diff options
| author | nfenwick <nfenwick@pglaf.org> | 2025-02-04 08:22:32 -0800 |
|---|---|---|
| committer | nfenwick <nfenwick@pglaf.org> | 2025-02-04 08:22:32 -0800 |
| commit | 1f4d3c2a967ab870fedd2a916f1fc12a7c730df9 (patch) | |
| tree | 5f390000da284b973add8f84872359e5c01ba3c7 /old/63453-0.txt | |
| parent | 429180b11077ff45b77e9aa8ecf879cdc849ff47 (diff) | |
Diffstat (limited to 'old/63453-0.txt')
| -rw-r--r-- | old/63453-0.txt | 5418 |
1 files changed, 0 insertions, 5418 deletions
diff --git a/old/63453-0.txt b/old/63453-0.txt deleted file mode 100644 index 8c6fbd7..0000000 --- a/old/63453-0.txt +++ /dev/null @@ -1,5418 +0,0 @@ -The Project Gutenberg EBook of John Law of Lauriston, by A. W. Wiston-Glynn - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - -Title: John Law of Lauriston - -Author: A. W. Wiston-Glynn - -Release Date: October 13, 2020 [EBook #63453] - -Language: English - -Character set encoding: UTF-8 - -*** START OF THIS PROJECT GUTENBERG EBOOK JOHN LAW OF LAURISTON *** - - - - -Produced by deaurider, Charlie Howard, and the Online -Distributed Proofreading Team at https://www.pgdp.net (This -file was produced from images generously made available -by The Internet Archive) - - - - - - - - - -JOHN LAW OF LAURISTON - -[Illustration: - - _Copyright._] [_Emery Walker._ - -JOHN LAW OF LAURISTON. - -From a portrait in the National Portrait Gallery, London.] - - - - - John Law of Lauriston - - _Financier and Statesman_ - - FOUNDER OF THE BANK OF FRANCE, ORIGINATOR OF THE - MISSISSIPPI SCHEME, ETC. - - [Illustration] - - By A. W. WISTON-GLYNN, M.A. - - EDINBURGH - - E. SAUNDERS & Co., 52 NORTH BRIDGE STREET - - ALSO AT LONDON AND DUBLIN - - - - - Inscribed - - to - - My Wife. - - - - -PREFACE - - -The career of John Law is one of the most striking and romantic in a -period teeming with great and historic personages, and provides in the -annals of the early part of the 18th century a chapter dealing with a -series of exciting events which, in their character, their intensity, -and their influence upon the French people, were almost revolutionary. -As a financial genius he was incomparably the greatest man of his age. -His schemes, original in their conception, and vast in their operation, -captivated by their brilliance a nation already on the brink of ruin, -and eager to embrace any possible means by which it might rehabilitate -its shattered fortunes. His gigantic joint-stock undertakings, his -sweeping financial proposals culminating in the discharge of the whole -National Debt of France, his gradual increase of power and influence, -and latterly his virtual control of the government of France, made him -a man of international importance--a man to be respected, flattered, -and feared. - -It is, accordingly, a somewhat striking circumstance that, with -the exception of the short account of Law’s career by John Philip -Wood issued so long ago as 1824, no adequate biography of the great -financier has yet appeared in this country. While essays, and -critical articles have, no doubt, appeared in abundance in numerous -publications, and while his phenomenal career has even been pressed -into the service of fictional literature, it has only been possible to -obtain a comprehensive impression of the man and his work by reference -to the numerous treatises dealing with his system published in France -during the 18th century, to the voluminous memoirs of the time, and -last but not least to the state and official documents in which his -various schemes are considered. In preparing the following pages, -therefore, it has been necessary to deal with a considerable mass -of unsifted material, no small portion of which seems to have been -neglected by previous writers, although valuable and requisite for -forming a just and impartial estimate. - -Amongst the authorities to which I have been most indebted for guidance -are the following,--“Histoire du Système des Finances pendant les -années, 1719 and 1720,” by Duhautchamps; “Vue génèrale du Système de M. -Law,” by Fourbonnais; “Correspondence of the 2nd Earl of Stair, in the -Hardwicke State papers;” “Memoirs de Saint-Simon;” “Law et son système -des Finances,” by Thiers; “Recherches historiques sur le systême de -Law,” by Levasseur; and “Law, son systême et son époque,” by Cochut. -Law’s own writings have, of course, also furnished valuable material, -and particularly his “Proposals and Reasons for constituting a Council -of Trade in Scotland,” and his “Money and Trade Considered.” His later -writings form part of Daire’s “Collection des Principaux Economistes.” - - A. W. W.-G. - - EDINBURGH, - _26th November, 1907_. - - - - -ILLUSTRATIONS. - - - JOHN LAW OF LAURISTON Frontispiece. - - facing page - - LAURISTON CASTLE 4 - - LA SALLE 52 - - DUC D’ORLEANS 104 - - EARL OF STAIR 148 - - CARDINAL DUBOIS 186 - - - - -CONTENTS - - - PAGE - - CHAPTER I. 1 - Standard of criticism hitherto applied to John Law.-- - Birth and ancestry.--Education.--Death of father.-- - Early devotion to study of finance.--Manner and - appearance.--Visits London.--Duel with Beau Wilson.-- - Tried for murder.--Escapes to France.--Meets Lady - Catherine Knollys.--Career of gambling on the - Continent.--Studies banking.--Formulates new principles - of finance.--Returns to Scotland. - - CHAPTER II. 15 - Unsettled condition of Scottish politics in 1700.-- - Financial and commercial insecurity of country.--Law’s - solution of difficulties.--Land Bank.--Supported by - Court party.--Rejected by Parliament.--Again resorts - to gambling.--Returns to Continent.--Expelled from - Holland.--Visits Paris.--Discusses finance with Duc - d’Orleans.--Expelled by Lieutenant General of Police.-- - Submits proposals to Louis XIV. without success.--Again - attempts to secure adoption of proposals by France.-- - Financial condition of France.--Earl of Stair’s - friendship with Law. - - CHAPTER III. 33 - Accession of Louis XV.--National debt of France.-- - Debasement of coinage.--Arraignment of tax collectors.-- - Council of Finances consider Law’s proposals - unfavourably.--Petition for permission to establish - private bank granted.--Constitution of the Bank.--Its - Success.--The “Pitt” diamond and its purchase. - - CHAPTER IV. 50 - Law’s notes become official tender.--The Mississippi - Scheme projected.--Early explorers of Mississippi - territory.--Establishment of the West India Company.-- - Its absorption of depreciated _billets d’état_.-- - D’Argenson appointed Chancellor of France, and attempts - extinction of National Debt.--Law innocently involved - in D’Argenson’s fatal scheme.--Saved from arrest by - Regent.--The brothers Paris and an anti-system. - - CHAPTER V. 66 - Exaggerated accounts of resources of Louisiana.-- - Law’s judgment at fault.--His ultimate aim.--He - creates an artificial rise in the value of Company - shares.--His unsuccessful efforts to gain influence - over Saint-Simon.--Acquisition of Tobacco monopoly.-- - Absorption of other companies.--Reconstitution of West - India Company.--Parliamentary opposition overcome.-- - “Mothers” and “Daughters”.--Excited speculation in - shares.--Issue of notes to colonists.--A pioneer’s - account of Louisiana. - - CHAPTER VI. 82 - Company acquires right of coinage.--Issue of fresh stock - and rise in price.--Attempts made to discredit Law.-- - Stair’s account of the situation.--Law defeats the - anti-scheme.--The concluding proposal of his schemes.-- - The Company’s capital and sources of revenue.--Report of - directors for 1719.--Law’s bank converted into a Royal - bank against Law’s wish.--The Regent divests notes of - the bank of their most valuable features.--Provincial - branches established.--Restriction of gold and silver - tender.--Extravagance of successful speculators. - - CHAPTER VII. 98 - Hotel Mazarin acquired as office of Company and of - Bank.--Excitement of crowds in the Rue Vivienne and - the Rue Quincampoix.--Curious sources of fortune.-- - Instances of enormous fortunes acquired by members of the - nobility.--Enormous influx of foreign speculators into - Paris. - - CHAPTER VIII. 111 - Law’s importance causes him to be courted by all - classes.--Socially ostracised by nobility.--Law’s - conversion to Roman Catholicism.--The part of the - Abbé Dubois and the Abbé Tencin in the conversion.-- - Difficulties in its accomplishment.--Law becomes - naturalised.--Law appointed Controller-General - of Finance.--Regent celebrates appointment by a - distribution of pensions.--Law honoured with the freedom - of the City of Edinburgh.--Elected member of Academy - of Sciences.--William Law brought to France and made - Postmaster-General.--Law’s private investments.--His - fiscal reforms.--His introduction of free university - education. - - CHAPTER IX. 128 - Law’s designs against England’s political and industrial - position.--Earl of Stair’s correspondence with Mr. - Secretary Craggs.--Stair accused by Law of threatening - the safety of the Bank.--Stair’s recall intimated.-- - Lord Stanhope sent to conciliate Law.--Threatened - rupture between England and France over question of - evacuation of Gibraltar.--Stair endeavours to justify - his hostile attitude towards Law.--His apprehensions - as to Law’s purpose in acquiring South Sea stock.--The - humiliating nature of Stair’s dismissal. - - CHAPTER X. 154 - The beginning of Law’s difficulties.--The Bank’s reserve - of specie begins to be depleted.--Law attempts a remedy - by altering the standard of the coinage, and restricting - the currency of specie.--Temporary success of remedy.-- - Domiciliary visits resorted to for detection of hoarded - specie.--Bank and Company United.--Discharge of - National Debt.--Use of the Rue Quincampoix prohibited as - a stock market.--The assassination of a stock-jobber by - the Comte des Horn, and the latter’s execution. - - CHAPTER XI. 171 - New measures prove ineffectual.--New edict issued - fixing price of shares and depreciating value of - notes.--Authorship of edict.--People hostile to - edict.--Parliament refuses to register it, and a - revocation is issued.--Law deposed from office of - Controller-General.--D’Aguessau reinstated in his former - office.--New schemes for absorption of bank-notes.-- - Widespread distress produced amongst community.--Law’s - person in danger.--Stock-jobbers establish themselves in - the gardens of the Hotel de Soissons.--Parliament exiled - to Pontoise, and Bank closed for an indefinite period. - - CHAPTER XII. 189 - Starvation produced amongst poorer classes by issue of - new edict.--Law’s expulsion from France demanded.-- - Law resigns all his offices and leaves for Venice.-- - Privileges of Company withdrawn.--Commission appointed - to value unliquidated securities.--Law in vain applies - for recovery of a portion of his wealth.--His death - at Venice.--Attitude of French people towards Law.-- - Circumstances to be considered in passing judgment. - - - - -John Law of Lauriston - - - - -CHAPTER I - - Standard of criticism hitherto applied to John Law.--Birth and - ancestry.--Education.--Death of father.--Early devotion - to study of finance.--Manner and appearance.--Visits - London.--Duel with Beau Wilson.--Tried for murder.--Escapes to - France.--Meets Lady Catherine Knollys.--Career of gambling on - the Continent.--Studies banking.--Formulates new principles of - finance.--Returns to Scotland. - - -[Illustration] - -It has been the fate of most men who have left their name upon the -pages of political history to have their conduct scrutinised with a -degree of ethical fineness which happily is denied those whose records -have not risen above the commonplace. Such a standard of criticism -has been invariably applied in instances where origin of birth would -hardly justify anticipations of pre-eminent greatness--and especially -where the circumstances that have fostered its rise lie outside the -beaten track, and possess the inviting charm of novelty. Reputation -acquired in the steady, patient pursuit of a purpose is not more likely -to reach the level of permanent fame, than one of which spasmodic -progress forms the outstanding element. Where brilliance of meteoric -splendour appears in any sphere of life, but chiefly in the region -of national politics, a curiosity which otherwise would be escaped -is aroused by reason of its suddenness, and attempts are made to -discover unworthy motives behind each act. While these attempts can -only have a problematic value in absence of any true disclosure of -motive, judgment is not infrequently passed with an air of authority -that seems to exclude refutation. Nor is it an uncommon occurrence for -contemporary opinion, prejudiced and perhaps unjust, to distort the -estimates of subsequent writers. Exemplification of this is in some -degree to be found in the case of John Law of Lauriston, the founder of -the Mississippi Scheme, whose chequered and questionable career before -his elevation to a position of national importance in the government of -France, furnished excellent material for a sinister interpretation of -his intentions by his detractors. - -By birth, Law belonged to a family which held a position of -considerable social rank and influence in the Scottish capital. He was -born at Edinburgh, on the 21st of April, 1671, and his father, William -Law, described in the records of his time as a goldsmith carrying on -business in the capital, followed a profession more nearly allied -to that of banking as now understood. Some conflict appears to have -existed as to his lineage, but on the authority of Walter Scott, -Writer to the Signet, father of Sir Walter Scott, who acted for some -time as agent for the family, it may be taken that Law was the grandson -of James Law of Brunton, in Fife, by Margaret, daughter of Sir John -Preston, Bart. of Prestonhall, and great-great-grandson of James Law, -Archbishop of Glasgow from 1615 to 1632. The claim of his mother, Jane -Campbell, to relationship with the ducal house of Argyll may have been -somewhat remote, but is not at all improbable. - -With a view no doubt to educating his son to a career which the -fortunes of the family were sufficient to enable him to follow, and -perhaps because he early perceived evidences of uncommon capacity, -William Law embraced every opportunity which the educational facilities -of the time afforded. In order to put him beyond the possible -prejudicial influences of the city, he sent young Law at an early age -to Eaglesham, where he was placed under the care of the Rev. James -Hamilton, whose son subsequently married his eldest sister. There -he received his early education in a school established by the Rev. -Michael Rob, the first Presbyterian minister ordained after the liberty. - -Unfortunately for the future of his promising son, William Law died -in 1684, and to his mother’s care, but probably less restraining -influence, young Law was now entirely entrusted. In the year preceding -his death, however, William Law had acquired territorial dignity by the -purchase of the estates of Lauriston and Randleston, situated along -the Firth of Forth a few miles west of Edinburgh, the right to which -was taken in life-rent for himself and his wife, and in fee to John -Law, their eldest son. - -[Illustration: - - _From a Photograph._ - -LAURISTON CASTLE.] - -Law’s mother, although no more than an ordinary degree of womanly -grace and force of character can be attributed to her, possessed what -was of equal, if not of greater, value at such a juncture as this, -when the loss of the head of a family may mean so much--a capacity to -direct with prudence, tact, and business capacity the affairs of her -estate. The family was large; of eleven children nine survived, and -the burden imposed upon her resources by the education and maintenance -of so many, without entailing at least outward change of appearance, -is eloquent testimony to her cautious and careful management. Upon Law -himself she bestowed the greatest concern, continuing his education -upon the lines directed by his father, and in particular giving him -every encouragement towards the study of mathematics, in which his -youthful mind took the deepest delight. At an age when the majority of -children have merely mastered the preliminary stages of a branch of -knowledge presenting so many difficulties--and seldom indeed caring -or willing to go beyond its threshold--Law was able to find the most -genial occupation in solving the most complicated problems in geometry, -and in comprehending the subtleties of algebraic formulæ. At a time -also when political economy as a science was undeveloped, and -when the dominating principle of finance consisted of meeting daily -exigencies by daily expedients, Law devoted a considerable portion of -his time to inquiring into the basis of national and private credit, -the laws governing the currency of money, the problems of taxation, -and generally all the intricacies of economic phenomena that presented -themselves to his observation. The theories which he formulated as -scientific explanations of these phenomena indicate a philosophic grasp -of mind, although they may now appear crude and untenable, and bear -the marks of his proneness to hasty conclusion. They soon, however, -procured for him distinction as an economist of novel ideas, and formed -the foundation for the development of the various schemes by which he -afterwards acquired a European reputation. - -Added to his undoubted intellectual abilities, Law possessed an -engaging manner, a generous disposition, and a handsome personal -appearance. By his fastidiousness in dress, he gained a degree of -notoriety amongst his fellows, and was known amongst the ladies of his -acquaintance by the appellation of Beau Law, whilst the gentlemen of -the city conferred upon him the nickname of Jessamy John. - -When twenty-one years of age, Law, with the feeling of independence -due to the competency with which he had been provided by his father, -desired to find a wider field for the proper display of his various -accomplishments, and accordingly found his way to London, whence he -made frequent visits to Tunbridge Wells, Bath, and other popular places -of pleasure of the day. There he mixed with the highest social and -political circles, to which his talents obtained him ready access, but -in a society where gambling, hard drinking, and general dissipation -were marks of distinction, Law’s popularity made serious inroads in -a very short time upon his pecuniary position. An accumulation of -debts necessitated a re-arrangement of the fee of Lauriston in order -to provide for their payment. This he conveyed to his mother in -consideration of her advancing the requisite sum, and whatever other -money he required for immediate and legitimate purposes. The burden -thus imposed upon the estate, however, was not to be allowed to remain. -By severe economy his mother was able within a comparatively short -period to remove it, and to secure the estate free of encumbrance in -entailed succession to her family. - -An event, however, shortly occurred, which almost resulted in an -ignominious termination to Law’s career, but, as it happened, he -succeeded in escaping its consequences although it necessitated his -departure from the country. As an exponent of masculine fashions, he -had a rival in one Edward Wilson, a younger son of a Leicestershire -landlord. Their rivalry, as may be judged, did not conduce to friendly -relations, and ill-concealed feelings of hatred existed between the -two. This Wilson had been an ensign in Flanders, but having resigned -his commission--from what cause it is not known, whether it was that -his daintiness rebelled against the roughness of soldiery or that his -courage was not equal to its dangers--he found his way to London, -and there was a source of the greatest mystery to his friends and -associates. Possessed of little or no patrimony, he yet maintained a -magnificent establishment with an army of servants, and drove a coach -and six. His lavish entertainments, and his social splendour, were the -envy of the wealthiest. With unlimited credit, he nevertheless incurred -no debts but were speedily paid, and on his death left no estate or -evidence of the source of his abundant means. - -With Wilson, Law had a serious difference, in which a Mrs. Lawrence, -according to one account, and according to another Miss Elizabeth -Villiers, afterwards Countess of Orkney, was concerned, and -satisfaction could only be obtained by resorting to a duel. They met -at midday on 9th April, in 1699, in Bloomsbury Square, and Wilson -receiving a fatal wound, Law was arrested on a charge of having “of -his malice aforethought and assault premeditated, made an assault -upon Edward Wilson with a certain sword made of iron and steel of the -value of five shillings, with which he inflicted one mortal wound of -the breath of two inches, and of the depth of five inches, of which -mortal wound the said Edward Wilson then and there instantly died.” -Law was tried on the 18th, and two following days of the same month -at the Old Bailey, before the King’s and Queen’s Commissioners, but -notwithstanding the most skilful defence, was found guilty of murder, -and condemned to be hanged. - -His popularity with persons of rank now stood him in good stead at this -critical juncture. The acquaintanceships he had assiduously cultivated -during his brief stay in London were not without their value, and -enabled him to draw upon their influence to serviceable purpose. The -King’s mercy was invoked, and pardon was extended to the condemned man. -His release, however, was not to bring him absolute freedom. An appeal -was immediately made by Wilson’s brother to the Court of King’s Bench -to have this apparently wrongful exercise of royal clemency cancelled. -So general was the impression that justice had been flagrantly -abused, that Law was again arrested and thrown into prison during the -dependence of the appeal. Numerous technical objections were taken to -the grounds of the charge, but all without success, and fortune seemed -at last to have handed him over to the doom already pronounced against -him. But expedients for escape had not been all exhausted. With the -assistance of his friends he contrived, two days before his execution, -to regain his liberty, and place his recapture beyond possibility. -After overcoming his guard by the use of an opiate, and removing the -irons with which he had been fettered by means of files surreptitiously -conveyed to him, he climbed the high wall encircling the prison -buildings, and, in the company of sympathetic associates, succeeded in -reaching the Sussex coast, where a boat had been held in readiness to -convey him over to France. The authorities made no serious effort to -prevent his flight. Rather does it appear that, under the influence -which formerly secured his pardon, they connived at his escape. -Strength is given to this hypothesis by the misleading description -of Law in the announcement offering a reward for the capture of the -fugitive, which appeared in the LONDON GAZETTE of 7th January, 1695, -to the effect that “Captain John Lawe, a Scotchman, lately a prisoner -in the King’s Bench for murther, aged 26, a very tall, black, lean, -man, well shaped, above six foot high, large pock-holes in his face, -big high nosed, speaks broad and loud, made his escape from the said -prison. Whoever secures him, so as he may be delivered at the said -prison, shall have fifty pounds paid immediately by the Marshall of the -King’s Bench.” - -Having arrived in safety upon French territory, Law made his way to -that haven of refuge for all needy Scotsmen of birth and influence, -the Court of St. Germains. Here he hoped to recover his lost position -and fortunes by placing the services of his naturally great abilities -at the disposal of a Court to whom they could not but be of some -advantage if properly directed. His efforts to secure a place were -unsuccessful, but it was probably at this time that he met the lady -who was afterwards to be his wife, although for a time she lived with -him as such while yet she was the wife of another. Lady Catherine -Knollys, sister of the fourth Earl of Banbury, was the wife of a -gentleman called Senor or Seignieur. Law’s attractions were probably -too captivating to be resisted, with the result that she “liked him so -well as to pack up her alls, leave her husband, and run away with him -to Italy.” - -The moral obliquity of the incident lends colour to the unsparing -attacks of his enemies, and certainly cannot be extenuated even -according to the loose standards of his day. The gravity of the offence -he could not be ignorant of, notwithstanding his youth. His finer -susceptibilities, however, had been impaired by the contagion of vice, -which led him to embark upon risks, especially of gallantry, from mere -impulsiveness, and regardless of consequence. What little credit can be -extended to Law in connection with this affair, he derives from having -remained faithful to her to the last, while the death of her husband, -shortly after, relieved him of possible embarrassment during his -subsequent visits and residence in Paris. - -Unsuccessful in his appeal to the Court at St. Germains to secure -official employment, he resumed his old career of gambling, and made -the principal cities of the Continent the field of his operations for -the next three or four years. His movements at this time are somewhat -difficult to trace. No authentic record of his peregrinations have -come down to us. It is tolerably clear, however, that he resided for -short periods at Genoa, Rome, Venice and Amsterdam, and may also -have visited Florence and Naples. Gambling in his case was no mere -means of satisfying an uncontrollable passion. He did not conduct it -promiscuously. He based his speculations upon a system which he had -developed for his own guidance after the most careful study of the -laws of chance. Although success did not invariably attend his play, -the balance of