ad infinitum, and that hope was
as extravagant as fear. How was he to foretell that the French people,
like the man in the fable, would kill, in their frantic eagerness, the
fine goose he had brought to lay them so many golden eggs? His fate
was like that which may be supposed to have overtaken the first
adventurous boatman who rowed from Erie to Ontario. Broad and smooth
was the river on which he embarked; rapid and pleasant was his
progress; and who was to stay him in his career? Alas for him! the
cataract was nigh. He saw, when it was too late, that the tide which
wafted him so joyously along was a tide of destruction; and when he
endeavoured to retrace his way, he found that the current was too
strong for his weak efforts to stem, and that he drew nearer every
instant to the tremendous falls. Down he went over the sharp rocks,
and the waters with him. He was dashed to pieces with his bark, but
the waters, maddened and turned to foam by the rough descent, only
boiled and bubbled for a time, and then flowed on again as smoothly as
ever. Just so it was with Law and the French people. He was the
boatman and they were the waters.
John Law was born at Edinburgh in the year 1671. His father was
the younger son of an ancient family in Fife, and carried on the
business of a goldsmith and banker. He amassed considerable wealth in
his trade, sufficient to enable him to gratify the wish, so common
among his countrymen, of adding a territorial designation to his name.
He purchased with this view the estates of Lauriston and Randleston,
on the Frith of Forth on the borders of West and Mid Lothian, and was
thenceforth known as Law of Lauriston. The subject of our memoir,
being the eldest son, was received into his father's counting-house at
the age of fourteen, and for three years laboured hard to acquire an
insight into the principles of banking, as then carried on in
Scotland. He had always manifested great love for the study of
numbers, and his proficiency in the mathematics was considered
extraordinary in one of his tender years. At the age of seventeen he
was tall, strong, and well made; and his face, although deeply scarred
with the small-pox, was agreeable in its expression, and full of
intelligence. At this time he began to neglect his business, and
becoming vain of his person, indulged in considerable extravagance of
attire. He was a great favourite with the ladies, by whom he was
called Beau Law, while the other sex, despising his foppery, nicknamed
him Jessamy John. At the death of his father, which happened in 1688,
he withdrew entirely from the desk, which had become so irksome, and
being possessed of the revenues of the paternal estate of Lauriston,
he proceeded to London, to see the world.
He was now very young, very vain, good-looking, tolerably rich,
and quite uncontrolled. It is no wonder that, on his arrival in the
capital, he should launch out into extravagance. He soon became a
regular frequenter of the gaming-houses, and by pursuing a certain
plan, based upon some abstruse calculation of chances, he contrived to
gain considerable sums. All the gamblers envied him his luck, and many
made it a point to watch his play, and stake their money on the same
chances. In affairs of gallantry he was equally fortunate; ladies of
the first rank smiled graciously upon the handsome Scotchman -- the
young, the rich, the witty, and the obliging. But all these successes
only paved the way for reverses. After he had been for nine years
exposed to the dangerous attractions of the gay life he was leading,
he became an irrecoverable gambler. As his love of play increased in
violence, it diminished in prudence. Great losses were only to be
repaired by still greater ventures, and one unhappy day he lost more
than he could repay without mortgaging his family estate. To that step
he was driven at last. At the same time his gallantry brought him into
trouble. A love affair, or slight flirtation, with a lady of the name
of Villiers [Miss Elizabeth Villiers, afterwards Countess of Orkney]
exposed him to the resentment of a Mr. Wilson, by whom he was
challenged to fight a duel. Law accepted, and had the ill fortune to
shoot his antagonist dead upon the spot. He was arrested the same day,
and brought to trial for murder by the relatives of Mr. Wilson. He was
afterwards found guilty, and sentenced to death. The sentence was
commuted to a fine, upon the ground that the offence only amounted to
manslaughter. An appeal being lodged by a brother of the deceased, Law
was detained in the King's Bench, whence, by some means or other,
which he never explained, he contrived to escape; and an action being
instituted against the sheriffs, he was advertised in the Gazette, and
a reward offered for his apprehension. He was described as "Captain
John Law, a Scotchman, aged twenty-six; a very tall, black, lean man;
well shaped, above six feet high, with large pockholes in his face;
big nosed, and speaking broad and loud." As this was rather a
caricature than a description of him, it has been supposed that it was
drawn up with a view to favour his escape. He succeeded in reaching
the Continent, where he travelled for three years, and devoted much of
his attention to the monetary and banking affairs of the countries
through which he passed. He stayed a few months in Amsterdam, and
speculated to some extent in the funds. His mornings were devoted to
the study of finance and the principles of trade, and his evenings to
the gaming-house. It is generally believed that he returned to
Edinburgh in the year 1700. It is certain that he published in that
city his "Proposals and Reasons for constituting a Council of Trade."
This pamphlet did not excite much attention.
In a short time afterwards he published a project for establishing
what he called a Land-bank [The wits of the day called it a sand-bank,
which would wreck the vessel of the state.], the notes issued by which
were never to exceed the value of the entire lands of the state, upon
ordinary interest, or were to be equal in value to the land, with the
right to enter into possession at a certain time. The project excited
a good deal of discussion in the Scottish parliament, and a motion for
the establishment of such a bank was brought forward by a neutral
party, called the Squadrone, whom Law had interested in his favour.
The Parliament ultimately passed a resolution to the effect, that, to
establish any kind of paper credit, so as to force it to pass, was an
improper expedient for the nation.
Upon the failure of this project, and of his efforts to procure a
pardon for the murder of Mr. Wilson, Law withdrew to the Continent,
and resumed his old habits of gaming. For fourteen years he continued
to roam about, in Flanders, Holland, Germany, Hungary, Italy, and
France. He soon became intimately acquainted with the extent of the
trade and resources of each, and daily more confirmed in his opinion
that no country could prosper without a paper currency. During the
whole of this time he appears to have chiefly supported himself by
successful play. At every gambling-house of note in the capitals of
Europe, he was known and appreciated as one better skilled in the
intricacies of chance than any other man of the day. It is stated in
the "Biographie Universelle" that he was expelled, first from Venice,
and afterwards from Genoa, by the magistrates, who thought him a
visitor too dangerous for the youth of those cities. During his
residence in Paris he rendered himself obnoxious to D'Argenson, the
lieutenant-general of the police, by whom he was ordered to quit the
capital. This did not take place, however, before he had made the
acquaintance in the saloons, of the Duke de Vendome, the Prince de
Conti, and of the gay Duke of Orleans, the latter of whom was destined
afterwards to exercise so much influence over his fate. The Duke of
Orleans was pleased with the vivacity and good sense of the Scottish
adventurer, while the latter was no less pleased with the wit and
amiability of a prince who promised to become his patron. They were
often thrown into each other's society, and Law seized every
opportunity to instil his financial doctrines into the mind of one
whose proximity to the throne pointed him out as destined, at no very
distant date, to play an important part in the government.
Shortly before the death of Louis XIV, or, as some say, in 1708,
Law proposed a scheme of finance to Desmarets, the Comptroller. Louis
is reported to have inquired whether the projector were a Catholic,
and, on being answered in the negative, to have declined having
anything to do with him. [This anecdote, which is related in the
correspondence of Madame de Baviere, Duchess of Orleans, and mother of
the Regent, is discredited by Lord John Russell, in his "History of
the principal States of Europe, from the Peace of Utrecht;" for what
reason he does not inform us. There is no doubt that Law proposed his
scheme to Desmarets, and that Louis refused to hear of it. The reason
given for the refusal is quite consistent with the character of that
bigoted and tyrannical monarch.]
It was after this repulse that he visited Italy. His mind being
still occupied with schemes of finance, he proposed to Victor Amadeus,
Duke of Savoy, to establish his land-bank in that country. The Duke
replied that his dominions were too circumscribed for the execution of
so great a project, and that he was by far too poor a potentate to be
ruined. He advised him, however, to try the King of France once more;
for he was sure, if he knew anything of the French character, that the
people would be delighted with a plan, not only so new, but so
plausible.
Louis XIV died in 1715, and the heir to the throne being an
infant only seven years of age, the Duke of Orleans assumed the reins
of government, as Regent, during his minority. Law now found himself
in a more favourable position. The tide in his affairs had come,
which, taken at the flood, was to waft him on to fortune. The Regent
was his friend, already acquainted with his theory and pretensions,
and inclined, moreover, to aid him in any efforts to restore the
wounded credit of France, bowed down to the earth by the extravagance
of the long reign of Louis XIV.
Hardly was that monarch laid in his grave ere the popular hatred,
suppressed so long, burst forth against his memory. He who, during his
life, had been flattered with an excess of adulation, to which history
scarcely offers a parallel, was now cursed as a tyrant, a bigot, and a
plunderer. His statues were pelted and disfigured; his effigies torn
down, amid the execrations of the populace, and his name rendered
synonymous with selfishness and oppression. The glory of his arms was
forgotten, and nothing was remembered but his reverses, his
extravagance, and his cruelty.
The finances of the country were in a state of the utmost
disorder. A profuse and corrupt monarch, whose profuseness and
corruption were imitated by almost every functionary, from the highest
to the lowest grade, had brought France to the verge of ruin. The
national debt amounted to 3000 millions of livres, the revenue to 145
millions, and the expenditure to 142 millions per annum; leaving only
three millions to pay the interest upon 3000 millions. The first care
of the Regent was to discover a remedy for an evil of such magnitude,
and a council was early summoned to take the matter into
consideration. The Duke de St. Simon was of opinion that nothing could
save the country from revolution but a remedy at once bold and
dangerous. He advised the Regent to convoke the States-General, and
declare a national bankruptcy. The Duke de Noailles, a man of
accommodating principles, an accomplished courtier, and totally averse
from giving himself any trouble or annoyance that ingenuity could
escape from, opposed the project of St. Simon with all his influence.
He represented the expedient as alike dishonest and ruinous. The
Regent was of the same opinion, and this desperate remedy fell to the
ground.
The measures ultimately adopted, though they promised fair, only
aggravated the evil. The first, and most dishonest measure, was of no
advantage to the state. A recoinage was ordered, by which the currency
was depreciated one-fifth; those who took a thousand pieces of gold or
silver to the mint received back an amount of coin of the same nominal
value, but only four-fifths of the weight of metal. By this
contrivance the treasury gained seventy-two millions of livres, and
all the commercial operations of the country were disordered. A
trifling diminution of the taxes silenced the clamours of the people,
and for the slight present advantage the great prospective evil was
forgotten.
A chamber of justice was next instituted, to inquire into the
malversations of the loan-contractors and the farmers of the revenues.
Tax collectors are never very popular in any country, but those of
France at this period deserved all the odium with which they were
loaded. As soon as these farmers-general, with all their hosts of
subordinate agents, called maltotiers [From maltote, an oppressive
tax.], were called to account for their misdeeds, the most extravagant
joy took possession of the nation. The Chamber of Justice, instituted
chiefly for this purpose, was endowed with very extensive powers. It
was composed of the presidents and councils of the parliament, the
judges of the Courts of Aid and of Requests, and the officers of the
Chamber of Account, under the general presidence of the minister of
finance. Informers were encouraged to give evidence against the
offenders by the promise of one-fifth part of the fines and
confiscations. A tenth of all concealed effects belonging to the
guilty was promised to such as should furnish the means of discovering
them.