probability was so frequently in his favour that he was -not only able to maintain his position as a gentleman of worth, but to -amass a considerable fortune in an incredibly short period of time. No -doubt the cool, calculating Scotsman, apart from any merit his system -of play may have possessed, was more likely to rise from the tables -with success than those with whom he would choose to gamble. Not only -would his confidence and boldness irritate and excite his opponents, -but the reputation his skill had acquired for him would be in itself -a disturbing element to their minds, and render them unequal to his -superior play. - -Notwithstanding his propensities in this direction, Law also devoted -his abilities and his keen powers of observation to another and more -creditable study. The subject of banking, the mysteries of credit, and -all the intricacies of financial problems appealed to his strongly -mathematical mind, and of the advantages afforded him, whilst on the -Continent, for an intimate acquaintance with the various systems of -his time he was not slow to avail himself. At this period there were -several banking companies in Europe, and of these the banks of Venice, -Genoa, and Amsterdam were the chief. The first two owe their origin to -the financial difficulties of the Venetian and Genoese Republics, and -had been in existence since 1157 and 1407 respectively. The Bank of -Amsterdam, on the other hand, was of more modern growth, having been -established in 1609 in order to minimise the confusion continually -arising from the unsteady value of the currency by placing the coinage -upon a fixed and more permanent basis. Law, accordingly, utilised his -stay in these three cities to gaining an insight into their methods -of business. At Venice, we are told, he constantly went to the Rialto -at Change time, and no merchant upon commission was more punctual. -He observed the course of exchange all the world over; the manner of -discounting bills at the bank; the vast usefulness of paper credit; how -gladly people parted with their money for paper, and how the profits -accrued from this paper to the proprietors. At Amsterdam, where he was -employed as secretary to the British Resident in Holland, “he made -himself acquainted on the spot with the famous bank of that city; with -its capital, its produce, its resources; with the demands individuals -had upon it; with its variations, its interests; with the mode of -lowering or raising its stock, in order to withdraw the capital, -that it might be distributed and circulated; with the order that -bank observed in its accounts and in its offices; and even with its -expenditures and its form of administration.” - -The varied information which Law in this way acquired during his -residence on the Continent, and especially in the great banking -centres, he did not store as a mere mass of bare interesting facts. -Whether the investigations he assiduously pursued were the outcome of a -design to develop a new system of banking, or proceeded merely from the -attraction of the subject, is matter of doubt. But it is clear that he -abstracted certain principles of finance from the data he had gathered, -and that these principles were heterodox according to the opinions of -his contemporaries. Our judgment upon Law must be largely determined by -our impression as to whether these principles were logically deduced -explanations of the financial phenomena he observed, or whether they -were the fanciful ideas of his own imagination for the justification -of which he sifted his phenomena. It is extremely difficult to arrive -at any definite conclusion. His own published writings give no guiding -clue, and the records of his time confuse, rather than enlighten, by -their contradictory and varied explanations of his schemes. It is -probable that the principles upon which they were founded possessed -an element of both possibilities. His observations on the one hand -would seem to indicate to his mind some underlying law; and on the -other hand his mind, impressed with the beauty and simplicity of some -vast ambitious scheme of finance, would readily discover support in -its favour from the deductions he had made. At no time did Law attempt -to build up a system of financial philosophy, but he must be given -due praise for laying down propositions bearing upon the subject of -credit and of the use of paper money which have stood the test of -time and received recognition from political economists of our own -day. He must also be raised to a higher level than a mere financial -schemer. His proposals were more than plausible. They had an element -of practicability, in which he demonstrated his own belief by his -readiness to put them to test under private direction before they were -launched with sovereign authority and under public control. Convinced -so thoroughly as he was with the soundness of his theories, and with -the possibilities they opened up, if adopted, of infusing new life and -new energy into the commercial world of his day, he regarded himself as -a man with an important mission. - -His own country seemed to offer a suitable field for his financial -ability, and we find him back in Edinburgh in the closing year of the -seventeenth century, the legislative independence of Scotland affording -him all necessary safety against arrest for the murder of which he had -been guilty five years previously. - - - - -CHAPTER II - - Unsettled condition of Scottish politics in 1700.--Financial - and commercial insecurity of country.--Law’s solution of - difficulties.--Land Bank.--Supported by Court party.--Rejected - by Parliament.--Again resorts to gambling.--Returns to - Continent.--Expelled from Holland.--Visits Paris.--Discusses - finance with Duc d’Orleans.--Expelled by Lieutenant General - of Police.--Submits proposals to Louis XIV. without - success.--Again attempts to secure adoption of proposals by - France.--Financial condition of France.--Earl of Stair’s - friendship with Law. - - -[Illustration] - -Scotland at the time of Law’s return was in a very unsettled condition, -politically and commercially. The projected union of the two Kingdoms -was beginning to emerge from the sphere of discussion into that -of practical politics. The change was recognised as likely to be -attended with results of the greatest consequence, but was not by any -means enthusiastically supported by public opinion. What, however, -was obviously impossible by means of conviction, was ultimately -accomplished by methods of bribery, and the Act of Union stands as -a striking instance of the great success of a policy universally -condemned, but carried by dishonourable means in spite of the -opposition of those who were chiefly concerned. - -The minds of the people, however, in 1700 were more disturbed by the -feeling of financial insecurity that was gradually asserting itself. -The air had been for some years laden with all kinds of fanciful -schemes advanced by men who had the public ear, and who had succeeded -in calling up visions of easily won wealth in the imaginations of a -nation at that time, as now, characterised by caution and business -prudence to the degree of frugality. Banks, colonisation schemes, -and all sorts of extravagant and even ridiculous proposals followed -close upon one another in one continuous stream, but almost invariably -bringing ruin in their train. The most notable, as it was the most -disastrous of these, was the Darien Scheme launched by William -Paterson, founder of the Bank of England. Patronised by all the -nobility and people of money as well as by numerous public bodies, -and possessing all the superficial elements of success, it produced a -fever of financial excitement and a mad race for the acquisition of -holdings in its capital. Its collapse caused widespread disaster, and -was in reality a national calamity, entirely destroying that confidence -essential to industrial and commercial stability. - -Law found in the condition of his native country a congenial subject -for treatment according to the economic theories he had developed -during his stay on the Continent. In the beginning of 1701 he published -his “Proposals and Reasons for Constituting a Council of Trade in -Scotland.” In it he advocated changes of a very drastic and radical -character, and while they were without question too advanced and -impracticable for his day, at least for adoption in their entirety, -they show that he was by no means a Utopian theorist, but possessed the -insight and foresight of a statesman. He advocated the establishment, -under statutory authority, of a Council of Trade entrusted with the -sole administration of the national revenue, bringing under that -denomination the king’s revenues, the ecclesiastical lands, charitable -endowments, and certain other new impositions, such as a tax of -one-fortieth on all grain grown in the country, one-twentieth of all -sums sued for by litigants, and a legacy duty of one-fortieth. The -Council of Trade would control the national treasury and would direct -the national expenditure. The uses to which he suggested the moneys -thus collected should be directed were all devised in the interests of -promotion of trade. After allowing a sufficient sum for the Civil List, -the Council were to discover proper means of employing the poor and -preventing idleness; establish national granaries; improve the mines -and develop the mineral wealth of the country; restore the fisheries -to their flourishing condition of the reign of James I.; reduce the -interest of money; abolish monopolies; and encourage foreign trade, -which was at a very low ebb. Notwithstanding the vigour with which Law -advocated his proposals, and notwithstanding the brilliant hopes he -held out by their adoption, they received little or no countenance from -public opinion, and were regarded as wholly impracticable by Parliament. - -During the five years that followed his first unsuccessful incursion -into the domain of practical politics, Law was engrossed in the -development of a new and more brilliant project. He gave it to the -world in 1705 in a volume which bore the title, “Money and Trade -considered, with a Proposal for Supplying the Nation with Money.” It -displayed a remarkable grasp of the theory of credit, and evidenced -the inborn financial genius of its author. Although its proposals and -the propositions upon which they were based can hardly bear judgment -according to the standards of present-day political economy, it must -be remembered that up to that time no attempt had been made in the -formulation of the principles of that science. The difficulties he had -to encounter were great, but the manner in which he surmounted them -was not only a tribute to his clearness of mind, but showed a judicial -capacity to a remarkable extent in marshalling masses of disjointed -facts. - -He proposed the establishment of a Land Bank, with power to issue -to landlords notes secured upon their estates, and having a forced -currency at their face value. The extent of each issue was to be -determined in one of three ways: 1. As an ordinary heritable loan, not -exceeding the maximum of two-thirds of the value of the property; -2. As a loan up to the full value of the property, but with a fixed -period of redemption; or 3. As an irredeemable purchase for value. The -adoption of his proposal would have had the effect, he submitted, of -relieving the commercial tension due to the insufficiency of specie -by supplying a medium of currency of a non-fluctuating value. Though -forced, the notes would not in any way have been mere accommodation -paper, but would always be for value or security received. Confidence -would thus have been maintained, and the risk of panic amongst holders -avoided. - -Law had succeeded in interesting the Court party and a considerable -number of influential politicians in favour of his suggested scheme. It -appealed to them less upon its merits than upon its probable effect of -reducing the estates of the kingdom to dependence upon the Government. -The Duke of Argyll, supported by his sons the Marquis of Lorne and -Lord Archibald Campbell, and by the Marquis of Tweeddale, submitted -the proposal to the Scottish Parliament. An opposition, however, led -by the Lord Chancellor, proved strong enough to reject it by a large -majority, and passed a resolution “that the establishing of any kind -of paper credit, so as to oblige it to pass, was an improper expedient -for the nation.” It is evident that the ground of the opposition, which -was ostensibly the chimerical nature of the scheme, but really the -fear that the Government of the country would be placed in the hands -of the Court by its adoption, was not the concealed intention of Law -in its formulation. The possibility of this consequence only emerged -in the course of discussion, and in the knowledge of the composition -of Parliament the opponents of the scheme were strongly justified in -regarding the possible result as a certain probability. From Law’s -point of view, however, the scheme only attempted what is successfully -followed by banking institutions of the present day, with the -difference that the latter have a reserve of gold against their notes, -whereas the former would have had the landed property of the country. - -Law’s hopes of being able to realise his ambitions in his native land -were now at an end. He saw no prospect of attaining that position in -the control of public affairs to which he aspired, and for which he -considered himself eminently fitted. He was, accordingly, compelled -to fall back upon his old gambling career, which had been practically -suspended since his return to Scotland. To such advantage did he -indulge his skill in this direction, that in the course of a few months -he found himself an extremely wealthy man, amongst his gains being the -estate of Sir Andrew Ramsay of a yearly value of £1200 Scots, and an -annuity of £1455 Scots secured upon the estate of Pitreavie in Fife, -purchased in 1711 by Sir Robert Blackwood from the Earl of Rosebery. - -The negotiations for the Union of the two kingdoms were now fast -approaching a successful conclusion. Law felt his safety in a somewhat -precarious condition, the death of Wilson still rendering him liable -to arrest should he cross the Border, and the Union in all probability -likely to remove the element of safety from his residence in Scotland. -He petitioned the Crown for a pardon, but Wilson’s brother, an -influential banker of Lombard Street, protested against its being -granted, thus leaving no excuse upon which a pardon might be extended, -had the royal prerogative been inclined in his favour. - -The Continent furnished the only safe asylum, and thither Law removed -himself in 1707, or at the latest, early in 1708. He seems first to -have taken up residence at the Hague, and then at Brussels, living in -luxurious fashion, and impressing every one by his extravagance and -apparently inexhaustible resources. With a keen eye for the weaknesses -of a people, Law introduced the Dutch to the exciting possibilities -of the lottery system. So far was he received into their good favour -that not only was a State lottery established, but every town of any -consequence had a smaller lottery of its own. The lottery was to be the -great panacea for all financial embarrassments, national and municipal. -Law, however, was not a disinterested participant in all these dazzling -schemes. His suggestions, if worth adoption, were worth remuneration, -but unfortunately he did not himself disclose the source of it, with -results which necessitated his removal from the country. “Mr. Hornbeck, -Great Pensionary of Holland, being also a nice calculator, finding -out that Mr. Law had calculated these lotteries entirely to his own -benefit, and to the prejudice of the people, having got about 200,000 -guilders by them, Mr. Law was privately advised by the States to leave -their dominions.” - -On his expulsion from Holland, Law abandoned himself to the life -of a rover amongst the various Continental cities, and to all the -attractions they offered. For six years he exercised with profitable -results his skill as a gambler, and quickly gained a notoriety -throughout Europe as a player of remarkable and unvarying success in -every game of chance. He seems first to have gone to Paris, which -afforded a rich and extensive field for gambling operations, and his -good fortune brought around him a cringing crowd of followers, hoping -to attract to themselves some of the glamour that surrounded the -person of their idol. In his train were to be found the flower of the -French nobility. He spent his time in the houses of the aristocracy -of the day, of whom he was at all times a favoured guest, not less by -his skilful play than by his pleasant, affable manner, and brilliant -conversation and wit. Faro was the game in which he most delighted, and -at the houses of Poisson, Duclos, and at the Hotel de Gesvres, he held -a sort of faro bank, and the _entree_ to these houses was considered -a matter of the greatest favour. In the fashionable crowd of excited -gamesters Law was the only one who remained absolutely cool whatever -the fortunes of the game. His operations were conducted upon a most -extensive scale, and necessitated the employment of considerable sums -of money. It was no uncommon circumstance for Law to carry with him -100,000 livres or more in gold. So cumbrous did this become, that he -conceived and carried out the idea of utilising counters, which were -valued at eighteen louis each, and proved more convenient than the coin -they represented. - -During this first visit of Law to Paris, which apparently lasted not -more than a year, Law succeeded in gaining the good favour of the Duc -de Chartres, afterwards, as Duc d’Orleans, Regent of France during the -minority of Louis XV., and of Chamillard, the Comptroller-General. -With these he had frequent conversations concerning the embarrassed -condition of the French Treasury, and discussed proposals for -its improvement. He captivated them by the apparent soundness of -his knowledge of finance, and by his brilliant theories for the -establishment of the National Exchequer on a stable foundation. Every -opportunity was embraced by Law for holding these discussions, and -although they had no immediate effect beyond securing the adherence -of two of the most powerful men in the Government, they laid the -foundation of his future greatness. Unfortunately, however, for Law, -the continuity of his acquaintance with the man with whom he desired -most to cultivate friendship was rudely and unexpectedly suspended. -D’Argenson, Lieutenant-General of Police, was suspicious of Law and his -methods. His reports to the Government were unfavourable and framed -with a view to Law’s expulsion from Paris. This he ultimately succeeded -in getting authority to do, and Law was immediately served with a -notice to leave the capital within twenty-four hours on the ground -“that he knew how to play too well at the games he had introduced.” - -For a considerable time Law remained away from Paris, visiting the -principal cities of Italy, Hungary, and Germany, and in all leaving -behind him the reputation of being one of the most remarkable men -of his age. He became a frequent and well-known visitor at all the -gambling resorts on the Continent. His progress from city to city -resembled the progress of a royal court, and rumour preceded him to -herald his coming. He was no common gambler. He was an accomplished man -of the world, exquisitely courteous, and with interests that rose above -the sordid pursuits from which he derived his pecuniary prosperity. -His political instincts were always allowed free play, and by close -observation he acquired the amplest knowledge of the industrial and -economic conditions of the various countries he visited. - -Law was now becoming anxious to secure an opportunity of putting into -practice the schemes he had mentally constructed for the improvement of -trade and commerce. The more he observed the prevailing unhealthiness -of industry, and the more he satisfied himself as to the apparent -causes of industrial depression, the more did he feel that his scheme -was the only royal remedy. He accordingly returned to Paris shortly -before the close of the reign of Louis XIV., purposing to gain the -support of that monarch for the adoption of his system in France. -Chamillard did not now occupy the office of Comptroller-General, -but Law through the influence of the Abbé Thesul was received by -Desmarets his successor, who not only discussed in thorough detail the -scheme laid before him by Law for the rehabilitation of the financial -condition of the country, but became so enamoured of it that he decided -upon submitting it to the King himself. Louis XIV., however, was not a -man of large mental horizon. His decisions were often the outcome of -the impulse of the moment. Frequently they were determined by religious -bias, even where religious scruples were wholly foreign to the matter -under consideration. Law’s proposal seems to have been placed under the -latter category by Louis XIV. Report has it that the bigoted monarch -was more anxious to learn the faith to which the Scotsman belonged than -to know the merits of his scheme, and that on being informed Law was -not a Catholic, he brushed aside the matter and refused to accept his -services. - -Disappointed, but not discouraged, Law was more determined than ever -to have his system put to practical test. If France did not accept -salvation at his hands, he doubted not some other country would. -He accordingly approached the King of Sardinia, one of the needy -sovereigns of the day. Law’s proposal to him was the establishment of a -land-bank, which he held out in glowing terms as the certain foundation -of great national prosperity, but the wily monarch was not to be drawn, -and with a touch of sarcasm recommended Law again to urge his scheme -upon France. “If I know,” he said, “the disposition of the people of -that kingdom, I am sure they will relish your schemes; and, therefore, -I would advise you to go thither.” - -The close of 1714 saw Law for the third time in Paris. Whether his -return to France was due to the suggestion of the King of Sardinia, -or to his having perceived a possibility of his system being yet -adopted by France, whose crippled financial condition was becoming -more serious as time went on, and demanded some drastic remedy to -relieve the intolerable burden upon the Treasury, we cannot judge. -He probably considered that, with bankruptcy hanging over the French -nation like a grim spectre, necessity, if not conviction, would induce -the acceptance of his theories. The nation’s indebtedness had now -outgrown its resources. Every conceivable device had been resorted to -for the purpose of meeting the most pressing obligations. Provision -for the future was regardlessly sacrificed to the needs of the -moment, and ingenuity was devoted only to keeping the evil day afar -off. Every one feared the worst. No one was able to grapple with the -difficulty in a broad, statesmanlike fashion, and to carry out a bold -policy of national economy. The Treasury had to face the payment of -exorbitant rates of interest upon loans, the full value of which had -not been received. The coinage was debased to an extent altogether -out of proportion to its face value. Lotteries were organised on an -extensive scale as a means of appealing to the gambling instincts of -the community, and as a method of applying indirect taxation without -the hateful element of compulsion. _Billets d’état_ were foisted -upon unwilling creditors in almost unlimited amounts, and formed a -paper currency that had difficulty in changing hands at even 10 per -cent. upon its value of issue. To crown all, titles were sold as mere -articles of commerce, sinecures created with high-sounding designations -that roused the ridicule of the multitude, but helped to provide the -King with money, and monopolies granted to the highest bidder. Yet all -these devices failed their purpose, and the insatiable hunger of the -Treasury was still far from being appeased. Financial paralysis was -creeping over the nation, and threatened the gravest consequences. - -Here was such a field as Law alone could fully appreciate. Fortune at -last seemed about to smile upon him. His star was about to assume a -meteoric brilliance, and to mount towards its zenith with marvellous -rapidity. Circumstances moulded themselves to his successful progress; -and with rare capacity Law took full advantage of every opportunity. -In order to remove as far as possible, social obstacles to his easy -access to Court, he took up residence in a fine mansion, and lived as -a man with unlimited means at his disposal. He entertained, in the -extravagant way that marked his previous visits to Paris, all those -whom he thought he could utilise for his own advancement; and the death -of Mr. Segnior enabled him to marry the latter’s widow, with whom he -had hitherto been living, thus removing the taint of illicitness from -his cohabitation with her, and legitimatising his family. - -Law’s objective was the good favour of the Duc d’Orleans. He recognised -the importance of obtaining the support of the man who promised to -occupy the Regency within a very short time, and who would thus possess -sufficient power to impose upon the Government any scheme towards -which he was favourably inclined. With great prudence Law did not -seem to be over-anxious in the prosecution of his aim, lest he might -induce suspicion as to his disinterestedness. He, accordingly, devoted -himself at first to the entertainment of the Prince by bringing into -play all his varied gifts, and by gratifying his tastes for gambling -and pleasure as far as he was able. “His good address and skill at -play, made him particularly taken notice of by the Regent, who used -to play with him at baggammon, a game the Regent likes mightily, and -Mr. Law plays very well at.” By this process, Law succeeded in placing -his intimacy with the Duc upon a solid foundation, and in securing his -influence when the opportune moment arrived for its exercise. - -Law’s fame as a potential financier of national grasp was at this time -exercising the minds of the British Government of the day. The Earl -of Stair had been newly appointed Ambassador to the Court of France, -and was so impressed with Law’s ability that he recommended him to -Lord Halifax and to Secretary Stanhope as a man who might be useful in -suggesting some means of liquidating the debts of the British Treasury, -which at that time were somewhat complicated and assuming enormous -proportions. On Feb. 12, 1715, Stair wrote to Stanhope:-- - -“... There is a countryman of mine named Law of whom you have no doubt -often heard. He is a man of very good sense, and who has a head fit -for calculations of all kinds to an extent beyond anybody.... Could -not such a man be useful in devising some plan for paying off the -national debts? If you think so, it will be easy to make him come. He -desires the power of being useful to his country. I wrote about him to -Lord Halifax.... The King of Sicily presses him extremely to go into -Piedmont, to put their affairs upon the foot they have already spoken -of. I have seen the King’s letters to Law, which are very obliging and -pressing. I would not venture to speak thus to you of this man had I -not known him for a long time as a person of as good sense as I ever -knew in my life, of very solid good sense, and very useful; and in the -matters he takes himself up with, certainly the cleverest man that is.” - -Shortly before this date Stair had written to Halifax in similar terms, -and received the following reply of date February 14, 1715: - -“I had the honour to know Mr. Law a little at the Hague, and have by -me some papers of his sent to Lord Godolphin out of Scotland, by which -I have a great esteem for his abilities, and am extreme fond of having -his assistance in the Revenue. I have spoke to the King and some of his -Ministers about him, but there appears some difficulty in his case, and -in the way of having him brought over. If your Lordship can suggest -anything to me that can ease this matter, I should be very glad to -receive it.” - -The latter portion of this letter obviously refers to Law’s conviction -of murder by the English courts, which Law had failed to obtain pardon -for. On April 30, 1715, Stanhope replied to Stair in the following -terms:-- - -“Though I have not hitherto, in my returns to your Lordship’s letters, -taken notice of what you have writ to me once or twice about Mr. Law, -yet I did not fail to lay it before the King. I am now to tell your -Lordship that I find a disposition to comply with what your Lordship -proposes, though at the same time it has met, and does meet, with -opposition, and I believe it will be no hard matter for him to guess -from whence it proceeds.” - -Lord Stair’s admiration of Law was very considerable, and so intimate -was their friendship that we find the first entry in Stair’s -Journal upon his arrival as British Ambassador in Paris in 1715 to -be:--“Wednesday, January the 23rd, at night, arrived at Paris; saw -nobody that night but Mr. Law.” Lord Stair’s strong recommendations of -Law to the British Government were based upon his fixed belief that his -services would be of incalculable value. Law, himself, however, was not -by any means anxious that they should be accepted. He saw greater scope -in France for his financial schemes, and therefore, while permitting -these friendly negotiations to proceed, he was somewhat indifferent as -to their result. - -He did not abate, on the other hand, his assiduous cultivation of -the Duc d’Orleans; nor did he fail to please Desmarets, who, as -Comptroller-General was in such a position as likely to become a -powerful support in carrying out his plans. His relations with the -Comptroller-General were also strengthened by the representations made -to him by the Regent to encourage Law as a man whose advice at that -critical period might prove of the utmost value. By his diplomatic -conduct Law succeeded in having his proposal for the establishment -of a land-bank brought under discussion by the Council of Ministers. -The result, however, was again unfavourable, the ground of rejection -of the scheme, according to Stair’s Journal, being that there was no -foundation for such a bank in a country where everything depended on -the King’s pleasure. - - - - -CHAPTER III - - Accession of Louis XV.--National debt of France.--Debasement of - coinage.--Arraignment of tax collectors.--Council of Finances - consider Law’s proposals unfavourably.--Petition for permission - to establish private bank granted.--Constitution of the - Bank.--Its Success.--The “Pitt” diamond and its purchase. - - -[Illustration] - -Louis XIV. died on 1st September, 1715, and was succeeded by his -great-grandson Louis XV., then a mere boy of five years old. The Duc -d’Orleans was called to the Regency, and wielded the power of an -absolute monarch. He brought to his office the singular gifts of a -statesman, and man of affairs, modified by the vices and indifference -of a debauchée. The Duc de Saint-Simon speaks of the “range of his -mind, of the greatness of his genius, and of his views, of his -singular penetration, of the sagacity and address of his policy, of -the fertility of his expedients and of his resources, of the dexterity -of his conduct under all changes of circumstances and events, of -his clearness in considering objects and combining things; of his -superiority over his ministers, and over those that various powers sent -to him; of the exquisite discernment he displayed in investigating -affairs; of his learned ability in immediately replying to everything -when he wished.” No doubt this high estimate is the eulogium of a -courtier, and requires to be discounted to some extent, but, on -the whole, with little modification it may be considered a fair -representation of the abilities of the man who was about to place Law -in practical command of the government of France. - -One of the first, as it also was one of the most important and -pressing, matters to which the Regent’s attention was demanded, was the -financial condition of the country. The adoption of drastic measures -was imperative. The national debt amounted to 3500 millions of livres, -and while the revenue produced 145 millions, the expenditure of the -Government absorbed 142 millions, leaving 3 millions with which to -liquidate interest upon the national debt, or 1-10th per cent. A -deficit of 150 to 200 millions was thus accumulating each year, and -every resource which ingenuity could conceive having long ago been -exhausted, the situation was daily becoming more difficult. The Regent, -shortly after his accession, called a meeting of the Council for the -purpose of devising a means of relieving the intolerable strain. -National bankruptcy was suggested by a few of its members, notably the -Duc de Saint-Simon. The Regent would give no ear to such a course, and -waved the suggestion aside as alike dishonourable and disastrous to all -possibility of good government. No one, however, seemed capable of -offering any plan of permanent value. The schemes proposed were merely -expedients promising temporary relief, and no other policy but one of -despair being apparent at the moment, the Regent was eager for their -immediate execution. - -A commission or visa was appointed to investigate the nature of the -national debt, and, by classifying the claims, to bring order out of -chaos. By methods, in many instances more rigorous than just, the -national debt was reduced by 1500 millions, and interest was made -uniform at the rate of four per cent. Of the 2000 millions at which -the debt now stood, 1750 millions were funded, and the balance of -250 millions was converted into a general floating debt represented -by _billets d’état_. A substantial reduction was thus made in the -amount of interest payable by the Treasury; but, without an increase -of permanent revenue, which, if it were to be accomplished by the -imposition of fresh taxation, neither the Regent nor his Councillors -would face, or without a reduction in expenditure to an extent which -would have rendered the public service inefficient, the solution of the -financial difficulty was as distant as ever. Recourse was accordingly -had to two measures, which served the purpose of the moment. The first -was the old expedient of debasing the coinage. With the ostensible -object of having a new currency with the new king’s effigy, the old -coinage was recalled. The fresh issue, however, was depreciated in -the process to the extent of about 30 per cent., and the Government -profited by the transaction sufficient to liquidate one year’s interest -of the National Debt. The second device for replenishing the Exchequer -was the establishment of a Chamber of Justice, a kind of inquisition -for the investigation of the conduct of the tax-collectors. These men -by their unscrupulous dealings, had come to be regarded as the evil -genii of the French peasantry. Like vampires, they had for years been -sucking the very life-blood of the nation. No redress was open to their -victims, and resistance only had the effect of increasing the burdens -laid upon their shoulders. The institution of the Chamber of Justice -was accordingly received with unbounded joy. Every tax-farmer was -arraigned before this tribunal. The most searching investigation was -made, not only into his own dealings, but also into the dealings of the -hordes of satellites whom he employed to bleed his unfortunate victims. -Where information was withheld, or even where it was suspected that the -information given was tainted with inaccuracy, encouragement was given -to informers by holding out promises of 20 per cent. of any fines that -might be levied. Such a system, of course, was bound to bring evils -in its train as great as those it was intended to remove. A reign of -terror set in amongst the farmers-general. No sympathy was extended to -them by their judges. All confidence in their honesty had long ago been -destroyed. They were already prejudged. No effort on their part could -by any possibility ward off the weight of accusation against them. -Prison accommodation was soon taxed beyond its capacity. Those who were -fortunate enough to escape this Jeddart justice by bribery, by payment -of enormous fines, or by quietly submitting to wholesale confiscation, -left the country as a measure of personal safety. The records of the -period teem with the decisions of the Chamber of Justice and their -consequences. Most of the cases reflect a degree of moral obliquity on -the part of the judges not less than on the part of the accused. We are -told of one instance where a contractor had been taxed, in proportion -to his wealth and guilt, at the sum of twelve millions livres. A -courtier, possessing considerable influence with the Government, -offered to procure a remission of the fine for a bribe of one hundred -thousand crowns. “You are too late, my friend,” replied the contractor, -“I have already made a bargain with your wife for fifty thousand.” -In the course of a few weeks almost the whole of the fraternity had -run the gauntlet of the Chamber of Justice. They had been stript of -their power, their influence and their possessions. The country had -been effectively cleared of their presence, but to comparatively small -advantage. The total fines and confiscations amounted to one hundred -and eighty million livres, of which the Government received only one -half, and its parasites the other. As a consequence, its career was -brought to a close, and with it the ingenious financial devices of the -Council of Ministers. - -Law was an amused spectator of the puerile efforts of the Regent and -his advisers to restore financial stability to their country. He -regarded them no less with scorn, and probably rejoiced in the futility -of their efforts, in the hope that each successive step they took would -bring the realisation of his own ambition within measurable distance. -The position he occupied, however, was one of difficulty, and demanded -a display of considerable tact and judgment. He had educated the Regent -up to the point of implicit confidence in his scheme, but there still -remained a dead weight of opposition in the Council, and without the -support of both the ground was very uncertain. - -No time was lost by Law in an attempt to bring his proposals to a -head. He repeatedly interviewed the Regent within the first few weeks -after the death of Louis XIV., and submitted definite schemes for -relieving the situation. He urged that by the adoption of a system of -paper credit, not necessarily for supplanting, but for supplementing, -the coinage in currency, not only would the trade of the country -increase in volume, but the national debt would be effectively dealt -with. He based his argument upon the principle that the quantity of -money in circulation in a country determines its industrial activity. -Recognising that money, whether it be specie or paper, is not itself -the wealth of a country, but only the measure of its wealth, and -that in whatever form it exists it must represent either the whole -or part of that actual wealth, he conceived the idea of issuing the -notes against the landed property of France, and the ordinary State -revenues. He pointed out, as examples in support of his proposals, -the immense benefits which had flowed from the adoption of a similar -system by England, Holland, Venice, and Genoa. The Regent, convinced -before by Law’s arguments, was now determined to put them into -operation. He convened the Council of Finances, and invited to its -deliberations the principal bankers and merchants of Paris and of the -provinces. The sederunt took place on 24th October, 1715, only eight -weeks after the King’s death, but the Regent had personally interviewed -beforehand several of the members to secure their support for Law. To -this assembly Law unfolded the general outline of his proposals. “He -was listened to as long as he liked to talk. Some, who saw that the -Regent was almost decided, acquiesced; but the majority opposed.” The -precise ground of opposition is nowhere recorded, but probably the -fear, expressed at the former Council in July, had not been dissipated, -that the system would lend itself to abuse at the hands of an absolute -monarch, and might bring in its train greater evils than those it was -intended to remedy. The letters patent of 2nd May, 1716, granting -private banking privileges to Law, refers to the decision of this -assembly, but being couched in the language of official ambiguity, -gives no clue to the reasons which actuated the rejection of the -scheme. “Mr. Law having some time since proposed a scheme for erecting -a bank, which should consist of our own money, and be administered in -our own name, and under our authority, the project was examined in -our Council of Finances, when several bankers, merchants and deputies -from our trading cities being convened and required to give their -advice, they were unanimous in the opinion that nothing could be -more advantageous to our kingdom, which, through its situation and -fertility, added to the industry of its inhabitants, stood in need -of nothing more than a solid credit for acquiring the most extensive -and flourishing commerce. They thought, however, that this present -conjunction was not favourable for the undertaking; and this reason, -added to some particular clauses of the project, determined us to -refuse it.” - -Law was thus foiled again, but weakness of purpose was far from being -a feature of his character. Irrefragable determination steeled him -against all rebuffs. He saw more than ever that France was his last -and only opportunity. He saw that the plastic minds of most of the -ministers were susceptible to the pressure of the Regent’s influence if -applied with sufficient strength. This was not difficult of operation. -The Regent’s influence was at Law’s command, and he made unsparing use -of it. With prudent calculation, however, of the future, should his -plans fail in their object by some mishap, he modified his scheme to -the extent of petitioning for permission to establish a private instead -of a national bank. In order, too, that the members of the Council -and those who would be called to the deliberations in connection with -his proposal should have some more definite and complete knowledge -of his theories than could be conveyed in conversation, or in course -of an address at the Council table, Law translated his book on Money -and Trade, published in Edinburgh in 1705, supplementing what he had -written there by separate papers giving his maturer ideas. - -Early in 1716 every preparation had been made, and all contingencies -provided against. The Regent called again the Assembly of the previous -October. The scheme was solemnly discussed. Opposition dwindled to -a mere shadow. The scheme was passed, and remitted to the Regency -Council for final ratification. This last stage in the process is well -described by the Duc de Saint-Simon, whose opposition not even the -Regent could overcome. - - M. le Duc d’Orléans took the trouble to speak in private to each - member of the council, and gently to make them understand that he - wished the bank to meet with no opposition. He spoke his mind to - me thoroughly; therefore a reply was necessary. I said to him that - I did not hide my ignorance or my disgust for all finance matters; - that nevertheless, what he had just explained to me appeared - good in itself, that without any new tax, without expense, and - without wronging or embarrassing anybody, money should double - itself at once by means of the notes of this bank, and become - transferable with the greatest facility. But along with this - advantage I found two inconveniences, the first, how to govern - the bank with sufficient foresight and wisdom, so as not to issue - more notes than could be paid whenever presented: the second, - that what is excellent in a republic, or in a monarchy where the - finance is entirely popular, as in England, is of pernicious use - in an absolute monarchy such as France, where the necessities of - a war badly undertaken and ill sustained, the avidity of a first - minister, favourite or mistress, the luxury, the wild expenses, - the prodigality of a King, might soon exhaust a bank, and ruin all - the holders of notes, that is to say overthrow the realm. M. le - Duc d’Orléans agreed to this; but at the same time maintained that - a King would have so much interest in never meddling or allowing - minister, mistress, or favourite to meddle with the bank, that - this capital inconvenience was never to be feared. Upon that we - for a long time disputed without convincing each other, so that - when, some few days afterwards, he proposed the bank to the regency - council, I gave my opinion as I have just explained it, but with - more force and at length: and my conclusion was to reject the bank, - as a bait the most fatal, in an absolute country, while in a free - country it would be a very good and very wise establishment. - - Few dared to be of this opinion: the bank passed. M. le Duc - d’Orléans cast upon me some little reproaches but gentle, for - having spoken at such length. I based my excuses upon my belief - that by duty, honour, and conscience, I ought to speak according - to my persuasion, after having well thought over the matter, and - explained myself sufficiently to make my opinion well understood, - and the reason I had for forming it. Immediately after, the edict - was registered without difficulty at the Parliament. This assembly - sometimes knew how to please the Regent with good grace in order to - turn the cold shoulder to him afterwards with more efficacy. - -Letters patent were issued on 2nd and 28th May, 1716, incorporating -the Bank, and three days after the latter date, these letters were -registered in the Parliamentary journals. The Bank was formed under -the name of the General Bank of Law & Company, the principal partners -being Law himself and his brother William. The capital was fixed at -six million livres, a sum approximately equal to £300,000, divided -into 1200 shares of 5000 livres each. The price of the shares allotted -to subscribers was payable in four equal instalments of which only -one required to be in cash, the balance being in _billets d’état_. -The management of the Bank and its general policy was placed in the -hands of the shareholders themselves, the extent of their voting -interest being determined by the number of their individual shares, -each five shares conferring one vote. A bi-yearly audit was to be -made of the Bank’s financial position, and shareholders were to be -convened at least twice a year. The business of the Bank was similar -in its nature to ordinary banking business of the present day, and -wise provision was made against engaging in commercial undertakings. -In short, the regulations were modelled upon the soundest principles -of finance. The one great feature of the Bank, however, and a feature -that displayed Law’s remarkable foresight, because its establishment -was only the first step in the development of his vast designs whose -ultimate accomplishment depended upon present success, consisted in -the character of the note issue. All notes were drawn at sight to -bearer, and were promises to pay in coin of the weight and standard of -the day of issue. Here rested the foundation of the Bank’s phenomenal -success. The coinage had in previous years been subject to sudden and -arbitrary changes of relative value, and consequently its purchasing -power was always of a speculative character. But, further, as the -Government alone secured the profit upon depreciation of the coinage, -each alteration brought with it dislocation of commercial transactions -and indirectly affected the volume of trade of the country. Law’s notes -in a very short time established themselves in the confidence of all -classes. Their value was permanent and unaffected by any fluctuations -in the coinage. Credit business was rendered possible where before -it had been folly. Industry in general experienced the stimulus of -financial stability, and underwent remarkable expansion. The notes, -and not the current coinage, became the medium of exchange, and soon -acquired a value in excess of the specie they nominally represented. To -these advantages Law was careful to add ease of immediate conversion. -Although the capital payable in cash only amounted to £75,000, yet -the large deposits, and the extensive floating business of the Bank, -together with the high estimate in which the notes were held, combined -to make the risk of inability to convert the notes a very remote -contingency. - -In view of all these substantial advantages, the success of Law’s -scheme came in a measure as a matter of course. Business of the most -profitable nature flowed into the Bank. By enabling commercial men to -trade upon their securities at a low rate of interest, not only did -he usurp the functions of the usurer, functions which the bad policy -of the Government had placed in his hands, but the ramifications -of the Bank spread throughout the whole country, and made its -beneficent influences felt in a striking degree. Law himself very -shortly became the supreme protector of industrial prosperity. His -statesmanlike instincts led him to revive many branches of trade which -had degenerated, and to induce the establishment of others for which -he saw the resources of France were eminently suited. In order to -facilitate the business of the Bank he opened in the principal centres -branch establishments which acted both as feeders and as outlets for -the central institution. No one was more surprised than the Regent -himself at the extraordinary measure of success which had attended -Law’s scheme. Law accordingly occupied more than ever a high position -in the Regent’s estimation. He was regarded as the financial saviour of -France, a heaven-sent legislator before whom the hereditary advisers -of the Crown were small and paltry. Law was sufficiently astute to -press the advantage he had gained, and judging from the conduct of -the Duc D’Orleans at this time, he evidently had the latter under his -control. Saint-Simon tells us of the forced interviews he was compelled -by the Regent to grant to Law in order that he might be tutored into -approval, if not appreciation, of the new state of affairs. The wily -courtier was impervious, however, to the blandishments of his tutor. He -only deferred to the wish of the Regent, and merely gave a courteous -acquiescence to the arguments and statements that were showered upon -him. The object of these interviews obviously was to capture the -confidence of Saint-Simon who had been sufficiently courageous on -previous occasions to thwart Law’s designs in face of the Regent’s -wishes, and who might prove an awkward element in accomplishing -the development of his plans for the future. There was, however, a -subsidiary purpose, and Saint-Simon was not slow to recognise it. “I -soon knew,” says Saint-Simon, “that if Law had desired these regular -visits at my house, it was not because he expected to make me a skilful -financier, but because, like a man of sense--and he had a good deal--he -wished to draw near a servitor of the Regent who had the best post in -his confidence, and who long since had been in a position to speak to -him of everything and of everybody with the greatest freedom and the -most complete liberty, to try by this frequent intercourse to gain my -friendship, inform himself by me of the intrinsic qualities of those -of whom he only saw the outside, and by degrees to come to the Council; -through me, to represent the