The promulgation of the edict constituting this court caused a
degree of consternation among those principally concerned which can
only be accounted for on the supposition that their peculation had
been enormous. But they met with no sympathy. The proceedings against
them justified their terror. The Bastile was soon unable to contain
the prisoners that were sent to it, and the gaols all over the country
teemed with guilty or suspected persons. An order was issued to all
innkeepers and postmasters to refuse horses to such as endeavoured to
seek safety in flight; and all persons were forbidden, under heavy
fines, to harbour them or favour their evasion. Some were condemned to
the pillory, others to the gallies, and the least guilty to fine and
imprisonment. One only, Samuel Bernard, a rich banker, and
farmer-general of a province remote from the capital, was sentenced to
death. So great had been the illegal profits of this man, -- looked
upon as the tyrant and oppressor of his district, -- that he offered
six millions of livres, or 250,000 pounds sterling, to be allowed to
escape.
His bribe was refused, and he suffered the penalty of death.
Others, perhaps more guilty, were more fortunate. Confiscation, owing
to the concealment of their treasures by the delinquents, often
produced less money than a fine. The severity of the government
relaxed, and fines, under the denomination of taxes, were
indiscriminately levied upon all offenders. But so corrupt was every
department of the administration, that the country benefited but
little by the sums which thus flowed into the treasury. Courtiers, and
courtiers' wives and mistresses, came in for the chief share of the
spoils. One contractor had been taxed in proportion to his wealth and
guilt, at the sum of twelve millions of livres. The Count * * *, a man
of some weight in the government, called upon him, and offered to
procure a remission of the fine, if he would give him a hundred
thousand crowns. "Vous etes trop tard, mon ami," replied the
financier; "I have already made a bargain with your wife for fifty
thousand." [This anecdote is related by M. de la Hode, in his Life of
Philippe of Orleans. It would have looked more authentic if he had
given the names of the dishonest contractor and the still more
dishonest minister. But M. de la Hode's book is liable to the same
objection as most of the French memoirs of that and of subsequent
periods. It is sufficient with most of them that an anecdote be ben
trovato; the veto is but matter of secondary consideration.]
About a hundred and eighty millions of livres were levied in this
manner, of which eighty were applied in payment of the debts
contracted by the government. The remainder found its way into the
pockets of the courtiers. Madame de Maintenon, writing on this
subject, says, "We hear every day of some new grant of the Regent; the
people murmur very much at this mode of employing the money taken from
the peculators." The people, who, after the first burst of their
resentment is over, generally express a sympathy for the weak, were
indignant that so much severity should be used to so little purpose.
They did not see the justice of robbing one set of rogues to fatten
another. In a few months all the more guilty had been brought to
punishment, and the chamber of justice looked for victims in humbler
walks of life. Charges of fraud and extortion were brought against
tradesmen of good character, in consequence of the great inducements
held out to common informers. They were compelled to lay open their
affairs before this tribunal in order to establish their innocence.
The voice of complaint resounded from every side, and at the
expiration of a year the government found it advisable to discontinue
further proceedings. The chamber of justice was suppressed, and a
general amnesty granted to all against whom no charges had yet been
preferred.
In the midst of this financial confusion Law appeared upon the
scene. No man felt more deeply than the Regent the deplorable state of
the country, but no man could be more averse from putting his
shoulders manfully to the wheel. He disliked business; he signed
official documents without proper examination, and trusted to others
what he should have undertaken himself. The cares inseparable from his
high office were burdensome to him; he saw that something was
necessary to be done, but he lacked the energy to do it, and had not
virtue enough to sacrifice his case and his pleasures in the attempt.
No wonder that, with this character, he listened favourably to the
mighty projects, so easy of execution, of the clever adventurer whom
he had formerly known, and whose talents he appreciated.
When Law presented himself at court, he was most cordially
received. He offered two memorials to the Regent, in which he set
forth the evils that had befallen France, owing to an insufficient
currency, at different times depreciated. He asserted that a metallic
currency, unaided by a paper money, was wholly inadequate to the wants
of a commercial country, and particularly cited the examples of Great
Britain and Holland to show the advantages of paper. He used many
sound arguments on the subject of credit, and proposed, as a means of
restoring that of France, then at so low an ebb among the nations,
that he should be allowed to set up a bank, which should have the
management of the royal revenues, and issue notes, both on that and on
landed security. He further proposed that this bank should be
administered in the King's name, but subject to the control of
commissioners, to be named by the States-General.
While these memorials were under consideration, Law translated
into French his essay on money and trade, and used every means to
extend through the nation his renown as a financier. He soon became
talked of. The confidants of the Regent spread abroad his praise, and
every one expected great things of Monsieur Lass. [The French
pronounced his name in this manner to avoid the ungallic sound, aw.
After the failure of his scheme, the wags said the nation was lasse de
lui, and proposed that he should in future be known by the name of
Monsieur Helas!]
On the 5th of May, 1716, a royal edict was published, by which Law
was authorised, in conjunction with his brother, to establish a bank,
under the name of Law and Company, the notes of which should be
received in payment of the taxes. The capital was fixed at six
millions of livres, in twelve thousand shares of five hundred livres
each, purchasable one-fourth in specie and the remainder in billets
d'etat. It was not thought expedient to grant him the whole of the
privileges prayed for in his memorials until experience should have
shown their safety and advantage.
Law was now on the high road to fortune. The study of thirty years
was brought to guide him in the management of his bank. He made all
his notes payable at sight, and in the coin current at the time they
were issued. This last was a master-stroke of policy, and immediately
rendered his notes more valuable than the precious metals. The latter
were constantly liable to depreciation by the unwise tampering of the
government. A thousand livres of silver might be worth their nominal
value one day and be reduced one-sixth the next, but a note of Law's
bank retained its original value. He publicly declared at the same
time that a banker deserved death if he made issues without having
sufficient security to answer all demands. The consequence was, that
his notes advanced rapidly in public estimation, and were received at
one per cent. more than specie. It was not long before the trade of
the country felt the benefit. Languishing commerce began to lift up
her head; the taxes were paid with greater regularity and less
murmuring, and a degree of confidence was established that could not
fail, if it continued, to become still more advantageous. In the
course of a year Law's notes rose to fifteen per cent. premium, while
the billets d'etat, or notes issued by the government, as security for
the debts contracted by the extravagant Louis XIV, were at a discount
of no less than seventy-eight and a half per cent. The comparison was
too great in favour of Law not to attract the attention of the whole
kingdom, and his credit extended itself day by day. Branches of his
bank were almost simultaneously established at Lyons, Rochelle, Tours,
Amiens, and Orleans.
The Regent appears to have been utterly astonished at his success,
and gradually to have conceived the idea, that paper, which could so
aid a metallic currency, could entirely supersede it. Upon this
fundamental error he afterwards acted. In the mean time, Law commenced
the famous project which has handed his name down to posterity. He
proposed to the Regent, who could refuse him nothing, to establish a
company, that should have the exclusive privilege of trading to the
great river Mississippi and the province of Louisiana, on its western
bank. The country was supposed to abound in the precious metals, and
the company, supported by the profits of their exclusive commerce,
were to be the sole farmers of the taxes, and sole coiners of money.
Letters patent were issued, incorporating the company, in August 1717.
The capital was divided into two hundred thousand shares of five
hundred livres each, the whole of which might be paid in billets
d'etat, at their nominal value, although worth no more than 160 livres
in the market.
It was now that the frenzy of speculating began to seize upon the
nation. Law's bank had effected so much good, that any promises for
the future which he thought proper to make were readily believed. The
Regent every day conferred new privileges upon the fortunate
projector. The bank obtained the monopoly of the sale of tobacco; the
sole right of refinage of gold and silver, and was finally erected
into the Royal Bank of France. Amid the intoxication of success, both
Law and the Regent forgot the maxim so loudly proclaimed by the
former, that a banker deserved death who made issues of paper without
the necessary funds to provide for them. As soon as the bank, from
a private, became a public institution, the Regent caused a
fabrication of notes to the amount of one thousand millions of livres.
This was the first departure from sound principles, and one for which
Law is not justly blameable. While the affairs of the bank were under
his control, the issues had never exceeded sixty millions. Whether Law
opposed the inordinate increase is not known, but as it took place as
soon as the bank was made a royal establishment, it is but fair to lay
the blame of the change of system upon the Regent.
Law found that he lived under a despotic government, but he was
not yet aware of the pernicious influence which such a government
could exercise upon so delicate a framework as that of credit. He
discovered it afterwards to his cost, but in the mean time suffered
himself to be impelled by the Regent into courses which his own reason
must have disapproved. With a weakness most culpable, he lent his aid
in inundating the country with paper money, which, based upon no solid
foundation, was sure to fall, sooner or later. The extraordinary
present fortune dazzled his eyes, and prevented him from seeing the
evil day that would burst over his head, when once, from any cause or
other, the alarm was sounded. The Parliament were from the first
jealous of his influence as a foreigner, and had, besides, their
misgivings as to the safety of his projects. As his influence
extended, their animosity increased. D'Aguesseau, the Chancellor, was
unceremoniously dismissed by the Regent for his opposition to the vast
increase of paper money, and the constant depreciation of the gold and
silver coin of the realm. This only served to augment the enmity of
the Parliament, and when D'Argenson, a man devoted to the interests of
the Regent, was appointed to the vacant chancellorship, and made at
the same time minister of finance, they became more violent than ever.
The first measure of the new minister caused a further depreciation of
the coin. In order to extinguish the billets d'etat, it was ordered
that persons bringing to the mint four thousand livres in specie and
one thousand livres in billets d'etat, should receive back coin to the
amount of five thousand livres. D'Argenson plumed himself mightily
upon thus creating five thousand new and smaller livres out of the
four thousand old and larger ones, being too ignorant of the true
principles of trade and credit to be aware of the immense injury he
was inflicting upon both.
The Parliament saw at once the impolicy and danger of such a
system, and made repeated remonstrances to the Regent. The latter
refused to entertain their petitions, when the Parliament, by a bold,
and very unusual stretch of authority, commanded that no money should
be received in payment but that of the old standard. The Regent
summoned a lit de justice, and annulled the decree. The Parliament
resisted, and issued another. Again the Regent exercised his
privilege, and annulled it, till the Parliament, stung to fiercer
opposition, passed another decree, dated August 12th, 1718, by which
they forbade the bank of Law to have any concern, either direct or
indirect, in the administration of the revenue; and prohibited all
foreigners, under heavy penalties, from interfering, either in their
own names, or in that of others, in the management of the finances of
the state. The Parliament considered Law to be the author of all the
evil, and some of the counsellors, in the virulence of their enmity,
proposed that he should be brought to trial, and, if found guilty, be
hung at the gates of the Palais de Justice.
Law, in great alarm, fled to the Palais Royal, and threw himself
on the protection of the Regent, praying that measures might be taken
to reduce the Parliament to obedience. The Regent had nothing so much
at heart, both on that account and because of the disputes that had
arisen relative to the legitimation of the Duke of Maine and the Count
of Thoulouse, the sons of the late King. The Parliament was ultimately
overawed by the arrest of their president and two of the counsellors,
who were sent to distant prisons.
Thus the first cloud upon Law's prospects blew over: freed from
apprehension of personal danger, he devoted his attention to his
famous Mississippi project, the shares of which were rapidly rising,
in spite of the Parliament. At the commencement of the year 1719 an
edict was published, granting to the Mississippi Company the exclusive
privilege of trading to the East Indies, China, and the South Seas,
and to all the possessions of the French East India Company,
established by Colbert. The Company, in consequence of this great
increase of their business, assumed, as more appropriate, the title of
Company of the Indies, and created fifty thousand new shares. The
prospects now held out by Law were most magnificent. He promised a
yearly dividend of two hundred livres upon each share of five hundred,
which, as the shares were paid for in billets d'etat, at their nominal
value, but worth only 100 livres, was at the rate of about 120 per
cent. profit.
The public enthusiasm, which had been so long rising, could not
resist a vision so splendid. At least three hundred thousand
applications were made for the fifty thousand new shares, and Law's
house in the Rue de Quincampoix was beset from morning to night by the
eager applicants. As it was impossible to satisfy them all, it was
several weeks before a list of the fortunate new stockholders could be
made out, during which time the public impatience rose to a pitch of
frenzy. Dukes, marquises, counts, with their duchesses, marchionesses,
and countesses, waited in the streets for hours every day before Mr.
Law's door to know the result. At last, to avoid the jostling of the
plebeian crowd, which, to the number of thousands, filled the whole
thoroughfare, they took apartments in the adjoining houses, that they
might be continually near the temple whence the new Plutus was
diffusing wealth. Every day the value of the old shares increased, and
the fresh applications, induced by the golden dreams of the whole
nation, became so numerous that it was deemed advisable to create no
less than three hundred thousand new shares, at five thousand livres
each, in order that the Regent might take advantage of the popular
enthusiasm to pay off the national debt. For this purpose, the sum of
fifteen hundred millions of livres was necessary. Such was the
eagerness of the nation, that thrice the sum would have been
subscribed if the government had authorised it.
Law was now at the zenith of his prosperity, and the people were
rapidly approaching the zenith of their infatuation. The highest and
the lowest classes were alike filled with a vision of boundless
wealth. There was not a person of note among the aristocracy, with the
exception of the Duke of St. Simon and Marshal Villars, who was not
engaged in buying or selling stock. People of every age and sex, and
condition in life, speculated in the rise and fall of the Mississippi
bonds. The Rue de Quincampoix was the grand resort of the jobbers, and
it being a narrow, inconvenient street, accidents continually occurred
in it, from the tremendous pressure of the crowd. Houses in it, worth,
in ordinary times, a thousand livres of yearly rent, yielded as much
as twelve or sixteen thousand. A cobbler, who had a stall in it,
gained about two hundred livres a day by letting it out, and
furnishing writing materials to brokers and their clients. The story
goes, that a hump-backed man who stood in the street gained
considerable sums by lending his hump as a writing-desk to the eager
speculators! The great concourse of persons who assembled to do
business brought a still greater concourse of spectators. These again
drew all the thieves and immoral characters of Paris to the spot, and
constant riots and disturbances took place. At nightfall, it was often
found necessary to send a troop of soldiers to clear the street.
Law, finding the inconvenience of his residence, removed to the
Place Vendome, whither the crowd of agioteurs followed him. That
spacious square soon became as thronged as the Rue de Quincampoix :
from morning to night it presented the appearance of a fair. Booths
and tents were erected for the transaction of business and the sale of
refreshments, and gamblers with their roulette tables stationed
themselves in the very middle of the place, and reaped a golden, or
rather a paper, harvest from the throng. The Boulevards and public
gardens were forsaken; parties of pleasure took their walks in
preference in the Place Vendome, which became the fashionable lounge
of the idle, as well as the general rendezvous of the busy. The noise
was so great all day, that the Chancellor, whose court was situated in
the square, complained to the Regent and the municipality, that he
could not hear the advocates. Law, when applied to, expressed his
willingness to aid in the removal of the nuisance, and for this
purpose entered into a treaty with the Prince de Carignan for the
Hotel de Soissons, which had a garden of several acres in the rear. A
bargain was concluded, by which Law became the purchaser of the hotel,
at an enormous price, the Prince reserving to himself the magnificent
gardens as a new source of profit. They contained some fine statues
and several fountains, and were altogether laid out with much taste.
As soon as Law was installed in his new abode, an edict was published,
forbidding all persons to buy or sell stock anywhere but in the
gardens of the Hotel de Soissons. In the midst among the trees, about
five hundred small tents and pavilions were erected, for the
convenience of the stock-jobbers. Their various colours, the gay
ribands and banners which floated from them, the busy crowds which
passed continually in and out--the incessant hum of voices, the noise,
the music, and the strange mixture of business and pleasure on the
countenances of the throng, all combined to give the place an air of
enchantment that quite enraptured the Parisians. The Prince de
Carignan made enormous profits while the delusion lasted. Each tent
was let at the rate of five hundred livres a month; and, as there were
at least five hundred of them, his monthly revenue from this source
alone must have amounted to 250,000 livres, or upwards of 10,000
pounds sterling.
The honest old soldier, Marshal Villars, was so vexed to see the
folly which had smitten his countrymen, that he never could speak with
temper on the subject. Passing one day through the Place Vendome in
his carriage, the choleric gentleman was so annoyed at the infatuation
of the people, that he abruptly ordered his coachman to stop, and,
putting his head out of the carriage window, harangued them for full
half an hour on their "disgusting avarice." This was not a very wise
proceeding on his part. Hisses and shouts of laughter resounded from
every side, and jokes without number were aimed at him. There being at
last strong symptoms that something more tangible was flying through
the air in the direction of his head, Marshal was glad to drive on. He
never again repeated the experiment.
Two sober, quiet, and philosophic men of letters, M. de la Motte
and the Abbe Terrason, congratulated each other, that they, at least,
were free from this strange infatuation. A few days afterwards, as the
worthy Abbe was coming out of the Hotel de Soissons, whither he had
gone to buy shares in the Mississippi, whom should he see but his
friend La Motte entering for the same purpose. "Ha!" said the Abbe,
smiling, "is that you?" "Yes," said La Motte, pushing past him as fast
as he was able; "and can that be you?" The next time the two scholars
met, they talked of philosophy, of science, and of religion, but
neither had courage for a long time to breathe one syllable about the
Mississippi. At last, when it was mentioned, they agreed that a man
ought never to swear against his doing any one thing, and that there
was no sort of extravagance of which even a wise man was not capable.
During this time, Law, the new Plutus, had become all at once the
most important personage of the state. The ante-chambers of the Regent
were forsaken by the courtiers. Peers, judges, and bishops thronged to
the Hotel de Soissons; officers of the army and navy, ladies of title
and fashion, and every one to whom hereditary rank or public employ
gave a claim to precedence, were to be found waiting in his
ante-chambers to beg for a portion of his India stock. Law was so
pestered that he was unable to see one-tenth part of the applicants,
and every manoeuvre that ingenuity could suggest was employed to gain
access to him. Peers, whose dignity would have been outraged if the
Regent had made them wait half an hour for an interview, were content
to wait six hours for the chance of seeing Monsieur Law. Enormous fees
were paid to his servants, if they would merely announce their names.
Ladies of rank employed the blandishments of their smiles for the same
object; but many of them came day after day for a fortnight before
they could obtain an audience. When Law accepted an invitation, he was
sometimes so surrounded by ladies, all asking to have their names put
down in his lists as shareholders in the new stock, that, in spite of
his well-known and habitual gallantry, he was obliged to tear himself
away par force. The most ludicrous stratagems were employed to have an
opportunity of speaking to him. One lady, who had striven in vain
during several days, gave up in despair all attempts to see him at his
own house, but ordered her coachman to keep a strict watch whenever
she was out in her carriage, and if he saw Mr. Law coming, to drive
against a post, and upset her. The coachman promised obedience, and
for three days the lady was driven incessantly through the town,
praying inwardly for the opportunity to be overturned. At last she
espied Mr. Law, and, pulling the string, called out to the coachman,
"Upset us now! for God's sake, upset us now!" The coachman drove
against a post, the lady screamed, the coach was overturned, and Law,
who had seen the accident, hastened to the spot to render assistance.
The cunning dame was led into the Hotel de Soissons, where she soon
thought it advisable to recover from her fright, and, after
apologizing to Mr. Law, confessed her stratagem. Law smiled, and
entered the lady in his books as the purchaser of a quantity of India
stock. Another story is told of a Madame de Boucha, who, knowing that
Mr. Law was at dinner at a certain house, proceeded thither in her
carriage, and gave the alarm of fire. The company started from table,
and Law among the rest; but, seeing one lady making all haste into the
house towards him, while everybody else was scampering away, he
suspected the trick, and ran off in another direction.
Many other anecdotes are related, which even, though they may be a
little exaggerated, are nevertheless worth preserving, as showing the
spirit of that singular period. [The curious reader may find an
anecdote of the eagerness of the French ladies to retain Law in their
company, which will make him blush or smile according as he happens to
be very modest or the reverse. It is related in the Letters of Madame
Charlotte Elizabeth de Baviere, Duchess of Orleans, vol. ii. p. 274.]
The Regent was one day mentioning, in the presence of D'Argenson, the
Abbe Dubois, and some other persons, that he was desirous of deputing
some lady, of the rank at least of a Duchess, to attend upon his
daughter at Modena; "but," added he, "I do not exactly know where to
find one." "No!" replied one, in affected surprise; "I can tell you
where to find every Duchess in France :--you have only to go to Mr.
Law's; you will see them every one in his ante-chamber."
M. de Chirac, a celebrated physician, had bought stock at an
unlucky period, and was very anxious to sell out. Stock, however
continued to fall for two or three days, much to his alarm. His mind
was filled with the subject, when he was suddenly called upon to
attend a lady, who imagined herself unwell. He arrived, was shown up
stairs, and felt the lady's pulse. "It falls! it falls! good God! it
falls continually!" said he, musingly, while the lady looked up in his
face, all anxiety for his opinion. "Oh! M. de Chirac," said she,
starting to her feet, and ringing the bell for assistance; "I am
dying! I am dying! it falls! it falls! it falls!" "What falls?"
inquired the doctor, in amazement. "My pulse! my pulse!" said the
lady; "I must be dying." "Calm your apprehensions, my dear Madam,"
said M. de Chirac; "I was speaking of the stocks. The truth is, I have
been a great loser, and my mind is so disturbed, I hardly know what I
have been saying."
The price of shares sometimes rose ten or twenty per cent. in the
course of a few hours, and many persons in the humbler walks of life,
who had risen poor in the morning, went to bed in affluence. An
extensive holder of stock, being taken ill, sent his servant to sell
two hundred and fifty shares, at eight thousand livres each, the price
at which they were then quoted. The servant went, and, on his arrival
in the Jardin de Soissons, found that in the interval the price had
risen to ten thousand livres. The difference of two thousand livres on
the two hundred and fifty shares, amounting to 500,000 livres, or
20,000 pounds sterling, he very coolly transferred to his own use,
and, giving the remainder to his master, set out the same evening for
another country. Law's coachman in a very short time made money enough
to set up a carriage of his own, and requested permission to leave his
service. Law, who esteemed the man, begged of him as a favour, that he
would endeavour, before he went, to find a substitute as good as
himself. The coachman consented, and in the evening brought two of his
former comrades, telling Mr. Law to choose between them, and he would
take the other. Cookmaids and footmen were now and then as lucky, and,
in the full-blown pride of their easily-acquired wealth, made the most
ridiculous mistakes. Preserving the language and manners of their old,
with the finery of their new station, they afforded continual subjects
for the pity of the sensible, the contempt of the sober, and the
laughter of everybody. But the folly and meanness of the higher ranks
of society were still more disgusting. One instance alone, related by
the Duke de St. Simon, will show the unworthy avarice which infected
the whole of society. A man of the name of Andre, without character or
education, had, by a series of well-timed speculations in Mississippi
bonds, gained enormous wealth, in an incredibly short space of time.