annoyances he experienced, the people with -whom he had to do, and, lastly to profit by my dislike to the Duc de -Noailles, who, whilst embracing him every day, was dying of jealousy -and vexation, and raised in his path, underhand, all the obstacles and -embarrassments possible, and would have liked to stifle him. The Bank -being in action and flourishing, I believed it my duty to sustain it. -I lent myself, therefore, to the instructions Law proposed, and soon -we spoke to each other with a confidence I never have had reason to -repent.” - -Notwithstanding the pressure of work upon Law’s shoulders at this period -when the enormous amount of details consequent upon the establishment -of the Bank required his unremitting attention, he yet found ample time -for indulging in those trifling matters which bulk so largely in the -estimation of a courtier, and, especially if they entail extravagant -expenditure, often cloud his limited horizon to the exclusion of -affairs of greater importance. - -The Duc de Saint-Simon, with a fine eye and a keen judgment for the -dainty trifles of this world, had set his mind upon the purchase -for the King of a priceless diamond which had come into the market -early in 1717. This gem, variously known as the “Pitt” or “Regent” -diamond, possessed a rather questionable history. It had been -discovered in 1701 in the Parteal mines of the Great Mogul by a slave, -who immediately decamped with his precious find to the coast. Here -he negotiated a sale with an English captain, who sold it to the -Governor of Fort St. George, an office held at that time by Thomas -Pitt, grandfather of the first Earl of Chatham. A model of it was made -and shown to Law, who had been approached with a view to using his -influence with the Regent for its purchase. The price, however, was a -stumbling-block, and Law at once requested the assistance of the Duc de -Saint-Simon. The Duc, who was always superior to any trifling financial -difficulty, thought “that it was not consistent with the greatness of -a King of France to be repelled from the purchase of an inestimable -jewel, unique of its kind in the world, by the mere consideration of -price, and the greater the number of potentates who had not dared to -think of it, the greater ought to be his care not to let it escape -him.” Saint-Simon’s record of his interview with the Regent is an -excellent example of the arguments the extravagant spendthrift makes -use of to salve his conscience when any whim is to be satisfied. The -Regent “feared blame for making so considerable a purchase, while the -most pressing necessities could only be provided for with much trouble, -and so many people were of necessity kept in distress. I praised -this sentiment, but I said that he ought not to regard the greatest -King of Europe as he would a private gentleman, who would be very -reprehensible if he threw away 100,000 livres upon a fine diamond, -while he owed many debts which he could not pay; that he must consider -the honour of the crown, and not lose the occasion of obtaining a -priceless diamond which would efface the lustre of all others in -Europe! that it was a glory for his Regency which would last for ever; -that, whatever might be the state of the finances, the saving obtained -by a refusal of this jewel would not much relieve them, for it would be -scarcely perceptible; in fact, I did not quit M. le Duc d’Orléans until -he had promised that the diamond should be bought. M. le Duc d’Orléans -was agreeably deceived by the applause that the public gave to an -acquisition so beautiful and so unique.... I much applauded myself -for having induced the Regent to make so illustrious a purchase.” -Through Law the price was fixed at two millions, or, approximately, -£150,000. So reduced, however, was the exchequer that payment was -impossible at the time, and thus an additional debt was added to an -already over-burdened Treasury. The purchase of the gewgaw was a simple -matter, and Saint-Simon was eminently capable for this portion of the -negotiations. The payment was more difficult, and was postponed to be -dealt with by Law himself. - - - - -CHAPTER IV - - Law’s notes become official tender.--The Mississippi - Scheme projected.--Early explorers of Mississippi - territory.--Establishment of the West India Company.--Its - absorption of depreciated _billets d’état_.--D’Argenson - appointed Chancellor of France, and attempts extinction of - National Debt.--Law innocently involved in D’Argenson’s fatal - scheme.--Saved from arrest by Regent.--The brothers Paris and - an anti-system. - - -[Illustration] - -Less than one year’s operations were sufficient to disclose the -superior value of Law’s Bank as an institution of national importance. -Its remarkable success was not attributable to factitious or ephemeral -circumstances, but to the confidence inspired by the soundness of the -methods upon which its business was conducted. Law’s powerful grasp of -financial principles, and his striking capacity for their practical -application, were evidenced in the masterly manner that characterised -his management at this period. If anything was wanting to its complete -success, it was recognition by the Government of the Bank as the -official channel for the national revenues to reach the Treasury. This -came before the first year expired. On 10th April, 1717, the Council -decreed that the tax collectors should treat Law’s notes as legal -tender at their full face value. The effect of this, of course, was to -extend the demand for so stable a medium of currency to districts as -yet outside the sphere of the Bank’s operations. Law’s position was now -one of the first magnitude. So far-reaching was his influence that the -industrial welfare of France was bound up to a large extent with his -fortunes, and would have been seriously menaced by its withdrawal. The -stimulus of his activity was felt throughout the whole country, and -secured for him the greatest authority and respect. - -Law now considered himself in a position to develop another stage -at least of his great scheme for the commercial regeneration of -France. Not only was the moment opportune, but the principles he -had been advocating in theory had operated so well in practice that -he entertained no doubt that certain success would follow his new -enterprise. Credit, and especially that phase of credit represented in -paper currency, was capable, in his opinion, of unlimited expansion so -long, at least, as there was an apparent foundation of security. With -an available cash capital of only £75,000 he had been able to float -and to give stability of value to 60,000,000 livres, or approximately -£4,500,000. Why, therefore, not centralise the whole wealth of France -and establish upon it a huge currency of notes, by means of which -industrial growth and prosperity would be fostered? - -Dominated by this one purpose, he projected his famous Mississippi -scheme during the summer of 1717, a scheme which was at once to raise -him to the highest pinnacle of fame and to prove his undoing. - -[Illustration: LA SALLE, - -The French Explorer of the Mississippi territory from 1676 to 1682.] - -France at this time possessed the vast American territories which are -watered by the Mississippi. In 1674, Jolliat, who had been sent by the -Count de Fontenac to discover if possible a passage through the Bay of -California into the South Sea, came upon the great river, but did not -attempt to explore it. This was accomplished by La Salle, one of the -greatest French explorers of the American continent. He went out two -years after Jolliat, and after many adventures and hardships, succeeded -in navigating the Mississippi to its mouth, where he set up the French -flag on 9th April, 1682, claiming the whole of the vast territory he -had traversed for his native country. On making known his success to -Louis XIV., he was furnished by that monarch with three ships and a -man-of-war for the purpose of establishing a French colony in the -region he had annexed, in order to establish the right of France to -the newly-acquired territory. Unfortunately, La Salle was unable to -again locate the mouth of the Mississippi, and, after several months of -vain wanderings in quest of his destination, he was murdered by some -of his followers, who had been exasperated by his ineffectual efforts, -and goaded into revolt by his harsh and domineering disposition. -D’Iberville, a French Canadian, who took up the task of exploration -in succession to La Salle, enjoyed, however, greater success, and -erected a French fort at the mouth of the river in 1712. - -As yet no actual development of resources had been seriously attempted, -but the glowing account of the vast riches of Louisiana given by -D’Iberville had the effect of inducing a wealthy merchant, by name -Antoine Crozat, to acquire the monopoly of its trade and of exploiting -its natural wealth. Louis XIV. granted him this privilege for a period -of sixteen years from 1712. Whether by bad management, by bad fortune, -by reason of the vastness of the undertaking, or by a combination of -all three circumstances, Crozat, soon found he had entered upon a task, -the magnitude of which was altogether beyond his capacity. In 1717, -accordingly, he endeavoured to get rid of the burden he had so easily -assumed, but could not so easily throw off. He naturally turned to -Law, the man who loomed so large in the world of speculation, the one -man who seemed able to evolve success from failure. Law regarded with -favour the advances made by him, and created no little astonishment -by announcing his decision to take over the monopoly and privileges -which hung like a mill-stone round Crozat’s neck. He intimated his -decision to the Regent, and explained the course he intended to pursue -in the development of his new proposal. The Regent, who was of course -controlled in all financial matters by Law, was readily willing to -comply with his wishes and countenanced the vigorous prosecution of -the scheme. - -In August, 1717, by letters patent, a trading corporation under the -name of the West India Company was established. To it was given a grant -of the whole of Louisiana, and for a period of twenty-four years from -1st January, 1718, it was to possess the sole rights of trading with -the colony, and the company was generally to regard the undertaking -as a huge commercial enterprise, in the management of which they -would not be trammelled by State interference. For these privileges -no payment was made to the State, but no act was to be allowed which -might prejudice the sovereignty of France in Louisiana, and the company -was under an obligation to furnish at its own expense all necessary -military and naval protection. The capital of the company was fixed at -100 million livres, divided into 200,000 shares of 500 livres each. - -Although no price was payable to the State for the apparently valuable -rights acquired by the company, the ingenuity of Law had devised an -indirect consideration of great importance. We have already seen how -the Bank had absorbed depreciated _billets d’état_ at their face value -to the extent of 4½ millions. But a bolder stroke was now conceived -by Law. It was no less than to make the whole of the share capital of -his new company payable in the State notes, which were then standing -at a discount of 65 per cent. These _billets d’état_ formed part of -the converted stock of the previous year, and bore interest at the -rate of 4 per cent. The company scrip which was given in exchange for -the _billets d’état_ was charged with a fixed permanent interest at -the same rate, and in addition a contingent interest dependent upon -the profits of each year. The effect of this financial juggle, was on -the one hand, to transfer a twentieth part of the national debt from -the State to a private company, and, on the other hand, to reduce the -number of the nation’s creditors by several thousands. The advantage -was primarily in favour of the State, and as will be seen later, was -the first step towards the total extinction of the nation’s paper then -in currency, by a method which in reality was repudiation of liability, -though at this stage it could not have been foreseen as such either by -Law or by the Regent. - -The influential position to which Law had now attained was naturally -productive of great heart-burning, not only amongst those whose power -he had virtually usurped, but also amongst the army of tax-farmers -whose opportunities he had seriously curtailed. D’Aguessau, the -Chancellor of France, was particularly envious of Law, and had used all -his influence with the Regent against the new regime. Law, however, was -paramount in the Regent’s favour, and secured the summary dismissal of -the undesirable Chancellor. In January, 1718, D’Argenson, Lieutenant of -Police, a weak and pliable creature, was installed in his place, and a -pretext was also discovered for requiring the resignation of the Duke -of Noailles, chief of the Council of Finance, in order to combine the -two offices in the person of D’Argenson. These appointments practically -left the Government in the hands of the Regent, Law, and the Abbé du -Bois, the Minister for Foreign Affairs. The elevation of D’Argenson was -a move on the part of Law to secure the adoption of all his suggestions -without encountering the opposition he would have met at the hands -of a strong and independent Minister. His duties were to be merely -clerical, and his services were to be at all times at the command of -Law. D’Argenson, however, was of a suspicious disposition. Accustomed -to being his own master in his former office, and active, though -somewhat officious, in the administration of its functions, he fretted -under the domination of his imperious master. He had been accustomed to -the flattery of the great, and had become imbued with a sense of his -own importance. To assume a position of inactivity, and to be deprived -of all authority, were conditions much too humiliating to the self -important Chancellor, and he endeavoured to surround his new office -with an air of fictitious responsibility. While Lieutenant of Police -he had been accustomed to give audiences at all times of the night -and day, and this furnished him with an idea as to the possibility -of impressing the people with the false notion that he was more than -ever immersed in public business. He made appointments at the most -inconvenient hours, mostly after midnight or in the early morning, and -those who were favoured with admittance carried away an exaggerated -idea of the tremendous load of responsibility upon the shoulders of the -new Chancellor, from a pre-arranged theatrical display of work in which -he might be seen dictating to innumerable secretaries in the midst of -a veritable ocean of papers and documents requiring attention. So far, -indeed, did he carry this ludicrous performance, that he is said to -have driven through the streets in the evenings with a lighted carriage -in order to maintain the appearance of requiring to employ every moment -of the day for overtaking the stupendous volume of work. - -Behind all this mummery, however, there was a determination in the mind -of D’Argenson to counteract the influence of Law, if not to supersede -him altogether. With this object in view he conceived a bold plan -for outbidding Law in his financial proposals. This was no less than -the extinction of the floating national debt, and the means for its -accomplishment was depreciation of the coinage. Law had provided for -the absorption of 100 million livres in his Western Company, so that -D’Argenson had set himself the task of taking up the balance of the -State notes, amounting to 150 millions. His proposal was not only of -the crudest, but it displayed an utter disregard for the industrial -interests of France, and even he could not fail to have been impressed -with the highly injurious effects upon trade of arbitrarily tampering -with the currency. He secured, however, the adoption of his proposal, -and on 10th May, 1718, a decree was issued debasing the coinage to -the extent of 50 per cent. upon the depreciation which took place in -December, 1715. The silver marc was now raised from 40 to 60 livres, -and the crown piece of 3 livres 10 sous, which weighed one ounce -in 1715, now weighed less than half an ounce. In anticipation of -his scheme, D’Argenson had purchased very cheaply a large quantity -of silver for coinage purposes, and the Mint now issued 60 livres, -weighing 8 ounces, in exchange for 48 livres of the old coinage and -12 livres in _billets d’état_. In order, therefore, to absorb all the -floating paper, D’Argenson required to issue 750,000,000 livres, upon -which the State realised a profit of 250,000,000, so that after the -cancellation of the notes there would therefore have remained a balance -of 100,000,000. This high-handed proceeding created a deep feeling of -resentment throughout the community, and Parliament, deferring to the -wishes of the traders and of those who were affected by the change, -issued on 15th June a decree practically annulling the whole of the -new coinage. The Regent, whose authority was thus threatened, was in -despair. He endeavoured to stem the tide of opposition by ordering -the destruction of all copies of the decree, and forbidding its -publication. Not to be outdone, however, the Parliament employed the -services of men who were willing to expose themselves to the risk of -being shot down by the soldiery whilst engaged in placarding the decree -all the city of Paris. From Paris the opposition spread throughout the -whole of France, and became almost revolutionary in its intensity. - -Law’s position had now unexpectedly become precarious. The outcry was -directed towards him no less than the Regent, and D’Argenson, the real -initiator of the fatal policy, was unconnected in the public mind with -the agitation. Parliament, in the exuberance of its temporary success, -resolved upon further measures. It instructed the collectors to refuse -payment of taxes in bank notes; it prohibited all foreigners from any -share in the management of the national finances; and it withdrew the -privileges of the bank in so far as these related to the administration -of the Treasury. The climax was reached when Law was charged with the -instigation of all the disastrous effects of D’Argenson’s policy, and -was under immediate danger of being arrested and forthwith hanged at -the gates of the Palais de Justice. - -It was now imperative that something should be done by the Regent. -He felt that not only was he bound to save his favourite, but that, -if Parliament were allowed without check to pursue its will, he also -would lose his authority and mastery over the realm. Accordingly, -a consultation was held on 19th August at the house of the Duc de -Saint-Simon. “In this conference at my house the firmness of Law, -hitherto so great, was shaken, so that tears escaped him. Arguments -did not satisfy us at first, because the question could only be -settled by force, and we could not rely upon that of the Regent. The -safe-conduct with which Law was supplied would not have stopped the -Parliament an instant. On every side we were embarrassed. Law, more -dead than alive, knew not what to say; much less what to do. His -safety appeared to us the most pressing matter to ensure. If he had -been taken, it would have been all over with him before the ordinary -machinery of negotiation (delayed, as it was likely to be, by the -weakness of the Regent) could have been set in motion; certainly, -before there would have been leisure to think of better, or to send -a regiment of Guards to force open the Palais de Justice; a critical -remedy at all times, and grievous to the last degree, even when it -succeeds; frightful, if instead of Law, only his suspended corpse had -been found!” - -Law, knowing the intensity of feeling with which Parliament was -moved, and the certainty of their threat being carried out should -they succeed in arresting him, was greatly concerned for his personal -safety. A secure and ready asylum was at hand. The Regent placed -at his disposal a chamber in the Palais Royal, an astute move on -the part of those who suggested it, not only because it removed the -possibility of Law’s arrest, but because it would have the affect of -strengthening the Regent’s determination to undermine the authority -of that insubordinate assembly. The suggestion emanated from the Dukes -de Saint-Simon, and De la Force, and Fagon, one of the counsellors of -state, all three virulent opponents of Parliamentary institutions. -The presence of Law in the royal palace and the inadvisability of -surrendering him to the tender mercies of the irate House were both -strong incentives to the Regent to act at once with decision so as to -secure the freedom of the powerful financier. A Bed of Justice was -agreed upon by the Regent and his advisers as the only possible means -of annulling the decrees of 15th June. The difficulties, however, in -the way of its being held were great and required the utmost tact and -secrecy. The Duc de Maine, suspected as the prime instigator of the -parliamentary resolutions, and the Marechal de Villeroy, a servile -supporter of all the former’s proposals, were regarded as possible -successful opponents of a session of a Bed of Justice. Both were -guardians of the young king, and as his presence was necessary to -setting the seal of authority to the results of the deliberations -of this body, the Regent feared they would place obstacles in the -way. But the Duc de Saint-Simon was equal to the emergency, and, in -his own voluble and consequential way, has recorded with much detail -the measures he adopted for carrying out the proposal. He assumed -responsibility for all the arrangements, and with gossipy fulness tells -how he prepared for holding the Bed of Justice at the Tuileries, -keeping it a profound secret until the very morning it was to be -convened, and how the summons to attend was only to be issued a few -hours before. The precautions although somewhat elaborate were all -required. The step was highly critical for the Regent. It involved not -only the recognition of his authority as Regent, but, in the event -of its being unsuccessful, his deprivation of the Regency itself. In -short, it could only be justified by a successful conclusion, a result -which was ultimately attained, although by means of a high-handed and -arbitrary nature. Throughout the whole of the proceedings, the Regent -displayed a firmness and resolution which can only be attributed to -the desperation of his position. They were sufficient, however, to -the end he had in view, although by no means features characteristic -of his general conduct. The Parliament was over-awed; the decree was -abrogated; and Law once more regained his freedom. Thus was Law the -innocent instrument of the degradation of the French Parliament, and -the establishment of a despotism oriental in its thoroughness and -far-reaching in its effects. - -Law’s escape from the violent intentions of the angry Parliament was -however but a prelude to other difficulties and opposition. D’Argenson, -smarting under the feelings of jealously engendered by the subordinate -position he was compelled to play to a foreigner, and actuated by an -exaggerated conceit of his abilities, conceived the notion of meeting -Law on his own ground and damaging the importance of the latter by the -adoption of a scheme which might supersede Law’s by its brilliance and -attract to himself the admiration of the financial world. Depreciated -securities issued by the various government departments were afloat -to incredible amounts. Their value was purely speculative, and any -tendency to fluctuation was usually downward, so that unfortunate -holders were always uncertain of the extent to which they might be -calculated as realisable assets. Here was the groundwork of a scheme -for the display of financial genius which might eclipse the schemes -of Law by converting them at face value into securities of a more -substantial and liquid character. The idea of conversion was of course -merely an adaptation of Law’s methods, but D’Argenson was bent on -something less speculative, and so far as prospects were concerned, -less remote, if not less illusory, than the Mississippi Scheme. He -found ready instruments for his purpose in the four brothers Paris, -great government contractors, men of considerable wealth, but most -unscrupulous in the manner of their dealings. Not only were they -envious of Law, but they feared a restriction of their own field of -operations should his influence be left unchecked. With them therefore -D’Argenson conspired in the initiation of a bold Anti-Système. - -Their scheme was the formation of a company to take over a large -proportion of the national revenues, and in payment of the shares, of -which there were 100,000, of 1000 francs each, to take the depreciated -securities of the public service at their full value. This company -was to guarantee a revenue of 48 millions per annum, derivable from -the sources of taxation allotted to them, and the treasury were to -hold in security of their carrying out their obligation the 100 -millions of depreciated securities which the company would absorb. The -company would of course proceed in the manner usual to all farmers of -the public revenue, and exact from the public taxation exorbitantly -in excess of what was payable to the treasury. D’Argenson and the -brothers knowing that the holders of the depreciated securities were -thoroughly acquainted with the profitable nature of the business in -which the company was to engage would only be too ready to convert -their securities into the company’s shares. The brothers Paris had a -reputation for want of any quality of mercy in the levy of taxation, -and the shareholders would require no assurances as to the probable -returns upon their investments or as to the probable permanence of -these returns. Alluring advertisements in praise of the company’s -sources of income were quite unnecessary as in the case of the -Mississippi scheme projected by Law. These unfortunately were patent to -every one, but fortunately for those who would have been the victims -of such a scheme, and fortunately also for the country at large, -already suffering sufficiently from the insatiable rapacity of the -tax-gatherers, the formation of the company did not commend itself to -the Regent and his advisers, so once more Law was delivered from the -jealousies of his rivals. - - - - -CHAPTER V - - Exaggerated accounts of resources of Louisiana.--Law’s judgment - at fault--His ultimate aim.--He creates an artificial rise - in the value of Company shares.--His unsuccessful efforts - to gain influence over Saint-Simon.--Acquisition of Tobacco - monopoly.--Absorption of other companies.--Reconstitution - of West India Company.--Parliamentary opposition - overcome.--“Mothers” and “Daughters”.--Excited speculation in - shares.--Issue of notes to colonists.--A pioneer’s account of - Louisiana. - - -[Illustration] - -Law was now free to direct his thoughts to the business of the bank and -the development of his original ideas with reference to the West India -Company. Although the latter had been established in August, 1717, -nothing had yet been accomplished in the direction of actual business. -The capital had been issued to an over-eager public, but unless a -revenue were forthcoming the consequences would be grave for its -originators. It was not sufficient that the flourish of trumpets with -which he heralded the boundless possibilities of wealth of the vast and -unknown territories of the Mississippi should die away with its last -faint echoes. He must at once give evidence that the promises would -bear fruit. The situation was difficult, but his ingenuity was equal -to the task imposed upon him. - -Since the establishment of the company, France had been deluged -with books, pamphlets, engravings, and all kinds of advertisements -and prospectuses descriptive of the extent and wealth of Louisiana. -Exaggerated accounts were published of its riches, of its mineral -resources, and of its people. One picture would exhibit mountains -declared to be “full of gold, silver, copper, lead, and quicksilver. -As these metals are very common, and the savages know nothing of -their value, they exchange lumps of gold and silver for European -manufactures, such as knives, cooking utensils, spindles, a small -looking-glass, or even a little brandy.” Another, designed to invest -the natives with a highly religious disposition, would show them -performing humble obeisance to the priests, and have accompanying -letterpress to the effect that “the idolatrous Indians earnestly pray -that they may receive baptism. Great care is taken of the education of -their children.” - -Glittering accounts such as these appealed to the speculative instincts -of everyone. All sorts and conditions of people sold their lands and -purchased shares; ships were bought to carry intending emigrants; and -transportation was substituted for all other penalties for criminals in -order that a supply of manual labour might be furnished in opening up -the newly acquired territories. Louisiana however was to prove a bitter -disappointment to those who expected to find a country where hardships -and difficulties were absent, where without trouble or labour fortunes -were to be amassed in the shortest time, and where without stint the -pleasures and luxuries of home could be enjoyed to the fullest. - -The brilliant pictures that were drawn of the capacities of Louisiana -were undoubtedly largely exaggerated so far as its condition was at -the time. With the knowledge of subsequent years they were however -substantially accurate, but the development of these capacities -required the expenditure of vast sums of capital and the lapse of many -years of hard and continuous labour of an imported population. The -concessions made to the company on its incorporation were of enormous -ultimate value, and under different conditions, conditions which -would have imported fewer elements of speculation and introduced more -administrative patience and moderation, might have proved a national -asset of great importance instead of a disastrous enterprise the -magnitude of which had the effect of paralysing for several generations -the commercial and industrial stability of France. The concessions -were co-extensive with virtual sovereignty over the vast territories -included in the grant, and unlimited freedom of administration was -conferred. - -While it is evident that Law anticipated that Louisiana would in -reality be a possession which would yield to his company a large -annual revenue and prove an exceedingly profitable investment to its -shareholders, it is equally evident that he recognised that this -result could not be accomplished at once. He was probably mistaken -as to the length of time that would be required, and, if so, he was -only guilty of a fault of judgment attributable to the inadequacy of -contemporary knowledge of these far distant lands as well as to the -fact that experience of developing companies, such as the Western -Company, was then in its extreme infancy. Until operations could -proceed on a sufficiently extensive scale, the only immediate income -derivable by the company consisted of the annuities payable by the -Treasury, the amount of which was equivalent to interest at the rate -of four per cent. upon the 100 million livres of State notes absorbed -at the time of incorporation. From the fact that the first year’s -annuities of four million livres were to be devoted to the general -purposes of the company, and that the succeeding years’ annuities were -to be placed to the dividend fund, it would seem that Law was under the -impression that he could sufficiently develop the company’s territories -within a year to admit of further drafts upon the treasury payments -being unnecessary. - -On the other hand, the Western Company was but one element in the -ultimate scheme which Law was ambitious to attain. His aim was to -embrace in one vast undertaking not only the whole foreign trade of -France, but also the large revenue departments of the government, -such as the mint, and the collection of the national taxation. To -these would be added the Bank, the success of which, in its present -form, was now assured and had inspired the confidence of French people -and foreigners alike. With these under one control, and all working -together with one definite purpose, national prosperity might be -placed upon a sound practical basis, trade in general be fostered and -guided along lines of greatest development, and the circulation of -money be more ample by the issue of notes to the extent of the real or -approximate value of the incorporated assets. - -During the early months of 1718, accordingly, he was engaged in laying -plans for the acquisition of several monopolies and companies then in -existence, but, by reason of indifferent management, not productive to -their fullest capacity. In the meantime, however, the public required -consideration at his hands. The shares of the Western Company were -at a discount of 50 per cent., and he foresaw the necessity before -proceeding further of adopting measures to create a rise in their -value to par at least, and if possible to a premium. His proposals -would demand further appeals to investors, and their decision would -inevitably be determined by the value in the open market of the stock -he had already launched. The method he pursued to bring about this -object was as ingenious as it was original. He offered to buy at six -months’ date in practically unlimited quantities shares of the Western -Company at the minimum price of par and in many cases at a price in -excess of par to the extent of 20, 30, and even 40 per cent. This -proceeding naturally roused intense excitement, coming as it did from -the prime mover in all the great financial operations which had so -recently been agitating the community and been promising so great -results. The consequence was as Law had hoped. The value of the shares -was revived, the public were eager to join in the speculative fever -that was produced, and Law not only employed their eagerness to his -own advantage but succeeded in spreading and strengthening his already -marvellous influence. - -While Law was publicly carrying through transactions in such a manner -as to rouse enthusiasm and inspire confidence in his projects, he was -also at the same time engaged in securing by every possible means the -good offices of those in high places without whose favourable support -his plans would not likely reach maturity. The Duc de Saint-Simon -reveals the nature of the efforts by which Law endeavoured to engage -the good opinion of himself and others. “Law,” he says, “often pressed -me to receive some shares for nothing, offering to manage them without -any trouble to me, so that I must gain to the amount of several -millions. So many people had already gained enormously by their own -exertions that it was not doubtful Law could gain for me even more -rapidly. But I never would lend myself to it. Law addressed himself to -Madame de Saint-Simon, whom he found as inflexible. He would have much -preferred to enrich me than many others, so as to attach me to him -by interest, intimate as he saw me with the Regent. He spoke to M. le -Duc d’Orléans, even so as to vanquish me by his authority. The Regent -attacked me more than once, but I always eluded him. At last, one day -when we were together by appointment at Saint Cloud, seated upon the -balustrade of the orangery, which covers the descent into the wood of -the goulottes, the Regent spoke again to me of the Mississippi, and -pressed me to receive some shares from Law. - -“The more I resisted the more he pressed me and argued. At last he -grew angry, and said that I was too conceited, thus to refuse what the -king wished to give me (for everything was done in the king’s name), -while so many of my equals in rank and dignity were running after -these shares. I replied that such conduct would be that of a fool, -the conduct of impertinence, rather than of conceit; that it was not -mine, and that since he pressed me so much I would tell him my reasons. -They were, that since the fable of Midas, I had nowhere read, still -less seen, that anybody had the faculty of converting into gold all -he touched; that I did not believe this virtue was given to Law, but -thought that all his knowledge was a learned trick. A new and skilful -juggle, which put the wealth of Peter into the pockets of Paul, and -which enriched one at the expense of the other; that sooner or later -the game would be played out, that an infinity of people would be -ruined finally, that I abhorred to gain at the expense of others, and -would in no way mix myself up with the Mississippi Scheme. - -“M. le Duc d’Orléans knew only too well how to reply to me, always -returning to his idea that I was refusing the bounties of the king. -I said that I was so removed from such madness that I would make a -proposition to him, of which assuredly I should never have spoken but -for his accusation. - -“I related to him the expense to which my father had been put in -defending Blaye against the party of M. le Prince in years gone by; how -he had paid the garrison, furnished provisions, cast cannon, stocked -the place, during a blockade of eighteen months, and kept up, at his -own expense, within the town, five hundred gentlemen whom he had -collected together; how he had been almost ruined by the undertaking, -and had never received a sou, except in warrants to the amount of five -hundred thousand livres, of which not one had ever been paid, and -that he had been compelled to pay yearly the interest of the debts he -had contracted, debts that still hung like a millstone upon me. My -proposition was--that M. le Duc d’Orléans should indemnify me for this -loss, I giving up the warrants, to be burnt before him. - -“This he at once agreed to. He spoke of it the very next day to Law; my -warrants were burnt by degrees in the cabinet of M. le Duc d’Orléans, -and it was by this means I was paid for what I had done at La Ferté. -M. le Duc d’Orléans also distributed a large number of the Company’s -shares to the general officers and others employed in the war against -Spain.” - -Law was by these means assured of the certainty of his coming proposals -meeting with public approval, and the only step now remaining was to -mature as speedily as circumstances would permit the arrangements he -had been busily negotiating with the Regent and his advisers on the one -hand and with the companies and the lessees of the various monopolies -on the other. - -The Tobacco monopoly was the first of the privileges to be acquired -by the company. Although by no means an extensive trade, it was -an important and lucrative one. The transfer was effected on 4th -September, 1718, under burden of an annual charge of 4,000,000 livres -payable to the king. Shortly after, arrangements were completed for the -absorption of the Guinea Company, whose business was largely composed -of slave-dealing on the West Coast of Africa. This was finally carried -through on 15th December of the same year. Then came the fusion of the -French East India Company, established in 1664 by Colbert, and also -a dormant monopoly issued in 1713 conferring the sole privilege of -carrying on trade with China. - -The company was now assuming bulky proportions, and a re-arrangement of -its capital was necessitated by the requirements of its wide and varied -interests, and by the prospect of still further acquisitions under -negotiation. Accordingly in May, 1719, a decree was published which -conferred upon the Company the new and more pretentious title of the -Company of the Indies; permission was given to increase the capital; -and to the rights already possessed was added the monopoly of trade -“from Guinea to the Japanese Archipelago, of colonising especially the -Cape of Good Hope, the East Coast of Africa, that which is washed by -the Red Sea, all the known islands on the Pacific, Persia, the Mougal -Empire, the Kingdom of Siam, China, Japan, and South America.” The -increase of capital was fixed at 27,500,000 livres divided into 50,000 -shares of 550 livres each, payable in monthly instalments of 27½ livres -per share. - -The magnitude of these transactions was now so great and unprecedented -as to blind the public entirely to all other considerations, and -enthusiasm for the foreigner was more than ever highly pitched. A mad -scramble soon ensued for possession of shares which would produce so -handsome returns as those promised by the great financier. Dividends of -200 per cent. were indicated as certain to accrue from the company’s -operations, and it is said that no fewer than 300,000 applications for -shares were received from eager crowds of speculators. An unfortunate -hitch, however, postponed the allotment to successful applicants. -Parliament was still unwilling to follow Law into all his schemes. -They were always ready to place obstacles in his path. Accordingly -the decree authorising the issue of additional capital was refused -endorsement, and six weeks elapsed before the difficulty could be -removed. This untoward incident, however, by no means dampened the -ardour of Law or of the general public. The previously issued shares of -the company which Law had been himself under necessity of converting -from a discount to a premium were now in so great demand that they -rose without his interference in the market. Artificial gave way to -natural inflation of value through keen competition from without, and -Law with that capacity for using every advantage with quick and ready -skill turned the public feeling to immediate account. On 20th June -he placed an absolute condition upon the acquisition of the newly -authorised shares. With the ostensible object of laying down a standard -for distribution of the new shares amongst applicants, but really -of maintaining and if possible of increasing the price of the old -shares, he expressed his intention of allotting the new shares in the -proportion of one to four of the old shares held by the applicant. The -purchase of the requisite amount of the original issue was a necessary -preliminary to a favourable consideration of a further subscription. -A great demand for original shares at once followed the issue of this -decree, and accordingly the prices rose to double their face value -within a comparatively few days. These shares were popularly known as -the _Mothers_ and the shares of the new issue as the _Daughters_. The -excitement and competition was intense. The whole business of Paris -seemed to be concentrated on the purchase and sale of Indian stock. -From the highest down through every grade of the community to the -lowest, every one talked and thought of nothing else. Visions of untold -wealth were conjured up by rash participants in the race of reckless -speculation, and the good fortune of many adventurers only served to -stimulate those who as yet lagged far behind. - -Forbonnais describes the effect of the decree. “When no more -_daughters_ were to be found, the western shares were sought for at any -price. They were bought for ready money, or on credit with a premium on -the price agreed on. Some sold so as to make sure of a large profit, -and then seeing that the shares still went up, bought again. In such a -state of fermentation, the quickness of the transactions did not admit -of the employment of coin; the note was preferred to it; and so that -the public might not want _that_, they did not put too high a price on -it.” - -On the other hand, the absolute confidence which the Regent placed -in the Mississippi Company, and his strong intention to render every -assistance to the new colonists in the development of its resources, -are seen in his consistent attitude of approval of all Law’s proposals -at this period. One of the difficulties with which the colonists had -to contend was the absence, or at least scarcity, of a medium of -exchange. Barter was much too cumbrous and inconvenient a method of -exchange, and operated as a serious check upon freedom of commerce. -Law’s solution was the issue of bank notes. The Royal Charter granted -at this time made provision for this, and the grounds upon which the -Regent, in name of the King, authorised the issue, although probably -inspired by Law himself, show also the steps the company were taking -for the exploitation of its territories. “The King having by his -Letters Patents of the month of August, 1717, established a Trading -company, under the name of the West India Company; and by his edict of -May last, remitted to the said Company the trade to the East Indies -and China; His Majesty sees with great satisfaction that that Company -takes the best measures for securing the success of its establishment; -that they send a great number of inhabitants to the country Louisiana, -which was granted them; that many private persons make settlements -in that colony, and send thither husbandmen, tillers, and other -handicraftsmen, to manure and improve the land, sow corn, plant -tobacco, breed silk-worms, and do whatever is necessary to improve the -country. Furthermore His Majesty being informed that the said Indian -Company is at great charge for transporting the said inhabitants, and -furnishing the colony with meal and other necessaries, until the land -affords a sufficient quantity of provisions for their subsistence; -that the company sends thither all sorts of goods and merchandise, to -render the life of the inhabitants more comfortable; and that for -preventing of abuses, too frequent in colonies, they have taken care -to settle the price thereof at a moderate rate, by a general tariff, -which dispositions have appeared so wise and necessary that His Majesty -is resolved to favour the execution thereof; and knowing that the -exchanging of goods not being sufficient to carry on commerce in its -full extent, it is necessary in the beginning of establishments of -this nature, to give them all possible protection and countenance, -His Majesty is resolved to supply the said company with a sum of -bank bills, to enable the inhabitants of Louisiana to trade amongst -themselves, and bring into France the fruits of their labour, industry -and economy, without any risk or charge.” - -The effect of the deep interest taken by the Regent in the fortunes -of the Company was twofold. It inspired confidence in the mind of -the public at home. Of that and of its results special mention will -require to be made. It also directed the eyes of suitable colonists to -the new El Dorado, and set in motion a stream of emigration from the -shores of France. Expeditions were fitted out by Law, and for these -numerous vessels were both purchased and built. Everything was done -on a scale in keeping with the dignity and magnitude of the Company. -One of the pioneers, writing in 1721, has left on record an account of -his experiences. The faintheartedness, however, which determined his -speedy return, can hardly be attributed to his having been misled as -to the character of the country, as he would wish us to believe, but -rather to disappointment that the riches in quest of which he had gone -could only be acquired by strenuous labour and after suffering many -privations. “Our first embarkation for the Mississippi was at St. Malo; -we were twelve ships, and carried with us agents, clerks, labourers, -some troops, and provisions. After a tedious voyage, we arrived at -Hispaniola, in the bay, and took Pensicola from the Spaniards on the -Continent, being necessary for securing our navigation into the river, -it lying almost at the mouth of it; the bay, which makes the mouth -of the river Mississippi, is wider than from Orfordness to the North -Foreland, and fuller of banks and shoals; so that it is very difficult -for ships of any burthen to get into it, without very skilful pilots, -of which there are none as yet; it hath three large openings, and one -can hardly judge which is the mouth, though they all three come out of -it, except by Mons. D’Ibberville’s Fort, which one hardly sees, till -you are just upon it. After you have got into the river, it is still -very shoal, though broad, till you get up to Monsieur D’Ibberville’s -second Fort, at both of which we are to begin our factories and carry -them higher, as our people increases. Our Fort lies in about 28 degrees -of latitude; the country is prodigiously sandy; and, I must say, they -might as well have sent us to the deserts of Libia, or Barco, to have -settled a colony, as thither; we met with no inhabitants near the -sea-side, nor indeed for a great many leagues up the river; if you -believe some people from Canada, that came to us, their navigation -down this river was from 42 degrees to 28, directly south and north; -the mountains, water-falls, on the way from Canada, and lakes are -incredible; one lake, called Illinois, is so large, that they sailed 40 -leagues over it. The different nations up the country, running along -the back of the English plantations, I leave to others to describe, -that is no part of my business; but the Iroquois, who we were told in -France were the inhabitants, are not within a thousand miles of it, -nor any other inhabitants. I saw for many hundred miles but here and -there some straggling Indians, natives of Florida, and poor, innocent, -harmless people. I went up the river in a canoe for some hundred of -miles, without seeing the country mend, and after three months stay -embarked again for France.” - - - - -CHAPTER VI - - Company acquires right of coinage.--Issue of fresh stock and rise - in price.--Attempts made to discredit Law.--Stair’s account of - the situation.--Law defeats the anti-scheme.--The concluding - proposal of his schemes.--The Company’s capital and sources of - revenue.--Report of directors for 1719.--Law’s bank converted - into a Royal bank against Law’s wish.--The Regent divests - notes of the bank of their most valuable features.--Provincial - branches established.--Restriction of gold and silver - tender.