As St. Simon expresses it, "he had amassed mountains of gold." As he
became rich, he grew ashamed of the lowness of his birth, and anxious
above all things to be allied to nobility. He had a daughter, an
infant only three years of age, and he opened a negotiation with the
aristocratic and needy family of D'Oyse, that this child should, upon
certain conditions, marry a member of that house. The Marquis d'Oyse,
to his shame, consented, and promised to marry her himself on her
attaining the age of twelve, if the father would pay him down the sum
of a hundred thousand crowns, and twenty thousand livres every year,
until the celebration of the marriage. The Marquis was himself in his
thirty-third year. This scandalous bargain was duly signed and sealed,
the stockjobber furthermore agreeing to settle upon his daughter, on
the marriage-day, a fortune of several millions. The Duke of Brancas,
the head of the family, was present throughout the negotiation, and
shared in all the profits. St. Simon, who treats the matter with the
levity becoming what he thought so good a joke, adds, "that people did
not spare their animadversions on this beautiful marriage," and
further informs us, "that the project fell to the ground some months
afterwards by the overthrow of Law, and the ruin of the ambitious
Monsieur Andre." It would appear, however, that the noble family never
had the honesty to return the hundred thousand crowns.
Amid events like these, which, humiliating though they be, partake
largely of the ludicrous, others occurred of a more serious nature.
Robberies in the streets were of daily occurrence, in consequence of
the immense sums, in paper, which people carried about with them.
Assassinations were also frequent. One case in particular fixed the
attention of the whole of France, not only on account of the enormity
of the offence, but of the rank and high connexions of the criminal.
The Count d'Horn, a younger brother of the Prince d'Horn, and
related to the noble families of D'Aremberg, De Ligne, and De
Montmorency, was a young man of dissipated character, extravagant to a
degree, and unprincipled as he was extravagant. In connexion with two
other young men as reckless as himself, named Mille, a Piedmontese
captain, and one Destampes, or Lestang, a Fleming, he formed a design
to rob a very rich broker, who was known, unfortunately for himself,
to carry great sums about his person. The Count pretended a desire to
purchase of him a number of shares in the Company of the Indies, and
for that purpose appointed to meet him in a cabaret, or low
public-house, in the neighbourhood of the Place Vendome. The
unsuspecting broker was punctual to his appointment; so were the Count
d'Horn and his two associates, whom he introduced as his particular
friends. After a few moments' conversation, the Count d'Horn suddenly
sprang upon his victim, and stabbed him three times in the breast with
a poniard. The man fell heavily to the ground, and, while the Count
was employed in rifling his portfolio of bonds in the Mississippi and
Indian schemes to the amount of one hundred thousand crowns, Mille,
the Piedmontese, stabbed the unfortunate broker again and again, to
make sure of his death. But the broker did not fall without a
struggle, and his cries brought the people of the cabaret to his
assistance. Lestang, the other assassin, who had been set to keep
watch at a staircase, sprang from a window and escaped; but Mille and
the Count d'Horn were seized in the very act.
This crime, committed in open day, and in so public a place as a
cabaret, filled Paris with consternation. The trial of the assassins
commenced on the following day, and the evidence being so clear, they
were both found guilty and condemned to be broken alive on the wheel.
The noble relatives of the Count d'Horn absolutely blocked up the
ante-chambers of the Regent, praying for mercy on the misguided youth,
and alleging that he was insane. The Regent avoided them as long as
possible, being determined that, in a case so atrocious, justice
should take its course; but the importunity of these influential
suitors was not to be overcome so silently, and they at last forced
themselves into the presence of the Regent, and prayed him to save
their house the shame of a public execution. They hinted that the
Princes d'Horn were allied to the illustrious family of Orleans, and
added that the Regent himself would be disgraced if a kinsman of his
should die by the hands of a common executioner. The Regent, to his
credit, was proof against all their solicitations, and replied to
their last argument in the words of Corneille,-
"Le crime fait la honte, et non pas l'echafaud:"
adding, that whatever shame there might be in the punishment he would
very willingly share with the other relatives. Day after day they
renewed their entreaties, but always with the same result. At last
they thought that if they could interest the Duke de St. Simon in
their layout, a man for whom the Regent felt sincere esteem, they
might succeed in their object. The Duke, a thorough aristocrat, was as
shocked as they were, that a noble assassin should die by the same
death as a plebeian felon, and represented to the Regent the impolicy
of making enemies of so numerous, wealthy, and powerful a family. He
urged, too, that in Germany, where the family of D'Aremberg had large
possessions, it was the law, that no relative of a person broken on
the wheel could succeed to any public office or employ until a whole
generation had passed away. For this reason he thought the punishment
of the guilty Count might be transmuted into beheading, which was
considered all over Europe as much less infamous. The Regent was moved
by this argument, and was about to consent, when Law, who felt
peculiarly interested in the fate of the murdered man, confirmed him
in his former resolution, to let the law take its course.
The relatives of D'Horn were now reduced to the last extremity.
The Prince de Robec Montmorency, despairing of other methods, found
means to penetrate into the dungeon of the criminal, and offering him
a cup of poison, implored him to save them from disgrace. The Count
d'Horn turned away his head, and refused to take it. Montmorency
pressed him once more, and losing all patience at his continued
refusal, turned on his heel, and exclaiming, "Die, then, as thou wilt,
mean-spirited wretch! thou art fit only to perish by the hands of the
hangman!" left him to his fate.
D'Horn himself petitioned the Regent that he might be beheaded,
but Law, who exercised more influence over his mind than any other
person, with the exception of the notorious Abbe Dubois, his tutor,
insisted that he could not in justice succumb to the self-interested
views of the D'Horns. The Regent had from the first been of the same
opinion, and within six days after the commission of their crime,
D'Horn and Mille were broken on the wheel in the Place de Greve. The
other assassin, Lestang, was never apprehended.
This prompt and severe justice was highly pleasing to the populace
of Paris; even M. de Quincampoix, as they called Law, came in for a
share of their approbation for having induced the Regent to show no
favour to a patrician. But the number of robberies and assassinations
did not diminish. No sympathy was shown for rich jobbers when they
were plundered: the general laxity of public morals, conspicuous
enough before, was rendered still more so by its rapid pervasion of
the middle classes, who had hitherto remained comparatively pure,
between the open vices of the class above and the hidden crimes of the
class below them. The pernicious love of gambling diffused itself
through society, and bore all public, and nearly all private, virtue
before it.
For a time, while confidence lasted, an impetus was given to
trade, which could not fail to be beneficial. In Paris, especially,
the good results were felt. Strangers flocked into the capital from
every part, bent, not only upon making money, but on spending it. The
Duchess of Orleans, mother of the Regent, computes the increase of the
population during this time, from the great influx of strangers from
all parts of the world, at 305,000 souls. The housekeepers were
obliged to make up beds in garrets, kitchens, and even stables, for
the accommodation of lodgers; and the town was so full of carriages
and vehicles of every description, that they were obliged in the
principal streets to drive at a foot-pace for fear of accidents. The
looms of the country worked with unusual activity, to supply rich
laces, silks, broad-cloth, and velvets, which being paid for in
abundant paper, increased in price four-fold. Provisions shared the
general advance; bread, meat, and vegetables were sold at prices
greater than had ever before been known; while the wages of labour
rose in exactly the same proportion. The artisan, who formerly gained
fifteen sous per diem, now gained sixty. New houses were built in
every direction; an illusory prosperity shone over the land, and so
dazzled the eyes of the whole nation that none could see the dark
cloud on the horizon, announcing the storm that was too rapidly
approaching.
Law himself, the magician whose wand had wrought so surprising a
change, shared, of course, in the general prosperity. His wife and
daughter were courted by the highest nobility, and their alliance
sought by the heirs of ducal and princely houses. He bought two
splendid estates in different parts of France, and entered into a
negotiation with the family of the Duke de Sully for the purchase of
the Marquisate of Rosny. His religion being an obstacle to his
advancement, the Regent promised, if he would publicly conform to the
Catholic faith, to make him comptroller-general of the finances. Law,
who had no more real religion than any other professed gambler,
readily agreed, and was confirmed by the Abbe de Tencin in the
cathedral of Melun, in presence of a great crowd of spectators.
[The following squib was circulated on the occasion :--
"Foin de ton zele seraphique,
Malheureux Abbe de Tencin,
Depuis que Law est Catholique,
Tout le royaume est Capucin
Thus, somewhat weakly and paraphrastically rendered by Justansond, in
his translation of the "Memoirs of Louis XV:"--
"Tencin, a curse on thy seraphic zeal,
Which by persuasion hath contrived the means
To make the Scotchman at our altars kneel,
Since which we all are poor as Capucines?]
On the following day he was elected honorary churchwarden of the
parish of St. Roch, upon which occasion he made it a present of the
sum of five hundred thousand livres. His charities, always
magnificent, were not always so ostentatious. He gave away great sums
privately, and no tale of real distress ever reached his ears in vain.
At this time, he was by far the most influential person of the
state. The Duke of Orleans had so much confidence in his sagacity, and
the success of his plans, that he always consulted him upon every
matter of moment. He was by no means unduly elevated by his
prosperity, but remained the same simple, affable, sensible man that
he had shown himself in adversity. His gallantry, which was always
delightful to the fair objects of it, was of a nature, so kind, so
gentlemanly, and so respectful, that not even a lover could have taken
offence at it. If upon any occasion he showed any symptoms of
haughtiness, it was to the cringing nobles, who lavished their
adulation upon him till it became fulsome. He often took pleasure in
seeing how long he could make them dance attendance upon him for a
single favour. To such of his own countrymen as by chance visited
Paris, and sought an interview with him, he was, on the contrary, all
politeness and attention. When Archibald Campbell, Earl of Islay, and
afterwards Duke of Argyle, called upon him in the Place Vendome, he
had to pass through an ante-chamber crowded with persons of the first
distinction, all anxious to see the great financier, and have their
names put down as first on the list of some new subscription. Law
himself was quietly sitting in his library, writing a letter to the
gardener at his paternal estate of Lauriston about the planting of
some cabbages! The Earl stayed for a considerable time, played a game
of piquet with his countryman, and left him, charmed with his ease,
good sense, and good breeding.
Among the nobles who, by means of the public credulity at this
time, gained sums sufficient to repair their ruined fortunes, may be
mentioned the names of the Dukes de Bourbon, de Guiche, de la
Force [The Duke de la Force gained considerable sums, not only by
jobbing in the stocks, but in dealing in porcelain, spices, &c. It was
debated for a length of time in the Parliament of Paris whether he had
not, in his quality of spice-merchant, forfeited his rank in the
peerage. It was decided in the negative. A caricature of him was made,
dressed as a street porter, carrying a large bale of spices on his
back, with the inscription, "Admirez La Force."], de Chaulnes, and
d'Antin; the Marechal d'Estrees, the Princes de Rohan, de Poix, and de
Leon. The Duke de Bourbon, son of Louis XIV by Madame de Montespan,
was peculiarly fortunate in his speculations in Mississippi paper.
He rebuilt the royal residence of Chantilly in a style of unwonted
magnificence, and, being passionately fond of horses, he erected a
range of stables, which were long renowned throughout Europe, and
imported a hundred and fifty of the finest racers from England, to
improve the breed in France. He bought a large extent of country in
Picardy, and became possessed of nearly all the valuable lands lying
between the Oise and the Somme.