--Extravagance of successful speculators. - - -[Illustration] - -The Indian Company had only yet touched the fringe of the monopolies -Law intended it to embrace. It had embarked upon a sea of dazzling -speculation, but its journey was only at its commencement. Its -destination, however, was by no means uncertain in the mind of the -great financier, and this he was to reach in the space of four months. - -The first great acquisition of value and importance was the transfer to -the Company of the right of coinage. This was effected on 25th July, -1719. The right was to extend over a period of nine years, and the -price was fixed at 50,000,000 livres, payable within fifteen months -of the date of the grant. To place the Company in a position to carry -out the bargain a fresh issue of shares was made, and Law on this -occasion took greater advantage of public enthusiasm than he did on -the occasion of the previous issue. In the latter case the shares were -offered at a premium of ten per cent., the public, although paying 550 -livres, receiving stock only of the value of 500 livres. In the present -instance the 500 livres share was to be allotted on payment of 1000 -livres, thus necessitating the issue of only 50,000 shares. In addition -to enacting a premium, Law employed a device he had before resorted to. -He made it a condition that subscribers should be already possessors -of previously issued shares to the extent of five times more than the -number of new shares they desired to have allotted to them. The effect -of this was magical. The demand for old shares was so intense that they -rose immediately to 2000 livres, and the rapidity of the rise only -served to widen the circle of speculators. Law was thus bringing within -his grasp practically the whole of the nation as participants in his -schemes. - -The universal enthusiasm, however, was not unmixed. The unaccustomed -magnitude of Law’s transactions was productive in certain quarters of -considerable misgivings, and not a few were able amidst the general -excitement to regard his schemes with more than usual calmness. Amongst -those, of course, were found the financier’s bitterest enemies. -To discredit Law, and to baulk him in his efforts, they lost no -opportunity; and to instil doubt in the public mind as to the sanity -of their speculations was by no means a difficult task. It was only -necessary to secure the support of a few in order to depress the value -of the Mississippi stock. Extensive sales, ostensibly for the purpose -of saving a further loss, but really for the purpose of undermining the -market, produced in the following month a sharp reaction. The Earl of -Stair writing to Secretary Craggs on 20th August, 1719, remarks in the -course of his letter upon this sudden and disturbing attitude of the -public. He says:-- - -“Mississippi begins to stagger; the actions fall and there are no more -buyers; which has happened by Law’s imprudence, and boundless desire -for gain. He had raised the actions to such a price that it required -above forty millions to pay the interest at four per cent. When the -French, by degrees, began to make this calculation, and found that it -was impossible that even the King could find his account to furnish -such a sum annually to support Mississippi, they found themselves -cheated; and they are now crowding to sell out. Law will do what he can -to support the actions, but the thing is impossible. The mystery of -the matter is this: in the original fund of one hundred millions, the -King and the Regent had about forty millions; and the same proportion -of additional subscription of fifty millions. The company bought the -coinage of the King at fifty millions, to be paid in fifteen months. -Besides these fifty millions, the King or the Regent, by selling out -when the actions were at four hundred, might have got two hundred -millions; at which rate they might have been supported. But by buoying -them up to six hundred, to make the Regent win three hundred millions, -Law risks to have the whole fabric tumble to the ground. For the -French, who run on boldly and impetuously in the beginning of all -enterprises, run back with the same impetuosity when once they are -rebuffed. I do not know if I have explained this matter to you, so as -that you will be able to understand. It is, certainly, something more -extravagant and more ridiculous than anything that ever happened in any -other country. I wish for your diversion I could but talk one hour to -you upon that subject.” - -Law, however, was equal to the opposition of his enemies, and treated -their efforts to undermine his position with the utmost indifference -and contempt. He proceeded apace with the completion of his schemes, -and was now approaching the zenith of his power. All that now remained -for him to accomplish of his original plans was the purchase of the -great farms and several other smaller sources of the national revenues. - -The anti-scheme attempted by the brothers Paris, under the auspices -of D’Argenson, had been carried out to the extent of a lease of the -great revenue farms having been granted to Aymard Lambert, D’Argenson’s -valet-de-chambre, but had not been put into operation. Law now came -forward and secured the lease on behalf of the Western Company, -accomplishing the three-fold object of acquiring a valuable asset for -the company, relieving the taxpayers from the intolerable exactions -of the farmers, and, lastly, humiliating D’Argenson for the part he -took in the anti-scheme. The grant of the great farms was formally -made on 27th, and of the other departments of taxation on 31st August. -The treasury had derived from these sources the annual revenue of -48,000,000 livres, but Law offered a further sum of 3,500,000 livres -for the privilege which was to extend over a period of nine years. The -Company now declared its ability to pay a dividend of 200 livres upon -its shares, or 40 per cent. upon its capital. Such a declaration at -once counteracted the devices of Law’s opponents to lower the price -of the shares, and within a few days they rose to a premium of 1000 -per cent., at which extravagant price it was even extremely difficult -to make substantial purchases. The demand was also created by the -condition that allotment of the recently issued shares would only be -in favour of those already possessed of stock. “The public,” says Lord -Stair, “has run upon this new subscription with that fury that near -the double of that sum is subscribed for; and there have been the -greatest brigues and quarrels to have place in the subscription, to -that degree, that the new submissions are not yet delivered out, nor is -the first payment received. Mr. Law’s door is shut, and all the people -of quality in France are on foot, in hundreds, before his door in the -Place Vendôme.” - -Law now made the concluding proposal of his schemes. The absorption -of _billets d’état_ by the Company, although extensive, had not yet -exhausted them. There still remained almost 1500 million livres -in circulation, and Law was anxious to have them liquidated. He -accordingly proposed to lend the King a sum of money sufficient for the -purpose at 3 per cent. per annum, and at the same time to reduce the -interest upon the 100 millions previously advanced at 4 per cent. to a -similar rate; and in return for an offer so advantageous, he secured an -extension of the various grants to the Company for the uniform period -of fifty years. To carry through this, the largest and most important -transaction upon which the Company had entered as yet, an issue of -300,000 new shares was made at a price of 5000 livres, thus yielding a -premium of 4500 livres. These shares, however, were not to be allotted -to the public. The Regent was fully alive to the possibility of -enriching himself by securing the whole of the issue and profiting by -the rise which would certainly take place in their value. He already -was holder of 100,000 of previously issued shares, and of the whole -capital of the company only 200,000 were in the hands of the public. -The supply was accordingly unequal to the demand, and in the course of -two months the shares reached the incredible price of 10,000 livres. A -kind of madness had seized the nation. A royal road to fortune had been -opened up by the ingenious foreigner; and had lured along its easy path -an excited throng of princes and people, peers and commoners, clergy -and laity, rich and poor--in short all who by any means could hope to -secure the coveted scrip. The memoirs of the period teem with instances -of the excessive folly and rashness which characterised these halcyon -days of the scheme, and display a want of balance on the part of the -French nation entirely beyond belief. - -That the public should thus have allowed their excitement of feelings -to destroy their judgment so far as to ignore the primary elements of -caution and of foresight can hardly be attributed to Law. No evidence -can be brought of any intention on his part to utilize his financial -genius for the purpose of blinding the nation to its own interests, -and turning it merely to his own exclusive advantage. The effect of -his schemes was entirely beyond his control. So far as the reception -they would receive from the French nation was concerned, his own -anticipations were only too clearly exceeded. He undoubtedly perceived -the dangerous courses upon which the public had entered, but it would -have been imprudent on his part to have endeavoured by any arbitrary -act to check it. He firmly believed in the adequacy of his system to -accomplish the objects which he stated he had in view. He may have -been, and was, somewhat over-sanguine, but that was merely a fault of -temperament, not a consequence of sinister motive. He may have been -extravagant in praise of the possibilities of his schemes, but that was -due to intensity of confidence in their efficacy, not to any deliberate -intention to deceive. - -The total capital of the company was now 300,000,000 livres, and to pay -the promised dividend of 200 livres per share would require profits of -at least 120,000,000 livres. Those profits were drawn principally from -the interest payable by the State upon the advances made by the Company -for the purposes of liquidating the national debt, from the coinage, -from the tobacco monopoly, from the great farms, from the collection of -general taxes, and from their general commerce. Amongst these the only -leakage which could occur would be in the latter, and Law’s estimate of -the profits derivable from it were placed at one-third of the whole. -Such an estimate, however, may have been so wide of the mark that the -expenditure incurred in the administration of the Company’s commercial -transactions might possibly have been so great as to absorb the whole -of the surpluses accruing from the other departments. Time, however, -could alone supply the test of this, but the downfall of the system -anticipated the opportunity. Other contingencies arose, foreign to the -business of the Company, which struck at its stability and brought its -career to an unexpected end. - -The closing months of 1719, and the opening months of 1720, saw the -system at the height of its prosperity. Everything proceeded smoothly. -Nothing ruffled the high hopes entertained by all as to its future. At -the General Assembly of the proprietors of the Company held, on 30th -December, 1719, for the purpose of communicating its position since -the previous assembly, and of submitting the accounts for this year, -it was reported that, although an accurate balance could not be struck -owing to the overwhelming duties of the directors in carrying through -the extensive negotiations of the previous months, “the proprietors -may be assured that everything passes for the good and advantage of -the Company; that the colonies of Louisiana are going on prosperously; -that the trade to India, and that to Africa, and to the north, are -assuming new vigour; that the produce of the Farms General is visible -increasing; that there will be very considerable profits arising from -the administration and striking of the coin and from the refining of -the materials; that the Company wish to economize the expenses of -taxations, and of the emoluments given to the Receivers General of -Finance, so that the dividend of the old shares of the Western Company -might be fixed at present at the proportion of 40 per cent. and a like -dividend for the hundred and fifty millions of the new shares in the -India Company.” - -The board of directors consisted of thirty members, each of whom was -obliged to deposit 200 shares as security for his good administration. -Their salaries were originally fixed at 6000 livres, but at the same -meeting were increased to 30,000 livres, by no means an exorbitant sum -in view of the magnitude of their labours and the greatness of their -responsibility. - -Interesting as had been the progress of the Company during the past -year, the Bank which Law had founded had also undergone a great and -momentous change. Since its institution in May, 1716, its operations -had met with great success, and had secured the utmost confidence -of the public, not only because of the soundness of the principles -which dominated its administration, but also because of its careful -and cautious management. The currency became more stable than it -hitherto had been, and foreign trade developed where before it had -been impossible by reason of the great uncertainty of the rates of -exchange. The Regent, influenced by its success and labouring under the -idea that this success could be permanently maintained even though its -principal features were radically changed, determined to take control -of Law’s bank, and convert it from a private into a royal institution. -Accordingly, on 4th December, 1718, the General Bank of Law and Company -was proclaimed a Royal Bank, to be administered in future by the King -and his advisers. This change was opposed by Law, who, knowing the -character of the Regent, foresaw the possibility of disastrous results, -but the Duc d’Orleans had decided upon the step, and opposition was of -no avail. The new ordinance was to come into force on 1st January, -1719. The King reimbursed in specie the holders of the shares, and -guaranteed the due payment of the notes in circulation which at that -date amounted to 59,000,000 livres. The proprietors, who had, as -already seen, only paid one fourth of their holding in specie and the -remaining three fourths in depreciated _billets d’état_, thus realised -their investment in cash to the face value of their securities. Law was -appointed Director-General of the Bank, acting under the instructions -of the King through the Regent. Thus the King by this change became -the sole proprietor of the Bank, and the dignity he conferred upon it -secured it even more, if that were possible, in the good favour of his -people. - -It has already been stated that the notes of the General Bank were -always convertible at sight into coin of the weight and standard of -the day of issue, and that here lay its strength and security. The -Regent, however, in all probability unwilling to restrict himself from -taking advantage of depreciating the coinage at any time a favourable -opportunity should present itself, divested the notes of the Bank of -this excellent feature, and in the future they bore that. “The Bank -promises to pay the bearer, at sight, ---- livres in silver coin, -value received.” This change, also opposed by Law, struck at the -very root principle of good credit. It endeavoured to make paper the -standard of currency, while no guarantee was given that the coinage -would remain of a fixed and unvarying value. No legislative decree, -no royal proclamation, can place an artificial value upon the medium -of currency, unless there is also present the indispensable element of -public confidence. A paper currency can only circulate at its nominal -value if there is behind it the security of a fixed coinage and a fund -of specie in reserve for conversion. The Regent in issuing his new -notes offered neither of these, but on account of the favour into which -the Bank had been brought by Law, the confidence of the public remained -as yet at least unshaken. We will see, however, at a later stage the -consequences which this disastrous change involved. - -A further important step in the development of the Bank was the -establishment of branches in the five important centres--Lyons, La -Rochelle, Tours, Orleans, and Amiens. Those towns, which enjoyed the -privilege of local parliaments, such as Toulouse, Bordeaux, Rouen, -Grenoble, Dijon and Metz, were carefully avoided by the Regent, who -anticipated that the extension of the Bank to them might provoke -unpleasant opposition. Other towns, again, where no provincial -parliaments existed to consult, had otherwise displayed hostility to -the Bank, and these also were not honoured by the presence of its -branches. “Lisle, Marseilles, Nantz, Saint Malo, and Bayonne, were -distinguished by this prudent exclusion.” At the same time it was -decreed that where branches of the Bank existed specie should only be -legal tender up to 600 livres, notes being necessary for amounts beyond -that sum, and that gold and silver were on no account, unless by -special permission of the Bank authorities, to be transmitted to such -towns. By these restrictions it was hoped that specie as a medium of -currency would fall into desuetude and notes alone become recognised -for purposes of exchange. This hope was expressed in the decree of -22nd April, 1719, which authorised the issue of 100,000,000 additional -notes. “These cannot be subject to any diminution, as the specie is, -inasmuch as the circulation of the Bank bills is more useful to the -subjects of his Majesty, than that of the specie of gold and silver, -and that they deserve a particular protection, in preference to the -coin made of materials brought from foreign countries.” - -Before the close of the year, fresh issues were made to the extent of -900,000,000 livres; and on 21st December, silver and gold suffered -further restriction as tender, the former being limited to ten livres -and the latter to three hundred. The purpose of this was to force a -paper currency, and as far as possible discourage the use of specie. -By reducing to so low a limit the tender of gold and silver, a demand -was created for the notes of the Bank, and very shortly the Bank -had attracted to itself a large proportion of the coinage then in -currency. People “ran there in crowds, conjuring and imploring the -clerks to receive their specie, and thinking themselves happy when they -succeeded. Upon which, a merry fellow wittily called out to those who -were the most forward; ‘Don’t be afraid, gentlemen, that your money -should remain on your hands; it shall all be taken from you.’” - -The effect was to a large extent as the Regent had wished. Paper -circulated with the greatest freedom, and the highly speculative -mood in which the people indulged was productive of an appearance -of peculiarly false prosperity. Money as represented in notes -became exceedingly abundant because of the manner in which it was -distributed. Everyone spent with a lavish hand, regardless of the -possibility of Law’s schemes receiving a sudden and unexpected check, -thus bringing about a dislocation of the supply of money. Luxuries -became necessaries, and domestic life displayed the grossest degrees -of unbridled extravagance. To supply the great demand for rich cloths, -costly furniture, and all the various luxuries which only find a ready -market when prosperity spreads over a whole community, new industries -arose throughout the country, and labour not only became scarce but -was able to command in some cases four times its previous value. A -taste arose too for works of art, and the best of the continent was -sent into France where fabulous prices were obtained with a readiness -proportionate to the ease with which the fortunes of the investors -were made. Duhautchamp, in his History of the Scheme, gives several -instances of this extravagance on the part of the _nouveaux riches_. -Of one he says that, “He carried his magnificence so far, that most -of the deeds related of him appear fabulous. His hotel in Paris, his -gardens, his furniture, his equipage, the number of his servants of -all degrees and professions, equalled those of the greatest princes. -A certain jeweller declares that he supplied him with more than three -millions worth of precious stones, without reckoning the beautiful -diamond of the Count de Nocé, for which he paid 500,000 livres, and a -girdle buckle which a Jew sold him for the same sum. With regard to his -furniture, being a connoisseur of good taste, he had selected the whole -so well, that, to form an idea of the magnificence of his apartments, -we must have recourse to descriptions which are used of fairy palaces. -Not content with 4000 marcs of silver and silver gilt service which -he had first ordered, he found means to carry off from the jeweller’s -that which had been made for the King of Portugal, under pretext that -the agents of that prince had been wanting in punctuality of payment. -Besides this magnificent table service, he furnished himself with -stands, mirrors, braziers, orange-tree cases, flower pots, &c. Lastly -all his cooking utensils were of silver. As for his upholstery, he -took everything which could be imagined of that kind that was most -precious. He had no less than eighty horses in his stables--his -equipages equalled in number those of the grand Sultan. The number of -his servants was nearly ninety, amongst whom were comprised intendant, -secretaries, steward, surgeon, valets de chambre, upholsterers, four -young ladies as chamber maids, and for his grooms four footmen of birth -very superior to that of their master. Even when he went to dine away -from home, he had his own table served as sumptuously as if he were -present. It was served with everything most exquisite, principally -during the year 1720. He was supplied with young peas which had cost -100 pistoles the pint. Nothing was wanting that the most voluptuous -gourmet could think of. The desserts that were served were fitted to -surprise the most expert mechanicians. Large fruits, which would have -deceived the eyes of the most clear sighted, were so artistically -contrived that when anyone, surprised at seeing a beautiful melon in -winter, attempted to touch it, he caused a number of little fountains -to spring up of different sorts of spirituous liquors which delighted -the sense of smell, whilst the master of the house, pressing his foot -on a concealed spring, made an artificial figure walk round the table -and pour out nectar to the ladies, before whom he was made to stop. -In a word I doubt whether the famous feasts of Antony and Augusta, -so vaunted in history, had anything more rare than those which our -fortunate millionaire took a pleasure in giving.” - - - - -CHAPTER VII - - Hotel Mazarin acquired as office of Company and of - Bank.--Excitement of crowds in the Rue Vivienne and the - Rue Quincampoix.--Curious sources of fortune.--Instances - of enormous fortunes acquired by members of the - nobility.--Enormous influx of foreign speculators into Paris. - - -[Illustration] - -In order that the Company and the Bank might be housed in a style of -magnificence befitting the brilliance of their careers, the Hotel -Mazarin had been purchased at a cost of one million livres. Both -were now under one roof, and Law was thus enabled to devote himself, -with greater ease and less inconvenience, to their management. This -was all the more necessary since the Bank and the Company, although -nominally distinct and separate undertakings carrying on different -classes of business, were yet in reality part and parcel of the same -system, engaged in accomplishing the same ultimate objects and working -in co-operation in all their transactions. Of both, Law was the -controlling spirit. The Bank, now the property of the Crown, was placed -entirely under the management of its founder upon whom no restrictions -were laid, and the Company although under the directorate of thirty -proprietors was equally in his hands. Their will was invariably his -wish, and in everything they yielded with ready compliance to the -suggestions of the great financial genius. - -While the Hotel Mazarin was the centre from which the fuel for the -prevailing excitement was distributed, its intensity was only really -felt and displayed in another quarter. When the day of issue of shares -arrived, the Rue Vivienne in which the Company’s offices were situated, -and all the adjoining streets and squares, were crowded by speculators -of all degrees. Unseemly rushes took place amongst the throng. Each one -regarded his neighbour as a rival for the possession of the coveted -scrip, and crushed and jostled himself though the crowd towards the -enchanted building so that he might be amongst the first to enter when -its doors were opened to hand over the shares to successful applicants. -Lemontey compared them to a phalanx which “advanced for several days -and nights towards the Exchange office, like a compact column, which -neither sleep, hunger, nor thirst could destroy. But at the fatal cry -which announced the delivery of the last share, the whole vanished at -once.” So great was the number of applicants that on several occasions -considerable difficulty and delay were experienced in compiling the -lists of allottees. Public patience at these times was thoroughly -exhausted, and gave way to frantic disorder and not infrequently to -scenes of violence. The aristocracy, in order that they might not -be compelled to mix with the crowds on the street in their patient -wait to know the result of their efforts to secure allotment, rented -rooms and houses in the Rue Vivienne, and so great was the demand for -accommodation that fortunate proprietors were in a position to charge -the most exorbitant rates. - -The excitement and frenzy however reached its highest point in the Rue -Quincampoix. Here was the Stock Exchange of the day. A short narrow -street of fifty yards in length and two or three in breadth, it ran -from the Rue aux Ours to the Rue Aubry-le-Boucher, and contained the -offices and houses of the bankers of the period. So confined was it -that the crowds of speculators entirely blocked it as a thoroughfare, -and drivers were prohibited from making use of it. Gates were erected -at each end, and guards with drums were stationed to inform people -when the street was opened or closed for business. Other restrictions -were imposed upon the use of the street. The entrance by the Rue -Aubry-le-Boucher was reserved for members of the aristocracy, and that -by the Rue aux Ours for all others, but inside the gates no distinction -of rank was respected. On Sundays and fête days the street was closed -altogether, and in order that business might not proceed to hours which -would disturb the rest of those who resided in the neighbourhood the -guards were ordered to clear the speculators from the street at a -reasonable hour in the evening. - -As in the case of the tenants and proprietors of houses in the Rue -Vivienne, opportunity to even greater extent was afforded those who -resided in the Rue Quincampoix to let their houses as dwellings or -offices to the infatuated crowd of speculators. A house for which -a rent of eight hundred livres per annum was paid secured without -difficulty for its occupier a return of 5000 to 12,000 livres per -month, single rooms in many cases returning as much as 1500 livres per -month. Fortunes were made by many people who anticipated the demand -for accommodation and secured a number of houses at little above -their normal rent for the purpose of letting at these extravagant -figures. Curious, too, were the methods adopted by some for the making -of money. We read of a hunchback who converted his deformity to the -original and profitable use of a writing-desk. In a very few days he -had accumulated the sum of 150,000 livres from the fees he received -from the speculators who took advantage of the novel purpose to which -he put his hunch. The same eccentric occupation enabled a soldier, -possessed of very broad shoulders, to obtain his discharge from the -army and purchase an estate in the provinces to which he prudently -retired before the fever of speculation had enthralled him. We read -too of a cobbler who plied his trade in a very primitive manner under -four planks secured to a wall. The crowds of ladies who were drawn to -the Rue Quincampoix as interested spectators in its exciting scenes -suggested to the cobbler the means of gaining in a short time more -than the labour of a lifetime could secure for him. He furnished -his diminutive stall with chairs, and these he let out to ladies at -exorbitant charges gladly paid. He then added to his stock a supply of -pens and paper which were taken advantage of by brokers and others who -resorted to his stall to carry out their transactions. By these means -he drew an income of 50,000 livres per month. - -But these and other similar methods of acquiring fortunes were only -incidental to the main business of the Rue Quincampoix. Great and -unexpected fortunes were made by speculators in the Company’s shares, -and these by no means were confined to the wealthy capitalists or -even persons possessed of moderate sums available for operation. -The methods provided for exchange were of the crudest description, -and provided means of amassing wealth for those who were absolutely -without capital but were unscrupulous enough to take advantage of the -opportunities that were opened up to them. Innumerable instances are -recorded where servants, the most menial, enriched themselves in this -way. One shareholder desirous of disposing his holding was too unwell -to carry out the sale himself and sent his servant to carry through the -transaction. He was instructed to sell two hundred and fifty shares at -8000 livres per share. On arrival at the Rue Quincampoix, he found the -shares had meanwhile risen to 10,000 livres. The difference of 500,000 -livres he retained, and with it speculated further until he succeeded -in multiplying it four times, when he retired from the scene of his -good fortune to enjoy the fruits of his ill-earned money. Another, -who had been entrusted with the realisation of two hundred shares, -took advantage of the rapidly rising market to postpone the disposal -of them until the price enabled him to obtain 1,000,000 livres beyond -their value on the day upon which they were handed to him, and this he -regarded as his own, only paying to his principal the price they would -have brought had they been immediately realised. - -Amusing too, are many of the stories of those who found themselves so -suddenly raised from extreme indigence to excess of wealth. Carriages -thronged the streets whose occupants were formerly coachmen and -footmen, cooks and scullery-maids, butlers and valets. A footman who -had established himself in a palatial residence betrayed his former -station by mounting behind his own carriage instead of entering it, -and when reminded of his mistake excused himself by the remark that he -wished to engage more footmen, and desired to know if there were room -for them. Another footman, according to the Regent’s mother, was in -the habit of doing the same thing, but in his case intentionally, in -order that he might the more experience the pleasure of the change his -newly gained wealth had brought to him. Amongst menials none were more -fortunate than those who were in attendance on Law himself. It is said -that his coachman, having made for himself a competency, desired to -leave the financier’s service, and on expressing his desire to Law was -allowed to do so on condition that he provided a substitute. This was -naturally easily complied with, and in a short time he returned with -two suitable men, of whom he offered one to Law, mentioning that he -intended retaining the other for himself. - -[Illustration: DUC D’ORLEANS, - -Regent of France during the minority of Louis XV.] - -It was, however, amongst the higher ranks of society that the greatest -scramble for wealth took place, and amongst the entourage of the -court that the deepest gambling in shares was indulged in. Peers, -court favourites, ladies of fashion, judges, bishops, and practically -everyone of standing in society or in the public service, were to be -found day after day in the Rue Quincampoix, engaged in the purchase -and sale of the Mississippi stock. The Regent himself was one of the -most successful participants in the national gamble, and with princely -and lavish generosity, marked his sudden and easy access of enormous -wealth. Amongst charitable institutions he distributed several million -livres, giving in particular one million each to the Hotel-Dieu, the -Hospital General, and the Foundlings. The debts of prisoners to the -extent of one and a half millions were discharged, and to many of his -friends he gave gifts of varying, but extravagant, amounts. The Marquis -de Nocé, the Count de la Motte, and the Count de Roie, were each -recipients of 100,000 livres, and the Count de la Marche, a child of -thirteen years, son of the Prince de Conti, had conferred upon him a -pension of 60,000 livres. He also increased by 130,000 livres, the -pension enjoyed by his mother, the Princess Palatine, who wrote in her -letters that “we hear nothing but millions spoken of now; my son has -given me two millions in shares, which I have distributed among my -household. The King has also taken some millions for his household. All -the royal household have received some, all the children of France, the -grandchildren of France, and the Princes of the blood.” - -The Duke of Bourbon, son of Louis XIV. and Madame de Montespan, -repaired his broken fortunes, liquidated his enormous debts, and in the -course of several successful strokes of speculation, acquired a fortune -of twenty million livres. He purchased large estates in Picardy, and -acquired all the most valuable land between the Oise and the Somme. The -castle at Chantilly was rebuilt on a scale of regal magnificence, and -an extensive zoological collection was brought together as a feature of -attraction to his territorial possessions. Anxious to improve the breed -of horses in France, he also imported 150 race-horses from England, and -thus established one of the finest stables on the continent of Europe. -And then, “to pay his court to the Regent, who was passionately fond -of his daughter, the Duchess of Berry, he gave that Princess, who was -eager after pleasure, a superb festival, which lasted four or five -days, and cost an immense sum of money.” - -Among other nobles whose dilapidated fortunes were restored at this -time, were the Dukes D’Antin, de Guiche, de la Force, the Marshal -D’Estrées, Madame de Vérue and the Princes de Rohan and de Poix. But -many foreigners were no less successful, and of one, Joseph Gage, -brother of Viscount Gage, who had acquired an exceedingly large -fortune, we are told that, having aspirations to kingly rank, he -offered the King of Poland three millions if the latter would resign -his crown in his favour, and meeting with an unfavourable reply, -endeavoured to negotiate a similar transaction with reference to -Sardinia, but with no greater success. - -Fortune, however, did not shine on all the members of the nobility -of France. Many were unable or unwilling to take advantage of the -opportunities offered them for enrichment. Of the latter the most -conspicuous were Chancellor D’Aguessau, the Duc de Saint-Simon, the -Duc de la Rochefoucauld, Marshal de Villeroy and Marshall de Villars. -For the former other means were discovered for acquiring wealth than -direct speculation, means less creditable, if not more discreditable. -The institution of marriage was utilized by the poor nobility to -replenish their finances. Many of the _nouveaux riches_ were only too -pleased to endow a prospective noble son-in-law with wealth sufficient -to enable him to live according to his station, so that they too -might be able to number themselves among the aristocracy. Until the -advent of Law, marriages of this kind were not only unusual, but so -strict was the line of division which separated the nobility from -all inferior ranks, that when they were celebrated, they invariably -brought social ostracism. The charms of wealth, however, removed all -scruples of caste, and we find, for instance, that the marriage of -Mlle. de Sainte-Hermine, a near relation of the Duc de la Vrilliere, -Secretary of State, whose consent was willingly given, to a _parvenu_ -of the name of Panier, was celebrated without any reflection on the -ground of misalliance. But marriages of a very different class from -these were brought into favour amongst this class of suitor during -these days of financial excitement. These were known as marriages à -réméré,--marriages with right of redemption,--the distinctive feature -of which consisted in the right of the noble husband to cancel the -marriage at a future date. Marais instances the case of “the Marquis -D’Oise, of the house of Villars-Brancas, who entered into a proposal -of marriage with a little girl of two years old, daughter of André -the Mississippian. The betrothal was made with the consent of the two -families. The Marquis was to have an annuity of 20,000 livres until the -marriage took place, and even in case it never took place. If it took -place, the dowry was to be four millions. Little girls would no longer -have dolls, but asked for “Marquises of Oise to play with.” - -This marriage, however, did not take place, the pretext for its -cancellation being found in the subsequent fall of André on the -collapse of the scheme. The marriage of the Count D’Evreux was of the -same class. His wife was a young girl of twelve, daughter of the famous -Crozat. The Count received a sum of 2,000,000 livres on the marriage, -but, subsequently gaining enormous profits on successful share -transactions, repaid the dowry and obtained release from the nuptial -tie. - -During these months of excitement, Paris was a centre of a attraction -equally for the foreigner as for the Frenchman. The brilliance of the -capital was dazzling, and the facilities for spending money were even -greater than those for making it. The influx was from all nations and -drawn from every grade. The sovereigns even of foreign countries did -not disdain to engage in the general business of share speculation, and -sent to Paris specially appointed agents for the purpose, or made use -of their ministers already at the French court. Britain too supplied -its quota of speculators. The Earl of Ilay, a friend of Law’s, and -anxious to benefit his friends at home by turning his friendship to -account, in writing to Mrs. Howard in Sept., 1719, said, “I have laid -out the money you bid me. It is very difficult in a letter to give you -an idea of the funds of this country; but in fact everybody has made -estates that have been concerned in them for four or five months. As a -little instance of this, cousin Jack has got, I believe, near £10,000, -and has lost the half of that sum by a timorous silly bargain he made; -for my part, I came after all was in a manner over, and as I never -meddle with these matters, I do nothing but buy books and gimcracks. -It is true it is now very late, and yet, by what I am informed by him -who knows all, and does all, I am of opinion that whatever sum you -remit here may be turned to great profit. The stocks are now at 950, -and if no accidents happen of mortality, it is probable they will be -1500 in a short time. The money I laid out for you was 5000 livres, -as a subscriber to the fifty millions of stock lately added, of which -the tenth part only is paid down, so that 5000 is the first payment -of 50,000 livres. The subscription was full, but Mr. Law was so kind -as to allow it me; some of the subscribers have already sold their -subscriptions for 230, that is their own money back again and 130 per -cent. profit. Whatever you think fit to do, you may bid Middleton -remit to me as many livres. I shall acknowledge the receipt of them -and do the best I can. You will think that the levity of this country -has turned my head when I tell you your master might, within these few -months, have made himself richer than his father.” - -It was estimated that at the end of 1719, no fewer than 305,000 -foreigners were in Paris, drawn there in the hope of securing immediate -wealth. So large an accession to the population had the effect of -stimulating business. Housing accommodation became exceedingly scarce, -and every available out-house was utilised as a temporary place of -abode. Not only did the necessaries of life rise greatly in price, but -all articles of luxury shared in the general increase of value. The -effect was to create an appearance of great prosperity which permeated -every class of the community, and elicited expressions of deep respect -and admiration for the man who had inaugurated this new era of apparent -greatness for France. - - - - -CHAPTER VIII - - Law’s importance causes him to be courted by all classes.--Socially - ostracised by nobility.--Law’s conversion to Roman - Catholicism.--The part of the Abbé Dubois and the Abbé Tencin - in the conversion.--Difficulties in its accomplishment.--Law - becomes naturalised.--Law appointed Controller-General of - Finance.--Regent celebrates appointment by a distribution - of pensions.--Law honoured with the freedom of the City of - Edinburgh.--Elected member of Academy of Sciences.--William Law - brought to France and made Postmaster-General.--Law’s private - investments.--His fiscal reforms.--His introduction of free - university education. - - -[Illustration] - -In the midst of all this excitement, gaiety and brilliance, Law himself -stood out as the one great and prominent figure in the kingdom. Court -was paid to him by all the most influential personages in France; and -by the multitude he was regarded with feelings of awe and admiration. -His chambers were crowded day after day by those who at other times -would have been in attendance upon their sovereign. Every excuse and -artifice was employed in order to obtain an interview with the great -man. “I have seen an hundred coaches at his levee in a morning, and -dukes and peers waiting for hours together to speak with him, and could -not get within two rooms of him for the crowd.” Yet through the whole -of this period of flattery and adulation he maintained the same cool -unaffected demeanour which had always characterised him, and although -given at times to treat his importunate visitors with haughtiness and -curtness, yet he was noted for his general suavity and affability -when receiving those who were strangers to him, and who had sought -introductions without credentials merely for the purpose of obtaining -pecuniary assistance. When he passed along the streets, he was followed -by crowds by whom he was greeted with cries of “Long live Mr. Law.” -Ladies of the highest rank kissed their hands to him, and even princes -rendered him obeisance in public. In fact so important had Law become -in the eyes of everyone, that he allowed himself to indulge in conduct -of a somewhat shameless character, although it was attributed simply -to boldness by those who encouraged him in it. The latter--and they -were more often than not of the gentler sex--thought they excused their -conduct in endeavouring to give it the character of a joke, and the -nobility of the period, ready at all times to sacrifice their lives to -their honour, scrupled not to sacrifice their honour to their fortune. - -The determination of many ladies to have the honour, as they considered -it, of speaking with Law, led to many amusing if not ridiculous -incidents. One lady, who had waited without success at his house for -an interview, instructed her coachman to overturn her carriage if on -any occasion when driving her he chanced to meet the great financier. -For several days she drove through the streets of Paris he was most -in the habit of frequenting, and at last her patience was rewarded. -On the approach of Law her coachman upset the carriage, and the -lady who was carried into a neighbouring house by the object of her -attentions confessed the purpose of her stratagem, and extracted a -promise from him that her application for shares would be granted. Not -so successful, however, was the ruse of another lady who had failed to -secure an invitation to the house of Madame de Simiane where Law was to -dine. Driving to the house when all were seated at dinner, she bade her -coachman and footman to shout “Fire,” at which the guests all rushed -into the street. On seeing the lady leave her carriage to meet him, Law -at once perceived the object of the false alarm and fled before she had -an opportunity of speaking to him. - -At Law’s house was always to be found the most exclusive society in -Paris, and it is related that the Regent, expressing the desire on -one occasion to find a Duchess to whom he could depute the duty of -accompanying his daughter to Modena, mentioned to the Abbé Dubois -that he did not exactly know where to find one, to which the latter -remarked, “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.” - -One incident, however, serves to show that there was no desire on -the part of the nobility to admit Law to their ranks, and that their -conduct in apparently placing him on their own social level was merely -dictated by the possibility of utilising their friendship for financial -gain. The Maréchal de Villeroi had arranged a ballet in which the young -king was to appear. Such ballets had been common during the reign -of Louis XIV., and were considered part of a nobleman’s education, -which then chiefly consisted in “grace, address, exercise, respect -for bearing, graduated and delicate politeness, polished and decent -gallantry,” but had fallen entirely into disuse during the Regency. -Great difficulty was accordingly experienced by the Maréchal in -obtaining a sufficient number of dancers amongst the nobility who alone -were formerly privileged to take part in the royal entertainment. Many -were admitted who would not otherwise have been allowed to join in the -ballet, and Law requested the Regent to obtain the honour for his son -of being allowed to join the company. The Maréchal was unable to refuse -the Regent’s request, but the idea of a commoner’s son occupying a -place in a royal ballet so scandalised the feelings of social propriety -of the privileged circle that “nothing else was spoken of for some -days; tongues wagged freely, too; and a good deal of dirty water was -thrown upon other dancers in the ballet.” The success of the ballet was -thus threatened, and the whole project promised to be a total failure -when it was announced that Law’s son had fallen ill from small-pox. The -cause of all the difficulties having thus been removed, the high-born -courtiers displayed their undisguised satisfaction and proceeded with -calmer feelings to carry out the first and only Court ballet which -graced the reign of Louis XV. - -While Law’s influence at this time was all-powerful in the government -of France, he was without any of the outward symbols of authority. He -held no office, and his influence accordingly could only be exercised -indirectly. He enjoyed the splendour of the position to which he had -attained, but did not possess any official mark of greatness. Two -obstacles existed to official advancement. His religion was not that -recognised by the State; and his nationality was foreign. Both of these -he was now prepared to renounce. The abjuration of his religion was a -step which required to be accomplished with the utmost caution. All the -elements of sincerity were lacking, and Law’s conversion was likely -to be regarded as a merely political move. There was danger moreover -of the public regarding the conversion of Law under royal auspices -in the light of a highly scandalous proceeding, and considering that -it might derogate from the high office to which he was destined and -for which the abjuration of his religion was a necessary preliminary. -There was a circumstance also in Law’s career which under ordinary -conditions would have militated against his admission to the Roman -Catholic communion, and therefore required delicate treatment. Law -had not been legally married to the lady whom he passed off as his -wife, and the law of the Church strictly required cessation of all -relations with her. This, naturally, was a course to which Law would -not assent since by her he had a son and a daughter, and since -her husband Senor was now dead for many years. It was accordingly -necessary to have a very indulgent converter, one who would not only -attest sincere conversion but would at the same time refrain from -interfering with Law’s connubial relations. An accommodating instrument -had therefore to be found, and Dubois was ready to supply him in the -person of a certain Abbé Tencin. “I shall give you,” said Dubois, -“neither a curé nor a habitué de paroisse: they are too much bound by -formularies, maxims, and rigid rules; you will have the Abbé Tencin, -a man of considerable talent whom I know intimately; he can convert -and receive into the Church Mr. Law and all his family.” The Abbé was -undoubtedly a man of talent, ambitious and witty, but unfortunately had -acquired a reputation for unscrupulousness, and a degree of dishonesty -inconsistent with his high professions. Regarded with suspicion, -and denied the friendship of those with whom his calling would have -brought him into contact, he devoted himself to intriguing on behalf -of politicians and others to whom a man of the ability and cunningness -of the Abbé was indispensable. To Dubois he was invaluable, but he -also had that minister under his control through his having compromised -himself with Madame de Tencin. The Abbé found in this a powerful lever, -and unfailingly turned it to his own advantage at every opportunity. -Law’s conversion was such an opportunity, and one which opened out a -prospect of enrichment he had not as yet enjoyed. - -With the approval of the Regent, the Abbé was accordingly deputed to -perform the delicate task of making Law a Catholic. A short time was -allowed to elapse before the actual ceremony took place, and in the -interval it was supposed that Law, under the spiritual guidance of the -Abbé, was preparing himself for the solemn and important step he was -about to take. But by no ingenious form of deception, however mild, was -the Abbé able to give even a colour of sincerity to Law’s conversion, -and he was therefore placed under the necessity of choosing some other -place than Paris for the performance of the ceremony lest the people, -outraged in their notions of religious propriety, should resort to -forcible measures to prevent the ceremony from taking place. The Church -of the Récollets in Melun was accordingly chosen as a sufficiently safe -and retired scene for the abjuration, and on 17th September, 1719, -the necessary formalities were performed, the Abbé retiring from “his -pious task with many shares and bank-notes.” The event was made the -occasion of sarcastic verse of which a few fragments still survive. -The following fragment preserved in the “Memoris du Maréchal Duc de -Richelieu” celebrates the bestowal of the title of Primate of the -Mississippi upon the Abbé by the Colonel of the Regiment of Skull-Caps, -a burlesque association which jested on all events:-- - - Nous Colonel de la Calotte, - Pour empêcher par tous moyens, - Que l’erreur des Luthériens - Et que la Doctrine Huguenotte - N’infecte notre Régiment - D’un pernicieux sentiment; - Et pour mettre dans la voye, - Quiconque seroit fourvoyé, - Et seroit devenu la proye - De l’Hérétique Devoyé. - A ces causes, vu la science, - Bonnes mœurs, doctrine, éloquence - Et zele que l’Abbé Tencin - A fait paroître sur-tout autre; - Pour le salut de son prochain, - Nous lui donnons Lettre d’Apôtre, - Et de convertisseur en chef; - D’autant qu’en homme apostolique, - Il a rendu Law Catholique: - En outre par le même bref, - Voulant illustrer la soutane, - Et donner du poids aux Sermons - Dudit Abbé; nous le nommons - _Primat de la Louisiane._ - De plus, quoique l’Abbé susdit, - Plein d’un évangélique esprit, - Meprise les biens de ce monde, - Et que même contre eux il fronde. - De notre libéralité - Pour soutenir sa dignité, - En conséquence du systême - Lui déléguons dîme on dixieme - Sur les brouillards dudit pays, - Qui du systême sont le prix; - Espérant qui la Cour de Rome - Donnera les Bulles gratis. - -An unexpected difficulty, however, now arose. Law’s parish church -was the church of Saint-Roch, and the Curé, refusing to credit the -sincerity of the conversion, would not recognize Law as a duly -converted Catholic. This was a serious difficulty since Law had -renounced his old faith and, while having complied with all the outward -formalities necessary for reception into the new, was denied admission. -The realisation of his ambition was thus threatened, and the situation -demanded the employment of measures, extreme if necessary, but -sufficient at least to overcome the scruples of the recalcitrant Curé. -Tencin, as intermediary in the negotiations which followed, had full -and ample powers to treat with the Curé. The wily Abbé, knowing that -corruption was closed to him as an avenue of successful approach to the -Curé, adopted the useful