When fortunes such as these were gained, it is no wonder that Law
should have been almost worshipped by the mercurial population. Never
was monarch more flattered than he was. All the small poets and
litterateurs of the day poured floods of adulation upon him. According
to them he was the saviour of the country, the tutelary divinity of
France; wit was in all his words, goodness in all his looks, and
wisdom in all his actions. So great a crowd followed his carriage
whenever he went abroad, that the Regent sent him a troop of horse as
his permanent escort, to clear the streets before him.
It was remarked at this time, that Paris had never before been so
full of objects of elegance and luxury. Statues, pictures, and
tapestries were imported in great quantities from foreign countries,
and found a ready market. All those pretty trifles in the way of
furniture and ornament which the French excel in manufacturing, were
no longer the exclusive play-things of the aristocracy, but were to be
found in abundance in the houses of traders and the middle classes in
general. Jewellery of the most costly description was brought to Paris
as the most favourable mart. Among the rest, the famous diamond,
bought by the Regent, and called by his name, and which long adorned
the crown of France. It was purchased for the sum of two millions of
livres, under circumstances which show that the Regent was not so
great a gainer as some of his subjects, by the impetus which trade had
received. When the diamond was first offered to him, he refused to buy
it, although he desired, above all things, to possess it, alleging as
his reason, that his duty to the country he governed would not allow
him to spend so large a sum of the public money for a mere jewel. This
valid and honourable excuse threw all the ladies of the court into
alarm, and nothing was heard for some days but expressions of regret,
that so rare a gem should be allowed to go out of France; no private
individual being rich enough to buy it. The Regent was continually
importuned about it; but all in vain, until the Duke de St. Simon,
who, with all his ability, was something of a twaddler, undertook the
weighty business. His entreaties, being seconded by Law, the
good-natured Regent gave his consent, leaving to Law's ingenuity to
find the means to pay for it. The owner took security for the payment
of the sum of two millions of livres within a stated period,
receiving, in the mean time, the interest of five per cent. upon that
amount, and being allowed, besides, all the valuable clippings of the
gem. St. Simon, in his Memoirs, relates, with no little complacency,
his share in this transaction. After describing the diamond to be as
large as a greengage, of a form nearly round, perfectly white, and
without flaw, and weighing more than five hundred grains, he concludes
with a chuckle, by telling the world, "that he takes great credit to
himself for having induced the Regent to make so illustrious a
purchase." In other words, he was proud that he had induced him to
sacrifice his duty, and buy a bauble for himself, at an extravagant
price, out of the public money.
Thus the system continued to flourish till the commencement of the
year 1720. The warnings of the Parliament, that too great a creation
of paper money would, sooner or later, bring the country to
bankruptcy, were disregarded. The Regent, who knew nothing whatever of
the philosophy of finance, thought that a system which had produced
such good effects could never be carried to excess. If five hundred
millions of paper had been of such advantage, five hundred millions
additional would be of still greater advantage. This was the grand
error of the Regent, and which Law did not attempt to dispel. The
extraordinary avidity of the people kept up the delusion; and the
higher the price of Indian and Mississippi stock, the more billets de
banque were issued to keep pace with it. The edifice thus reared might
not unaptly be compared to the gorgeous palace erected by Potemkin,
that princely barbarian of Russia, to surprise and please his imperial
mistress: huge blocks of ice were piled one upon another; ionic
pillars, of chastest workmanship, in ice, formed a noble portico; and
a dome, of the same material, shone in the sun, which had just
strength enough to gild, but not to melt it. It glittered afar, like a
palace of crystals and diamonds; but there came one warm breeze from
the south, and the stately building dissolved away, till none were
able even to gather up the fragments. So with Law and his paper
system. No sooner did the breath of popular mistrust blow steadily
upon it, than it fell to ruins, and none could raise it up again.
The first slight alarm that was occasioned was early in 1720. The
Prince de Conti, offended that Law should have denied him fresh shares
in India stock, at his own price, sent to his bank to demand payment
in specie of so enormous a quantity of notes, that three waggons were
required for its transport. Law complained to the Regent, and urged on
his attention the mischief that would be done, if such an example
found many imitators. The Regent was but too well aware of it, and,
sending for the Prince de Conti, ordered him, under penalty of his
high displeasure, to refund to the Bank two-thirds of the specie which
he had withdrawn from it. The Prince was forced to obey the despotic
mandate. Happily for Law's credit, De Conti was an unpopular man:
everybody condemned his meanness and cupidity, and agreed that Law had
been hardly treated. It is strange, however, that so narrow an escape
should not have made both Law and the Regent more anxious to restrict
their issues. Others were soon found who imitated, from motives of
distrust, the example which had been set by De Conti in revenge. The
more acute stockjobbers imagined justly that prices could not continue
to rise for ever. Bourdon and La Richardiere, renowned for their
extensive operations in the funds, quietly and in small quantities at
a time, converted their notes into specie, and sent it away to foreign
countries. They also bought as much as they could conveniently carry
of plate and expensive jewellery, and sent it secretly away to England
or to Holland. Vermalet, a jobber, who sniffed the coming storm,
procured gold and silver coin to the amount of nearly a million of
livres, which he packed in a farmer's cart, and covered over with hay
and cow-dung. He then disguised himself in the dirty smock-frock, or
blouse, of a peasant, and drove his precious load in safety into
Belgium. From thence he soon found means to transport it to Amsterdam.
Hitherto no difficulty had been experienced by any class in
procuring specie for their wants. But this system could not long be
carried on without causing a scarcity. The voice of complaint was
heard on every side, and inquiries being instituted, the cause was
soon discovered. The council debated long on the remedies to be taken,
and Law, being called on for his advice, was of opinion, that an edict
should be published, depreciating the value of coin five per cent.
below that of paper. The edict was published accordingly; but, failing
of its intended effect, was followed by another, in which the
depreciation was increased to ten per cent. The payments of the bank
were at the same time restricted to one hundred livres in gold, and
ten in silver. All these measures were nugatory to restore confidence
in the paper, though the restriction of cash payments within limits so
extremely narrow kept up the credit of the Bank.
Notwithstanding every effort to the contrary, the precious metals
continued to be conveyed to England and Holland. The little coin that
was left in the country was carefully treasured, or hidden until the
scarcity became so great, that the operations of trade could no longer
be carried on. In this emergency, Law hazarded the bold experiment of
forbidding the use of specie altogether. In February 1720 an edict was
published, which, instead of restoring the credit of the paper, as was
intended, destroyed it irrecoverably, and drove the country to the
very brink of revolution. By this famous edict it was forbidden to any
person whatever to have more than five hundred livres (20 pounds
sterling) of coin in his possession, under pain of a heavy fine, and
confiscation of the sums found. It was also forbidden to buy up
jewellery, plate, and precious stones, and informers were encouraged
to make search for offenders, by the promise of one-half the amount
they might discover. The whole country sent up a cry of distress at
this unheard-of tyranny. The most odious persecution daily took place.
The privacy of families was violated by the intrusion of informers and
their agents. The most virtuous and honest were denounced for the
crime of having been seen with a louis d'or in their possession.
Servants betrayed their masters, one citizen became a spy upon his
neighbour, and arrests and confiscations so multiplied, that the
courts found a difficulty in getting through the immense increase of
business thus occasioned. It was sufficient for an informer to say
that he suspected any person of concealing money in his house, and
immediately a search-warrant was granted. Lord Stair, the English
ambassador, said, that it was now impossible to doubt of the sincerity
of Law's conversion to the Catholic religion; he had established the
inquisition, after having given abundant evidence of his faith in
transubstantiation, by turning so much gold into paper.
Every epithet that popular hatred could suggest was showered upon
the Regent and the unhappy Law. Coin, to any amount above five hundred
livres, was an illegal tender, and nobody would take paper if he could
help it. No one knew to-day what his notes would be worth to-morrow.
"Never," says Duclos, in his Secret Memoirs of the Regency, "was seen
a more capricious government-never was a more frantic tyranny
exercised by hands less firm. It is inconceivable to those who were
witnesses of the horrors of those times, and who look back upon them
now as on a dream, that a sudden revolution did not break out--that
Law and the Regent did not perish by a tragical death. They were both
held in horror, but the people confined themselves to complaints; a
sombre and timid despair, a stupid consternation, had seized upon all,
and men's minds were too vile even to be capable of a courageous
crime." It would appear that, at one time, a movement of the people
was organised. Seditious writings were posted up against the walls,
and were sent, in hand-bills, to the houses of the most conspicuous
people. One of them, given in the "Memoires de la Regence," was to
the following effect :--" Sir and Madam,--This is to give you notice
that a St. Bartholomew's Day will be enacted again on Saturday and
Sunday, if affairs do not alter. You are desired not to stir out, nor
you, nor your servants. God preserve you from the flames! Give notice
to your neighbours. Dated Saturday, May 25th, 1720." The immense
number of spies with which the city was infested rendered the people
mistrustful of one another, and beyond some trifling disturbances made
in the evening by an insignificant group, which was soon dispersed,
the peace of the capital was not compromised.
The value of shares in the Louisiana, or Mississippi stock, had
fallen very rapidly, and few indeed were found to believe the tales
that had once been told of the immense wealth of that region. A last
effort was therefore tried to restore the public confidence in the
Mississippi project. For this purpose, a general conscription of all
the poor wretches in Paris was made by order of government. Upwards of
six thousand of the very refuse of the population were impressed, as
if in time of war, and were provided with clothes and tools to be
embarked for New Orleans, to work in the gold mines alleged to abound
there. They were paraded day after day through the streets with their
pikes and shovels, and then sent off in small detachments to the
out-ports to be shipped for America. Two-thirds of them never reached
their destination, but dispersed themselves over the country, sold
their tools for what they could get, and returned to their old course
of life. In less than three weeks afterwards, one-half of them were to
be found again in Paris. The manoeuvre, however, caused a trifling
advance in Mississippi stock. Many persons of superabundant
gullibility believed that operations had begun in earnest in the new
Golconda, and that gold and silver ingots would again be found in
France.
In a constitutional monarchy some surer means would have been
found for the restoration of public credit. In England, at a
subsequent period, when a similar delusion had brought on similar
distress, how different were the measures taken to repair the evil;
but in France, unfortunately, the remedy was left to the authors of
the mischief. The arbitrary will of the Regent, which endeavoured to
extricate the country, only plunged it deeper into the mire. All
payments were ordered to be made in paper, and between the 1st of
February and the end of May, notes were fabricated to the amount of
upwards of 1500 millions of livres, or 60,000,000 pounds sterling. But
the alarm once sounded, no art could make the people feel the
slightest confidence in paper which was not exchangeable into metal.
M. Lambert, the President of the Parliament of Paris, told the Regent
to his face that he would rather have a hundred thousand livres in
gold or silver than five millions in the notes of his bank. When such
was the general feeling, the superabundant issues of paper but
increased the evil, by rendering still more enormous the disparity
between the amount of specie and notes in circulation. Coin, which it
was the object of the Regent to depreciate, rose in value on every
fresh attempt to diminish it. In February, it was judged advisable
that the Royal Bank should be incorporated with the Company of the
Indies. An edict to that effect was published and registered by the
Parliament. The state remained the guarantee for the notes of the
bank, and no more were to be issued without an order in council. All
the profits of the bank, since the time it had been taken out of Law's
hands and made a national institution, were given over by the Regent
to the Company of the Indies. This measure had the effect of raising
for a short time the value of the Louisiana and other shares of the
company, but it failed in placing public credit on any permanent
basis.
A council of state was held in the beginning of May, at which Law,
D'Argenson (his colleague in the administration of the finances), and
all the ministers were present. It was then computed that the total
amount of notes in circulation was 2600 millions of livres, while the
coin in the country was not quite equal to half that amount. It was
evident to the majority of the council that some plan must be adopted
to equalise the currency. Some proposed that the notes should be
reduced to the value of the specie, while others proposed that the
nominal value of the specie should be raised till it was on an
equality with the paper. Law is said to have opposed both these
projects, but failing in suggesting any other, it was agreed that the
notes should be depreciated one-half. On the 21st of May, an edict was
accordingly issued, by which it was decreed that the shares of the
Company of the Indies, and the notes of the bank, should gradually
diminish in value, till at the end of a year they should only pass
current for one half of their nominal worth. The Parliament refused to
register the edict--the greatest outcry was excited, and the state of
the country became so alarming, that, as the only means of preserving
tranquillity, the council of the regency was obliged to stultify its
own proceedings, by publishing within seven days another edict,
restoring the notes to their original value.
On the same day (the 27th of May) the bank stopped payment in
specie. Law and D'Argenson were both dismissed from the ministry. The
weak, vacillating, and cowardly Regent threw the blame of all the
mischief upon Law, who, upon presenting himself at the Palais Royal,
was refused admitance. At nightfall, however, he was sent for, and
admitted into the palace by a secret door,[Duclos, Memoires Secrets de
la Regence.] when the Regent endeavoured to console him, and made all
manner of excuses for the severity with which in public he had been
compelled to treat him. So capricious was his conduct, that, two days
afterwards, he took him publicly to the opera, where he sat in the
royal box, alongside of the Regent, who treated him with marked
consideration in face of all the people. But such was the hatred
against Law that the experiment had well nigh proved fatal to him. The
mob assailed his carriage with stones just as he was entering his own
door; and if the coachman had not made a sudden jerk into the
court-yard, and the domestics closed the gate immediately, he would,
in all probability, have been dragged out and torn to pieces. On the
following day, his wife and daughter were also assailed by the mob as
they were returning in their carriage from the races. When the Regent
was informed of these occurrences he sent Law a strong detachment of
Swiss guards, who were stationed night and day in the court of his
residence. The public indignation at last increased so much, that Law,
finding his own house, even with this guard, insecure, took refuge in
the Palais Royal, in the apartments of the Regent.
The Chancellor, D'Aguesseau, who had been dismissed in 1718 for
his opposition to the projects of Law, was now recalled to aid in the
restoration of credit. The Regent acknowledged too late, that he had
treated with unjustifiable harshness and mistrust one of the ablest,
and perhaps the sole honest public man of that corrupt period. He had
retired ever since his disgrace to his country-house at Fresnes,
where, in the midst of severe but delightful philosophic studies, he
had forgotten the intrigues of an unworthy court. Law himself, and the
Chevalier de Conflans, a gentleman of the Regent's household, were
despatched in a post-chaise, with orders to bring the ex-chancellor to
Paris along with them. D'Aguesseau consented to render what assistance
he could, contrary to the advice of his friends, who did not approve
that he should accept any recall to office of which Law was the
bearer. On his arrival in Paris, five counsellors of the Parliament
were admitted to confer with the Commissary of Finance, and on the 1st
of June an order was published, abolishing the law which made it
criminal to amass coin to the amount of more than five hundred livres.
Every one was permitted to have as much specie as he pleased. In order
that the bank-notes might be withdrawn, twenty-five millions of new
notes were created, on the security of the revenues of the city of
Paris, at two-and-a-half per cent. The bank-notes withdrawn were
publicly burned in front of the Hotel de Ville. The new notes were
principally of the value of ten livres each; and on the 10th of June
the bank was re-opened, with a sufficiency of silver coin to give in
change for them.
These measures were productive of considerable advantage. All the
population of Paris hastened to the bank, to get coin for their small
notes; and silver becoming scarce, they were paid in copper. Very few
complained that this was too heavy, although poor fellows might be
continually seen toiling and sweating along the streets, laden with
more than they could comfortably carry, in the shape of change for
fifty livres. The crowds around the bank were so great, that hardly a
day passed that some one was not pressed to death. On the 9th of
July, the multitude was so dense and clamorous that the guards
stationed at the entrance of the Mazarin Gardens closed the gate, and
refused to admit any more. The crowd became incensed, and flung stones
through the railings upon the soldiers. The latter, incensed in their
turn, threatened to fire upon the people. At that instant one of them
was hit by a stone, and, taking up his piece, he fired into the crowd.
One man fell dead immediately, and another was severely wounded. It
was every instant expected that a general attack would have been
commenced upon the bank; but the gates of the Mazarin Gardens being
opened to the crowd, who saw a whole troop of soldiers, with their
bayonets fixed, ready to receive them, they contented themselves by
giving vent to their indignation in groans and hisses.
Eight days afterwards the concourse of people was so tremendous,
that fifteen persons were squeezed to death at the doors of the bank.
The people were so indignant that they took three of the bodies on
stretchers before them, and proceeded, to the number of seven or eight
thousand, to the gardens of the Palais Royal, that they might show the
Regent the misfortunes that he and Law had brought upon the country.
Law's coachman, who was sitting on the box of his master's carriage,
in the court-yard of the palace, happened to have more zeal than
discretion, and, not liking that the mob should abuse his master, he
said, loud enough to be overheard by several persons, that they were
all blackguards, and deserved to be hanged. The mob immediately set
upon him, and, thinking that Law was in the carriage, broke it to
pieces. The imprudent coachman narrowly escaped with his life. No
further mischief was done; a body of troops making their appearance,
the crowd quietly dispersed, after an assurance had been given by the
Regent that the three bodies they had brought to show him should be
decently buried at his own expense. The Parliament was sitting at the
time of this uproar, and the President took upon himself to go out and
see what was the matter. On his return he informed the councillors,
that Law's carriage had been broken by the mob. All the members rose
simultaneously, and expressed their joy by a loud shout, while one
man, more zealous in his hatred than the rest, exclaimed, "And Law
himself, is he torn to pieces?"
[The Duchess of Orleans gives a different version of this story; but
whichever be the true one, the manifestation of such feeling in a
legislative assembly was not very creditable. She says, that the
President was so transported with joy, that he was seized with a
rhyming fit, and, returning into the hall, exclaimed to the members:--
"Messieurs ! Messieurs ! bonne nouvelle !
Le carfosse de Lass est reduit en canelle !"]
Much undoubtedly depended on the credit of the Company of the
Indies, which was answerable for so great a sum to the nation. It was,
therefore, suggested in the council of the ministry, that any
privileges which could be granted to enable it to fulfil its
engagements, would be productive of the best results. With this end in
view, it was proposed that the exclusive privilege of all maritime
commerce should be secured to it, and an edict to that effect was
published. But it was unfortunately forgotten that by such a measure
all the merchants of the country would be ruined. The idea of such an
immense privilege was generally scouted by the nation, and petition on
petition was presented to the Parliament, that they would refuse to
register the decree. They refused accordingly, and the Regent,
remarking that they did nothing but fan the flame of sedition, exiled
them to Blois. At the intercession of D'Aguesseau, the place of
banishment was changed to Pontoise, and thither accordingly the
councillors repaired, determined to set the Regent at defiance. They
made every arrangement for rendering their temporary exile as
agreeable as possible. The President gave the most elegant suppers, to
which he invited all the gayest and wittiest company of Paris. Every
night there was a concert and ball for the ladies. The usually grave
and solemn judges and councillors joined in cards and other
diversions, leading for several weeks a life of the most extravagant
pleasure, for no other purpose than to show the Regent of how little
consequence they deemed their banishment, and that when they willed
it, they could make Pontoise a pleasanter residence than Paris.
Of all the nations in the world the French are the most renowned
for singing over their grievances. Of that country it has been
remarked with some truth, that its whole history may be traced in its
songs. When Law, by the utter failure of his best-laid plans, rendered
himself obnoxious, satire of course seized hold upon him, and, while
caricatures of his person appeared in all the shops, the streets
resounded with songs, in which neither he nor the Regent was spared.
Many of these songs were far from decent; and one of them in
particular counselled the application of all his notes to the most
ignoble use to which paper can be applied. But the following,
preserved in the letters of the Duchess of Orleans, was the best and
the most popular, and was to be heard for months in all the carrefours
of Paris. The application of the chorus is happy enough :--
Aussitot que Lass arriva
Dans notre bonne ville,
Monsieur le Regent publia
Que Lass serait utile
Pour retablir la nation.
La faridondaine! la faridondon.
Mais il nous a tous enrich!,
Biribi!
A la facon de Barbari,
Mort ami!
Ce parpaillot, pour attirer
Tout l'argent de la France,
Songea d'abord a s'assurer
De notre confiance.
Il fit son abjuration.
La faridondaine! la faridondon!
Mais le fourbe s'est converti,
Biribi!
A la facon de Barbari,
Mon ami!
Lass, le fils aine de Satan
Nous met tous a l'aumone,
Il nous a pris tout notre argent
Et n'en rend a personne.
Mais le Regent, humain et bon,
La faridondaine! la faridondon!
Nous rendra ce qu'on nous a pris,
Biribi!
A la facon de Barbari,
Mon ami!
The following smart epigram is of the same date:--
Lundi, j'achetai des actions;
Mardi, je gagnai des millions;
Mercredi, j'arrangeai mon menage,
Jeudi, je pris un equipage,
Vendredi, je m'en fus au bal,
Et Samedi, a l'Hopital.
Among the caricatures that were abundantly published, and that
showed as plainly as graver matters, that the nation had awakened to a
sense of its folly, was one, a fac-simile of which is preserved in the
"Memoires de la Regence." It was thus described by its author: "The
'Goddess of Shares,' in her triumphal car, driven by the Goddess of
Folly. Those who are drawing the car are impersonations of the
Mississippi, with his wooden leg, the South Sea, the Bank of England,
the Company of the West of Senegal, and of various assurances. Lest
the car should not roll fast enough, the agents of these companies,
known by their long fox-tails and their cunning looks, turn round the
spokes of the wheels, upon which are marked the names of the several
stocks, and their value, sometimes high and sometimes low, according
to the turns of the wheel. Upon the ground are the merchandise,
day-books and ledgers of legitimate commerce, crushed under the
chariot of Folly. Behind is an immense crowd of persons, of all ages,
sexes, and conditions, clamoring after Fortune, and fighting with each
other to get a portion of the shares which she distributes so
bountifully among them. In the clouds sits a demon, blowing bubbles of
soap, which are also the objects of the admiration and cupidity of the
crowd, who jump upon one another's backs to reach them ere they burst.
Right in the pathway of the car, and blocking up the passage, stands a
large building, with three doors, through one of which it must pass,
if it proceeds further, and all the crowd along with it. Over the
first door are the words, "Hopital des Foux," over the second,
"Hopital des Malades," and over the third, "Hopital des Gueux."
Another caricature represented Law sitting in a large cauldron,
boiling over the flames of popular madness, surrounded by an impetuous
multitude, who were pouring all their gold and silver into it, and
receiving gladly in exchange the bits of paper which he distributed
among them by handsfull.
While this excitement lasted, Law took good care not to expose
himself unguarded in the streets. Shut up in the apartments of the
Regent, he was secure from all attack, and, whenever he ventured
abroad, it was either incognito, or in one of the Royal carriages,
with a powerful escort. An amusing anecdote is recorded of the
detestation in which he was held by the people, and the ill treatment
he would have met, had he fallen into their hands. A gentleman, of the
name of Boursel, was passing in his carriage down the Rue St. Antoine,
when his further progress was stayed by a hackneycoach that had
blocked up the road. M. Boursel's servant called impatiently to the
hackneycoachman to get out of the way, and, on his refusal, struck him
a blow on the face. A crowd was soon drawn together by the
disturbance, and M. Boursel got out of the carriage to restore order.
The hackney-coachman, imagining that he had now another assailant,
bethought him of an expedient to rid himself of both, and called out
as loudly as he was able, "Help! help! murder! murder! Here are Law
and his servant going to kill me! Help! help!" At this cry, the people
came out of their shops, armed with sticks and other weapons, while
the mob gathered stones to inflict summary vengeance upon the supposed
financier. Happily for M. Boursel and his servant, the door of the
church of the Jesuits stood wide open, and, seeing the fearful odds
against them, they rushed towards it with all speed. They reached the
altar, pursued by the people, and would have been ill treated even
there, if, finding the door open leading to the sacristy, they had not
sprang through, and closed it after them. The mob were then persuaded
to leave the church by the alarmed and indignant priests; and, finding
M. Boursel's carriage still in the streets, they vented their ill-will
against it, and did it considerable damage.
The twenty-five millions secured on the municipal revenues of the
city of Paris, bearing so low an interest as two and a half per cent.,
were not very popular among the large holders of Mississippi stock.
The conversion of the securities was, therefore, a work of
considerable difficulty; for many preferred to retain the falling
paper of Law's Company, in the hope that a favourable turn might take
place. On the 15th of August, with a view to hasten the conversion, an
edict was passed, declaring that all notes for sums between one
thousand and ten thousand livres; should not pass current, except for
the purchase of annuities and bank accounts, or for the payment of
instalments still due on the shares of the company.
In October following another edict was passed, depriving these
notes of all value whatever after the month of November next ensuing.
The management of the mint, the farming of the revenue, and all the
other advantages and privileges of the India, or Mississippi Company,
were taken from them, and they were reduced to a mere private company.
This was the deathblow to the whole system, which had now got into the
hands of its enemies. Law had lost all influence in the Council of
Finance, and the company, being despoiled of its immunities, could no
longer hold out the shadow of a prospect of being able to fulfil its
engagements. All those suspected of illegal profits at the time the
public delusion was at its height, were sought out and amerced in
heavy fines. It was previously ordered that a list of the original
proprietors should be made out, and that such persons as still
retained their shares should place them in deposit with the company,
and that those who had neglected to complete the shares for which they
had put down their names, should now purchase them of the company, at
the rate of 13,500 livres for each share of 500 livres. Rather than
submit to pay this enormous sum for stock which was actually at a
discount, the shareholders packed up all their portable effects, and
endeavoured to find a refuge in foreign countries. Orders were
immediately issued to the authorities at the ports and frontiers, to
apprehend all travellers who sought to leave the kingdom, and keep
them in custody, until it was ascertained whether they had any plate
or jewellery with them, or were concerned in the late stock-jobbing.
Against such few as escaped, the punishment of death was recorded,
while the most arbitrary proceedings were instituted against those who
remained.
Law himself, in a moment of despair, determined to leave a country
where his life was no longer secure. He at first only demanded
permission to retire from Paris to one of his country-seats; a
permission which the Regent cheerfully granted. The latter was much
affected at the unhappy turn affairs had taken, but his faith
continued unmoved in the truth and efficacy of Law's financial system.
His eyes were opened to his own errors, and during the few remaining
years of his life, he constantly longed for an opportunity of again
establishing the system upon a securer basis. At Law's last interview
with the Prince, he is reported to have said--"I confess that I have
committed many faults; I committed them because I am a man, and all
men are liable to error; but I declare to you most solemnly that none
of them proceeded from wicked or dishonest motives, and that nothing
of the kind will be found in the whole course of my conduct."
Two or three days after his departure the Regent sent him a very
kind letter, permitting him to leave the kingdom whenever he pleased,
and stating that he had ordered his passports to be made ready. He at
the same time offered him any sum of money he might require. Law
respectfully declined the money, and set out for Brussels in a
postchaise belonging to Madame de Prie, the mistress of the Duke of
Bourbon, escorted by six horse-guards. From thence he proceeded to
Venice, where he remained for some months, the object of the greatest
curiosity to the people, who believed him to be the possessor of
enormous wealth. No opinion, however, could be more erroneous. With
more generosity than could have been expected from a man who during
the greatest part of his life had been a professed gambler, he had
refused to enrich himself at the expense of a ruined nation. During
the height of the popular frenzy for Mississippi stock, he had never
doubted of the final success of his projects, in making France the
richest and most powerful nation of Europe. He invested all his gains
in the purchase of landed property in France - a sure proof of his own
belief in the stability of his schemes. He had hoarded no plate or
jewellery, and sent no money, like the dishonest jobbers, to foreign
countries. His all, with the exception of one diamond, worth about
five or six thousand pounds sterling, was invested in the French soil;
and when he left that country, he left it almost a beggar. This fact
alone ought to rescue his memory from the charge of knavery, so often
and so unjustly brought against him.
As soon as his departure was known, all his estates and his
valuable library were confiscated. Among the rest, an annuity of
200,000 livres, (8000 pounds sterling,) on the lives of his wife and
children, which had been purchased for five millions of livres, was
forfeited, notwithstanding that a special edict, drawn up for the
purpose in the days of his prosperity, had expressly declared that it
should never be confiscated for any cause whatever. Great discontent
existed among the people that Law had been suffered to escape. The mob
and the Parliament would have been pleased to have seen him hanged.
The few who had not suffered by the commercial revolution, rejoiced
that the quack had left the country; but all those (and they were by
far the most numerous class) whose fortunes were implicated, regretted
that his intimate knowledge of the distress of the country, and of the
causes that had led to it, had not been rendered more available in
discovering a remedy.
At a meeting of the Council of Finance, and the general council of
the Regency, documents were laid upon the table, from which it
appeared that the amount of notes in circulation was 2700 millions.
The Regent was called upon to explain how it happened that there was a
discrepancy between the dates at which these issues were made, and
those of the edicts by which they were authorised. He might have
safely taken the whole blame upon himself, but he preferred that an
absent man should bear a share of it, and he therefore stated that
Law, upon his own authority, had issued 1200 millions of notes at
different times, and that he (the Regent) seeing that the thing had
been irrevocably done, had screened Law, by antedating the decrees of
the council, which authorised the augmentation. It would have been
more to his credit if he had told the whole truth while he was about
it, and acknowledged that it was mainly through his extravagance and
impatience that Law had been induced to overstep the bounds of safe
speculation. It was also ascertained that the national debt, on the
1st of January, 1721, amounted to upwards of $100 millions of livres,
or more than 124,000,000 pounds sterling, the interest upon which was
3,196,000 pounds. A commission, or visa, was forthwith appointed to
examine into all the securities of the state creditors, who were to be
divided into five classes, the first four comprising those who had
purchased their securities with real effects, and the latter
comprising those who could give no proofs that the transactions they
had entered into were real and bona fide. The securities of the latter
were ordered to be destroyed, while those of the first four classes
were subjected to a most rigid and jealous scrutiny. The result of the
labours of the visa was a report, in which they counselled the
reduction of the interest upon these securities to fifty-six millions
of livres. They justified this advice by a statement of the various
acts of peculation and extortion which they had discovered, and an
edict to that effect was accordingly published and duly registered by
the parliaments of the kingdom.
Another tribunal was afterwards established, under the title of
the Chambre de l'Arsenal, which took cognizance of all the
malversations committed in the financial departments of the government
during the late unhappy period. A Master of Requests, named Falhonet,
together with the Abbe Clement, and two clerks in their employ, had
been concerned in divers acts of peculation, to the amount of upwards
of a million of livres. The first two were sentenced to be beheaded,
and the latter to be hanged; but their punishment was afterwards
commuted into imprisonment for life in the Bastile. Numerous other
acts of dishonesty were discovered, and punished by fine and
imprisonment.
D'Argenson shared with Law and the Regent the unpopularity which
had alighted upon all those concerned in the Mississippi madness. He
was dismissed from his post of Chancellor, to make room for
D'Aguesseau; but he retained the title of Keeper of the Seals, and was
allowed to attend the councils whenever he pleased. He thought it
better, however, to withdraw from Paris, and live for a time a life of
seclusion at his country-seat. But he was not formed for retirement,
and becoming moody and discontented, he aggravated a disease under
which he had long laboured, and died in less than a twelvemonth. The
populace of of Paris so detested him, that they carried their hatred
even to his grave. As his funeral procession passed to the church of
St. Nicholas du Chardonneret, the burying-place of his family, it was
beset by a riotous mob, and his two sons, who were following as
chief-mourners, were obliged to drive as fast as they were able down a
by-street to escape personal violence.
As regards Law, he for some time entertained a hope that he should
be recalled to France, to aid in establishing its credit upon a firmer
basis. The death of the Regent, in 1723, who expired suddenly, as he
was sitting by the fireside conversing with his mistress, the Duchess
de Phalaris, deprived him of that hope, and he was reduced to lead his
former life of gambling. He was more than once obliged to pawn his
diamond, the sole remnant of his vast wealth, but successful play
generally enabled him to redeem it. Being persecuted by his creditors
at Rome, he proceeded to Copenhagen, where he received permission from
the English ministry to reside in his native country, his pardon for
the murder of Mr. Wilson having been sent over to him in 1719. He was
brought over in the admiral's ship, a circumstance which gave occasion
for a short debate in the House of Lords. Earl Coningsby complained
that a man, who had renounced both his country and his religion,
should have been treated with such honour, and expressed his belief
that his presence in England, at a time when the people were so
bewildered by the nefarious practices of the South Sea directors,
would be attended with no little danger. He gave notice of a motion on
the subject; but it was allowed to drop, no other member of the House
having the slightest participation in his lordship's fears. Law
remained for about four years in England, and then proceeded to
Venice, where he died in 1729, in very embarrassed circumstances. The
following epitaph was written at the time :--
"Ci git cet Ecossais celebre,
Ce calculateur sans egal,
Qui, par les regles de l'algebre,
A mis la France a l'Hopital."
His brother, William Law, who had been concerned with him in the
administration both of the Bank and the Louisiana Company, was
imprisoned in the Bastile for alleged malversation, but no guilt was
ever proved against him. He was liberated after fifteen months, and
became the founder of a family, which is still known in France under
the title of Marquises of Lauriston.
In the next chapter will be found an account of the madness which
infected the people of England at the same time, and under very
similar circumstances, but which, thanks to the energies and good
sense of a constitutional government, was attended with results far
less disastrous than those which were seen in France.
THE SOUTH SEA BUBBLE
At length corruption, like a general flood,
Did deluge all, and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre's sordid charms.
--Pope.
The South Sea Company was originated by the celebrated Harley,
Earl of Oxford, in the year 1711, with the view of restoring public
credit, which had suffered by the dismissal of the Whig ministry, and
of providing for the discharge of the army and navy debentures, and
other parts of the floating debt, amounting to nearly ten millions
sterling. A company of merchants, at that time without a name, took
this debt upon themselves, and the government agreed to secure them,
for a certain period, the interest of six per cent. To provide for
this interest, amounting to 600,000 pounds per annum, the duties upon
wines, vinegar, India goods, wrought silks, tobacco, whale-fins, and
some other articles, were rendered permanent. The monopoly of the
trade to the South Seas was granted, and the company, being
incorporated by Act of Parliament, assumed the title by which it has
ever since been known. The minister took great credit to himself for
his share in this transaction, and the scheme was always called by his
flatterers "the Earl of Oxford's masterpiece."
Even at this early period of its history, the most visionary ideas
were formed by the company and the public of the immense riches of the
eastern coast of South America. Everybody had heard of the gold and
silver mines of Peru and Mexico; every one believed them to be
inexhaustible, and that it was only necessary to send the manufactures
of England to the coast, to be repaid a hundredfold in gold and silver
ingots by the natives. A report, industriously spread, that Spain was
willing to concede four ports, on the coasts of Chili and Peru, for
the purposes of traffic, increased the general confidence; and for
many years the South Sea Company's stock was in high favour.
Philip V of Spain, however, never had any intention of admitting
the English to a free trade in the ports of Spanish America.
Negotiations were set on foot, but their only result was the assiento
contract, or the privilege of supplying the colonies with negroes for
thirty years, and of sending once a year a vessel, limited both as to
tonnage and value of cargo, to trade with Mexico, Peru, or Chili. The
latter permission was only granted upon the hard condition, that the
King of Spain should enjoy one-fourth of the profits, and a tax of
five per cent. on the remainder. This was a great disappointment to
the Earl of Oxford and his party, who were reminded much oftener than
they found agreeable of the
"Parturiunt montes, nascitur ridiculus mus,"
But the public confidence in the South Sea Company was not shaken. The
Earl of Oxford declared, that Spain would permit two ships, in
addition to the annual ship, to carry out merchandise during the first
year; and a list was published, in which all the ports and harbours of
these coasts were pompously set forth as open to the trade of Great
Britain. The first voyage of the annual ship was not made till the
year 1717, and in the following year the trade was suppressed by the
rupture with Spain.
The King's speech, at the opening of the session of 1717, made pointed
allusion to the state of public credit, and recommended that proper
measures should be taken to reduce the national debt. The two great
monetary corporations, the South Sea Company and the Bank of England,
made proposals to Parliament on the 20th of May ensuing. The South Sea
Company prayed that their capital stock of ten millions might be
increased to twelve, by subscription or otherwise, and offered to
accept five per cent. instead of six upon the whole amount. The Bank
made proposals equally advantageous. The House debated for some time,
and finally three acts were passed, called the South Sea Act, the Bank
Act, and the General Fund Act. By the first, the proposals of the
South Sea Company were accepted, and that body held itself ready to
advance the sum of two millions towards discharging the principal and
interest of the debt due by the state for the four lottery funds of
the ninth and tenth years of Queen Anne. By the second act, the Bank
received a lower rate of interest for the sum of 1,775,027 pounds 15
shillings due to it by the state, and agreed to deliver up to be
cancelled as many Exchequer bills as amounted to two millions
sterling, and to accept of an annuity of one hundred thousand pounds,
being after the rate of five per cent, the whole redeemable at one
year's notice. They were further required to be ready to advance, in
case of need, a sum not exceeding 2,500,000 pounds upon the same terms
of five per cent interest, redeemable by Parliament. The General Fund
Act recited the various deficiencies, which were to be made good by
the aids derived from the foregoing sources.
The name of the South Sea Company was thus continually before the
public. Though their trade with the South American States produced
little or no augmentation of their revenues, they continued to
flourish as a monetary corporation. Their stock was in high request,
and the directors, buoyed up with success, began to think of new means
for extending their influence. The Mississippi scheme of John Law,
which so dazzled and captivated the French people, inspired them with
an idea that they could carry on the same game in England. The
anticipated failure of his plans did not divert them from their
intention. Wise in their own conceit, they imagined they could avoid
his faults, carry on their schemes for ever, and stretch the cord of
credit to its extremest tension, without causing it to snap asunder.
It was while Law's plan was at its greatest height of popularity,
while people were crowding in thousands to the Rue Quincampoix, and
ruining themselves with frantic eagerness, that the South Sea
directors laid before Parliament their famous plan for paying off the
national debt. Visions of boundless wealth floated before the
fascinated eyes of the people in the two most celebrated countries of
Europe. The English commenced their career of extravagance somewhat
later than the French; but as soon as the delirium seized them, they
were determined not to be outdone. Upon the 22nd of January 1720, the
House of Commons resolved itself into a Committee of the whole House,
to take into consideration that part of the King's speech at the
opening of the session which related to the public debts, and the
proposal of the South Sea Company towards the redemption and sinking
of the same. The proposal set forth at great length, and under several
heads, the debts of the state, amounting to 30,981,712 pounds, which
the Company were anxious to take upon themselves, upon consideration
of five per cent. per annum, secured to them until Midsummer 1727;
after which time, the whole was to become redeemable at the pleasure
of the legislature, and the interest to be reduced to four per cent.
The proposal was received with great favour; but the Bank of England
had many friends in the House of Commons, who were desirous that that
body should share in the advantages that were likely to accrue. On
behalf of this corporation it was represented, that they had performed
great and eminent services to the state, in the most difficult times,
and deserved, at least, that if any advantage was to be made by public
bargains of this nature, they should be preferred before a company
that had never done any thing for the nation. The further
consideration of the matter was accordingly postponed for five days.
In the mean time, a plan was drawn up by the Governors of the Bank.
The South Sea Company, afraid that the Bank might offer still more
advantageous terms to the government than themselves, reconsidered
their former proposal, and made some alterations in it, which they
hoped would render it more acceptable. The principal change was a
stipulation that the government might redeem these debts at the
expiration of four years, instead of seven, as at first suggested. The
Bank resolved not to be outbidden in this singular auction, and the
Governors also reconsidered their first proposal, and sent in a new
one.
Thus, each corporation having made two proposals, the House began
to deliberate. Mr. Robert Walpole was the chief speaker in favour of
the Bank, and Mr. Aislabie, the Chancellor of the Exchequer, the
principal advocate on behalf of the South Sea Company. It was
resolved, on the 2nd of February, that the proposals of the latter
were most advantageous to the country. They were accordingly received,
and leave was given to bring in a bill to that effect.
Exchange Alley was in a fever of excitement. The Company's stock,
which had been at a hundred and thirty the previous day, gradually
rose to three hundred, and continued to rise with the most astonishing
rapidity during the whole time that the bill in its several stages was
under discussion. Mr. Walpole was almost the only statesman in the
House who spoke out boldly against it. He warned them, in eloquent and
solemn language, of the evils that would ensue. It countenanced, he
said, "the dangerous practice of stockjobbing, and would divert the
genius of the nation from trade and industry. It would hold out a
dangerous lure to decoy the unwary to their ruin, by making them part
with the earnings of their labour for a prospect of imaginary wealth.
The great principle of the project was an evil of first-rate
magnitude; it was to raise artificially the value of the stock, by
exciting and keeping up a general infatuation, and by promising
dividends out of funds which could never be adequate to the purpose.
In a prophetic spirit he added, that if the plan succeeded, the
directors would become masters of the government, form a new and
absolute aristocracy in the kingdom, and control the resolutions of
the legislature. If it failed, which he was convinced it would, the
result would bring general discontent and ruin upon the country. Such
would be the delusion, that when the evil day came, as come it would,
the people would start up, as from a dream, and ask themselves if
these things could have been true. All his eloquence was in vain. He
was looked upon as a false prophet, or compared to the hoarse raven,
croaking omens of evil. His friends, however, compared him to
Cassandra, predicting evils which would only be believed when they
came home to men's hearths, and stared them in the face at their own
boards. Although, in former times, the House had listened with the
utmost attention to every word that fell from his lips, the benches
became deserted when it was known that he would speak on the South Sea
question.
The bill was two months in its progress through the House of
Commons. During this time every exertion was made by the directors and
their friends, and more especially by the Chairman, the noted Sir John
Blunt, to raise the price of the stock. The most extravagant rumours
were in circulation. Treaties between England and Spain were spoken
of, whereby the latter was to grant a free trade to all her colonies;
and the rich produce of the mines of Potosi-la-Paz was to be brought
to England until silver should become almost as plentiful as iron. For
cotton and woollen goods, with which we could supply them in
abundance, the dwellers in Mexico were to empty their golden mines.
The company of merchants trading to the South Seas would be the
richest the world ever saw, and every hundred pounds invested in it
would produce hundreds per annum to the stockholder. At last the stock
was raised by these means to near four hundred; but, after fluctuating
a good deal, settled at three hundred and thirty, at which price it
remained when the bill passed the Commons by a majority of 172 against
55.
In the House of Lords the bill was hurried through all its stages with
unexampled rapidity. On the 4th of April it was read a first time; on
the 5th, it was read a second time; on the 6th, it was committed; and
on the 7th, was read a third time, and passed.
Several peers spoke warmly against the scheme; but their warnings
fell upon dull, cold ears. A speculating frenzy had seized them as
well as the plebeians. Lord North and Grey said the bill was unjust in
its nature, and might prove fatal in its consequences, being
calculated to enrich the few and impoverish the many. The Duke of
Wharton followed; but, as he only retailed at second-hand the
arguments so eloquently stated by Walpole in the Lower House, he was
not listened to with even the same attention that had been bestowed
upon Lord North and Grey. Earl Cowper followed on the same side, and
compared the bill to the famous horse of the siege of Troy. Like that,
it was ushered in and received with great pomp and acclamations of
joy, but bore within it treachery and destruction. The Earl of
Sunderland endeavoured to answer all objections; and, on the question
being put, there appeared only seventeen peers against, and
eighty-three in favour of the project. The very same day on which it
passed the Lords, it received the Royal assent, and became the law of
the land.
It seemed at that time as if the whole nation had turned
stockjobbers. Exchange Alley was every day blocked up by crowds, and
Cornhill was impassable for the number of carriages. Everybody came to
purchase stock. "Every fool aspired to be a knave." In the words of a
ballad, published at the time, and sung about the streets, ["A South
Sea Ballad; or, Merry Remarks upon Exchange Alley Bubbles. To a new
tune, called 'The Grand Elixir; or, the Philosopher's Stone
Discovered.'"]
Then stars and garters did appear
Among the meaner rabble;
To buy and sell, to see and hear,
The Jews and Gentiles squabble.
The greatest ladies thither came,
And plied in chariots daily,
Or pawned their jewels for a sum
To venture in the Alley.
The inordinate thirst of gain that had afflicted all ranks of
society, was not to be slaked even in the South Sea. Other schemes, of
the most extravagant kind, were started. The share-lists were speedily
filled up, and an enormous traffic carried on in shares, while, of
course, every means were resorted to, to raise them to an artificial
value in the market.
Contrary to all expectation, South Sea stock fell when the bill
received the Royal assent. On the 7th of April the shares were quoted
at three hundred and ten, and. on the following day, at two hundred
and ninety. Already the directors had tasted the profits of their
scheme, and it was not likely that they should quietly allow the stock
to find its natural level, without an effort to raise it. Immediately
their busy emissaries were set to work. Every person interested in the
success of the project endeavoured to draw a knot of listeners around
him, to whom he expatiated on the treasures of the South American
seas. Exchange Alley was crowded with attentive groups. One rumour
alone, asserted with the utmost confidence, had an immediate effect
upon the stock. It was said, that Earl Stanhope had received overtures
in France from the Spanish Government to exchange Gibraltar and Port
Mahon for some places on the coast of Peru, for the security and
enlargement of the trade in the South Seas. Instead of one annual ship
trading to those ports, and allowing the King of Spain twenty-five per
cent. out of the profits, the Company might build and charter as many
ships as they pleased, and pay no per centage whatever to any foreign
potentate.
Visions of ingots danced before their eyes,
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