method, but one none the less corrupt because -it does not personally benefit the recipient, of offering on behalf -of his principal to subscribe lavishly to the funds of the church, -and to give substantial assistance towards its construction. The Curé -yielded readily to the temptation, and it was thereupon arranged that -Law should communicate and make the bread offering at High Mass on -Christmas-day with all due solemnity. His donations were attributed to -a sense of religious duty, and as a thank-offering for the privilege of -being received into the Catholic communion. The ceremony was performed -before a crowded and fashionable congregation, who had flocked from -Paris to witness the interesting event, and Law was now able to take -out letters of naturalisation. - -Law, however, was not permitted to escape so easily from public -reflection upon the apparent motives of his action. A heated -controversy arose between Jansenites, who, influenced only by rigid -principle, were indignant at the manner in which a sacred rite had been -in their opinion grossly abused, and the Jesuits, who, inclined to -place more weight upon outward ceremony, were convinced, or at least -declared they were convinced, of the sincerity of the conversion. Nor -were matters improved when during the controversy all the compromising -features of Law’s past life were diligently gathered and as diligently -published to a curious and interested community. - -But Law chose to treat the matter in a spirit of indifference, and by -refraining from making any attempt to refute or explain the statements -of his opponents the storm subsided from mere exhaustion. - -A few days after the ceremony at Saint-Roch, on 5th January, 1720, Law -was named Controller General of Finance in place of D’Argenson, whose -tenure of office was wholly at Law’s mercy. Law had merely to create -difficulties for his nominee, in order to obtain his resignation, and -D’Argenson wise enough to perceive the futility of opposing the designs -of Law readily yielded up the most important office in the national -administration. As Voltaire remarks, Law had in the space of four -years developed from a Scotsman into a Frenchman; from a Protestant -into a Catholic; from an adventurer into a lord of the fairest lands -of the kingdom; and from a banker into a minister of state. His -phenomenal rise from obscurity to the highest office, and that in a -foreign country, was an apparent witness to the truth of his theories, -and the circumstance that he did not allow himself to be overcome by -overestimation of his own importance, but maintained an unassuming and -unpretentious manner throughout the whole of this period secured for -him the personal attachment and admiration of the whole nation, and -for his opinions a greater degree of implicit faith than probably they -would otherwise have received. - -The Regent was himself delighted with the preferment he was thus easily -enabled to confer upon his favourite, and marked the occasion by a -lavish distribution of grants and pensions to numerous courtiers and -relations. Of these the Duke of Saint-Simon mentions grants of 600,000 -livres to La Fare, captain of the guard; 100,000 livres to Castries, -chevalier d’honneur to Madame la Duchesse d’Orléans; 200,000 to the -Prince de Courtenay; and 60,000 livres to the Comte de la Marche, the -infant son of the Prince de Conti. Saint-Simon then adds that “seeing -so much depredation, and no recovery to hope for, I asked M. la Duc -d’Orléans to attach 12,000 livres, by way of increase, to my government -of Senlis, which was worth only 1000 livres, and of which my second son -had the reversion. I obtained it at once.” - -Two other honours of a different character were also conferred upon -Law during these few months of greatness. One came from his native -city, which was now anxious to do homage to the man of whom it -formerly had reason to be somewhat ashamed. This consisted of the -freedom of Edinburgh, presented to him in a gold casket of magnificent -workmanship, which had cost the municipal treasury the sum of £300. The -other consisted in his election as an honorary member of the Academy -of Sciences, an honour of the highest order and conferred only upon -Frenchmen of outstanding ability. In this latter condition was found -the excuse for purging his name from the roll on his downfall, his -election which took place on 2nd December, 1719, having preceded his -naturalisation. - -The magnitude and diversity of interests to which Law’s time and -attention was now devoted were such as to cause him to enlist the -services of his brother, William Law, a man of parts but much inferior -in ability to his more brilliant brother. - -William Law was first appointed representative of the Bank on the -London Exchange, and so great was the standing of the Bank in the -opinion of English commercial circles that the bulk of remittances -for France passed through his hands. His business capacity, however, -was such as to warrant Law in bringing his brother over to Paris, and -accordingly a London office was established in the Strand under the -management of one George Middleton. Before setting out for Paris, -William Law had made arrangements for the importation into France -of considerable numbers of skilled workmen, chiefly gold and silver -smiths. It had always been one of Law’s objects to develop France -into a great industrial nation, and one of the methods he adopted to -accomplish this end was to rob England of its best workmen by offering -substantial inducements. A factory was established at Versailles in -which it was intended to carry on, on a large scale, a business which -would gradually absorb certain classes of trade that had hitherto been -practically the monopoly of British manufacturers. Success however -did not come as Law had anticipated. No doubt his efforts were a -stimulating influence, but he was to discover that trade, which was not -of natural growth, seldom prospered by purely artificial means. - -William Law on his arrival in Paris was received with that welcome -which his relationship with the Comptroller-General naturally secured -for him. He was introduced immediately to the Regent, and was not -only made one of the directors of the Bank, but was also appointed -to the office of Postmaster-General--a circumstance which alone -indicates the commanding influence Law exercised over the Regent and -the government of France. These two brothers lived in princely fashion -in Paris, honoured and courted by everyone from the Regent downwards. -Each accumulated enormous wealth, but directed its investment into -different channels. William purchased land and estates in his native -country, not that he foresaw the possibility of the collapse of his -brother’s schemes, but because he had no desire to permanently settle -in France. John, on the other hand, with the intention of becoming -a Frenchman so far as that was possible in spite of his origin, -acquired great estates throughout the land of his adoption, and thus -incidentally evinced his confidence in the sterling value of his -financial schemes. His nephew compiled a list of his more important -investments, aggregating almost 8,000,000 livres:-- - - La Marquisat d’Effiat 800,000 livres. - La Terre de la Rivière 900,000 „ - La Marquisat de Toncy 160,000 „ - La Terre de la Marche 120,000 „ - La Terre de Roissy 650,000 „ - La Terre d’Orcher 400,000 „ - Terre et Bois de Brean 160,000 „ - Marquisats de Charleville et Bacqueville 330,000 „ - La Terre de Berville 200,000 „ - La Terre de Fontaine Rome 130,000 „ - La Terre de Serville 110,000 „ - La Terre d’Yville 200,000 „ - La Terre de Serponville 220,000 „ - La Terre de Tancarville 320,000 „ - La Terre de Guermande 160,000 „ - Hotel Mazarin, et Emplacemens Rue Vivienne 1,200,000 „ - Emplacemens Rue de Varenne 110,000 „ - Emplacemens de la Place Louis le Grand 250,000 „ - Partie du fief de la Grange Batelière 150,000 „ - Marais on Chartiers du Fauxbourg St. Honore 160,000 „ - Maisons, surtout dans Paris 700,000 „ - Les Domains de Bourget 90,000 „ - Quelques petites terres, comme Valançay, - St. Suplice, etc. 350,000 „ - -Not by any means a strikingly large list for the man who had in so few -years enabled the Regent and innumerable members of the aristocracy to -accumulate vast wealth and rehabilitate the fortunes which successive -generations had squandered in reckless extravagance. - -That Law did not merely use the great power and influence he had -acquired in the government of France for the purpose of promoting his -own financial schemes and his own personal advantage is evident from -the radical reforms he accomplished in the fiscal arrangements of that -country. The principles upon which he based his fiscal policy were -of the most advanced and enlightened character. They were liberal, -and consequently had strict equality for their object. The system of -taxation which prevailed not only showed many anomalies but lent itself -to the grossest abuse. Monopolies of every description abounded. -Officials swarmed throughout the country, and by their extortionate -levies upon every branch of trade checked industrial progress in every -direction. It is said that in Paris itself the number of officials -equalled the number of people engaged in the various trades they were -supposed to supervise in the interests of the nation. Free trading -intercourse was also limited by the existence of a system of provincial -protection which sought to prevent the goods of one province from -entering, except under payment of prohibitive dues, the markets of -another province. - -Law was alive to the prejudicial effects of all these factors upon -the industrial prosperity of the country, and also upon the general -well-being of the people, and endeavoured as far as possible to remove -or at least to modify them. His ideal was the adoption of a single tax -to be levied in proportion to the wealth of the individual. Too many -vested interests existed however for the accomplishment of so sweeping -a reform, and he had to satisfy himself with measures more moderate -in their sweep. It is a tribute to his fearlessness that during the -winter of 1719–20 he introduced innumerable changes in the method and -incidence of taxation, and that in spite of the overwhelming opposition -of those who were thus deprived of continuing the old extortionate -system to their own pecuniary gain. By wholesale modification of -duties and charges, he succeeded in effecting substantial reductions -in the price of such necessaries as grain, corn, coal, wood, butter, -cheese, and eggs. Inland protective duties were abolished on all -articles classed as necessaries or as raw material, and on one item of -import--English coal--the tariff was removed for the benefit of French -manufacturers, whom Law was most anxious to encourage. - -But Law’s horizon was not bounded by the commercial and industrial -interests of the country. He recognised the great part which education -plays in the progress of a nation, and determined to give such -facilities as would place the highest education within the reach of -every one. He accordingly appropriated a twenty-eighth part of the -postal revenue for the endowment of free education in the University of -Paris. He thus conferred upon France a benefit of the most invaluable -character, and by this measure alone merited the reputation of an -enlightened and broad-minded statesman. - - - - -CHAPTER IX - - Law’s designs against England’s political and industrial - position.--Earl of Stair’s correspondence with Mr. Secretary - Craggs.--Stair accused by Law of threatening the safety of - the Bank.--Stair’s recall intimated.--Lord Stanhope sent to - conciliate Law.--Threatened rupture between England and France - over question of evacuation of Gibraltar.--Stair endeavours to - justify his hostile attitude towards Law.--His apprehensions as - to Law’s purpose in acquiring South Sea stock.--The humiliating - nature of Stair’s dismissal. - - -[Illustration] - -The year 1720 was a momentous one in the history of the Mississippi -Scheme. Its commencement was full of promise from many points of view. -It witnessed the realisation of Law’s ambition to gather into his -hands the reins of government in practically every department of the -administration. It witnessed also the zenith of prosperity for all -those gigantic schemes and undertakings which were to make France the -great centre of trade and finance for the world. But the promise for -the future which these circumstances seemed to contain was only of few -months’ duration. Yet these few months saw Law the most striking and -commanding figure of his time throughout Europe. We have already seen -the position to which he had attained in the internal affairs of France -itself; how the government of that country was practically under his -control; and how by sheer energy and force of character he had extended -his influence over every class of society. His fame however reached -far beyond the confines of France. He was regarded as an international -force by other nations. Not only was his system copied by other -countries, but he was bent on following a line of foreign policy for -France which threatened the political and industrial prospects of these -countries, and caused them great alarm, temporary no doubt, probably -foolish, but real while it lasted. - -Law’s designs were chiefly directed against the power of England. The -English government recognised this, and considered Law a person to be -conciliated. Their attitude towards him was peculiarly weak, and led to -the recall of the minister at the French court, the Earl of Stair. That -minister on his arrival in Paris in 1715 had called upon Law, not only -as a friend, but because he adjudged him even then as a man of great -importance. Their friendship however was of short duration. It rapidly -degenerated into merely formal intercourse, and then into active -hostility. The latter stage was reached in 1719, when we find Lord -Stair intriguing against Law in his attempt to displace Dubois, foreign -minister of France, by Torcy, who would have been a more pliable -instrument for the carrying out of his designs. Lord Stair’s letters -to Mr. Secretary Craggs at this time are full of interest, and show the -nature of the hostility between himself and Law, and the progress of -their quarrel. On August 30th, 1719, he writes--“In a long conversation -I had with the Abbé (Dubois) to-night, he seems apprehensive that Torcy -gains ground, and that there may be a close connection betwixt Law and -Torcy, with views to turn the Abbé out. I am afraid this apprehension -of the Abbé is not without ground; but, however that may be, I am -persuaded we shall quickly see this court take airs which will not be -easy to bear; and I am not a little apprehensive that we shall very -quickly see them come into measures that we shall have no reason to -like. If this should be true, we must not, in my poor opinion, seem to -take any notice of it; but at the same time, it will behove us to exert -ourselves to find out ways, without loss of time, to get rid of the -pressure of the public debts.” - -A few days later Lord Stair had apparently concluded that he was -powerless to stem the advance of Law’s influence, and writes -accordingly--“Supposing I had talents, and that I were fitter to serve -you at this court than another; you will be obliged to change your -minister. You may depend on it, this court, with their fortune, will -change their measures (_i.e._, their foreign policy); and they will -desire to have a man here that they may be either able to gain or -impose upon. You must henceforth look upon Law as the first minister, -whose daily discourse is, that he will raise France to a greater -height than ever she was, upon the ruin of England and Holland. You -may easily imagine I shall not be a minister for his purpose. He is -very much displeased with me already, because I did not flatter his -vanity by putting in Mississippi. I did not think it became the King’s -Ambassador to give countenance to such a thing, or an example to others -to withdraw their effects from England, to put them into the stocks -here; which would have been readily followed by many. I have been in -the wrong to myself, to the value of thirty or forty thousand pounds, -which I might very easily have gained if I had put myself, as others -did, into Mr. Law’s hands; but I thought it was my duty, considering my -position, not to do so. - -“The Abbé told me, that if some people prevailed, measures would be -changed; that Torcy of late took the ascendant very much; and that -the Regent discovered a great partiality towards him; and that, if it -continued a little longer, he, the Abbé, would lay down. I am sure Law -is in this thing, for he will be for removing everything that does not -absolutely depend on him, and that can, in any manner, stand in his -way to hinder him to be first minister. Law’s heart has been set upon -that from the beginning; and we stand too directly in the way of his -ambitious views, for France to imagine that a good understanding can -subsist long between the nations, if he comes to govern absolutely.” - -On 9th September, Lord Stair returns to the question of the -displacement of Dubois, and seeks to impress the government with what -he conceives to be the gravity of the situation. “I told you, in my -former letter, what the Abbé Dubois said to me upon the subject of -Torcy’s taking the ascendant over him in the Regent’s favour, and -of the close connection he, the Abbé, apprehended was between Torcy -and Law. He has since confirmed the same thing to me in several -conversations; and seemed to be in very great concern, and to have -thoughts of laying down, which I advised him not to do. The Abbé -likewise told me that there were many things which were hid from him; -and that he apprehended there was some change of measures. - -“I come now to take notice of another thing to you, which in my opinion -is very much to be minded; and that is the spirit, behaviour and -discourse of the man whom, from henceforth, you must look upon as the -first minister, and that is Mr. Law. He, in all his discourse, pretends -that he will set France higher than ever she was before, and put her in -a condition to give the law to all Europe; that he can ruin the trade -and credit of England and Holland whenever he pleases; that he can -break our Bank whenever he has a mind, and our East India Company. He -said publicly the other day at his own table, when Lord Londonderry was -present, that there was but one great kingdom in Europe, and one great -town; and that was France and Paris. He told Pitt that he would bring -down our East India stock, and entered into articles with him to sell -him at twelve months hence a hundred thousand pounds of stock at eleven -per cent. under the present current price. - -“You may imagine what we have to apprehend from a man of this temper, -who makes no scruple to declare such views, and who will have all the -power and all the credit at his court.” - -Later in the same month he says, “I hope our good friends in the -North will make our affairs in Parliament easy. We must in that case -exert ourselves to do something decisive towards the payment of the -public debts, if we do not intend to submit ourselves to the condition -in which Mr. Law pretends to put all Europe. He says, _il rendra la -France si grande que toutes les nations de l’Europe, enverront des -Ambassadeurs à Paris, et le roy n’enverra que des couriers_.” - -From opposition on the ground of policy alone to personal differences -was an easy stage. Law, conscious of his own power, had been hitherto -somewhat indifferent to the efforts of Lord Stair to weaken his -direction of the foreign policy of France. A rumour, however, which -gained circulation towards the end of the year determined him to rid -the French court of a man who he thought was moved not less by personal -enmity than by the interests of the country he represented. Two -circumstances had happened of an alarming nature which threatened the -safety of the Bank and the value of Mississippi stock. A run had been -made upon the Bank, and an attack upon the market had been organised -with a view to depreciating the price of shares. These disturbing -events had been attributed to Lord Stair, and Law at once informed the -Regent to whom the matter was of great concern. Lord Stair was innocent -of the charge, and naturally sought an interview with the Regent in -order to disabuse his mind. The result was satisfactory so far as the -assurances of the Regent went, but displayed the latter’s duplicity -since he was throughout unquestionably on the side of Law. Stair’s -letter descriptive of the interview was dated 11th December. “Several -days ago I was informed on very good authority, that Mr. Law told the -Duke of Orleans that it was I who had latterly been the cause of the -attack on the Bank. I thereupon resolved to clear myself with him, -and I turned the conversation in such a way that he mentioned he had -been told that I had been the cause of the attack. I said to him, ‘My -Lord, I understand that Mr. Law has had a talk with you, and I am very -pleased to have the opportunity of proving to you that he is absolutely -false in all his statements. It is true that the subjects of the King, -my master, have considerable wealth in this country, which it would -have been very easy for me to have used to the prejudice of the Bank. -But if it is true that neither I nor any other subject of the King had -taken billets in order to have them changed at the Bank; if we have not -placed shares on the market in order to depreciate them; if it is true -that I have had no communication with those who have run on the Bank, -you ought to be convinced that Mr. Law’s talk is not only false but is -the most atrocious calumny and the most unworthy; a calumny which does -not tend only to deceive you on my account, a trustworthy servant at -all times, through gratitude and through affection; but which tends to -embroil you with my master, the King, who is your best friend and ally; -for I know that Mr. Law stated at the same time that what I did in this -respect I did by order of my court. - -“Now, if Mr. Law cannot prove to you that one of these three points is -true, since I boldly submit to you that all three are false, he ought -to be considered by you as a calumniator who desires to deceive in -things of great importance. But it is not merely of recent date that I -know the good intentions of Mr. Law for his country, and the designs -he has to set the King at variance with you. It is only eight days -since Mr. Law publicly threatened, in presence of several subjects of -the King, my master, to write a book for the purpose of convincing the -world that Great Britain could not possibly pay her debts. Such are the -ordinary and public discourses of Mr. Law. You can judge what effect -that can produce when a man who pretends to be your first minister -delivers such discourses. I have known it for a long time, but I have -refrained from saying anything to you because I was persuaded that -Great Britain would not think the same; and because I regarded these -discourses as the effects of the foolish vanity and inebriation of -Mr. Law whose head I have noticed for some time, has been turned.’ I -then told the Duke of Orleans many discourses of a similar nature. The -Duke listened with surprise. At last he said to me, ‘My Lord, they are -truly the discourses of a fool.’ I replied, ‘I say nothing to you that -I would not say in Mr. Law’s presence, and that I could not prove; you -can now judge if it would have been astonishing if I had really acted -in the way Mr. Law led you to believe I had done, but I am guided by -the respect I have always had for your interests.’ - -“The Duke of Orleans told me finally that he was quite satisfied -with what I had just told him; that he had always looked on me as -his friend, and that he had difficulty in believing that I wished -to prejudice his operations. That is substantially all that passed -between the Duke and myself on the subject of Mr. Law. You can make the -necessary reflections. There is no need of comment.” - -Stair’s following letter communicates an apparent determination of the -Regent to exclude Law from any influence on the relations of France -with England, but also indicates his hesitation to place too much -reliance upon the Regent’s assurances. “The Regent,” he writes, “so -strongly perceived the dangers into which Law would precipitate him, -that some days ago he repeatedly spoke very strongly to me of the -vanity, presumption, and insolence of this man. He said he knew Law to -be a man whose head had been turned by excessive vanity and ambition; -that nothing could satisfy him except to be absolute master; that he -had so great conceit of his own abilities and so great contempt for the -talents of other men that he was impracticable with every one; that he -had tried to make him work with the cleverest men in France, and that -he could not agree with them for two consecutive days, always being -impatient at the slightest obstacle or contradiction. He told me that -he had rated Law soundly for his insolent discourses which alarmed -everyone in such a way that he had reason to believe that Law would -contain himself; but that he saw clearly no bridle could hold him. -‘But,’ said the Regent, ‘believe me, I shall arrange matters so that -there will be no risk of Law embroiling me with the King nor separating -me from my allies. He is necessary to me in my financial affairs, but -he will not be listened to in political matters, and I shall be on my -guard against his mischievous designs.’ I should like to believe that -the Regent said what he thinks, and that he really thought it at the -moment he spoke to me; but, with all that, a great treasurer, such -as Law, is first minister wherever he chances to be in office; and -if Law’s system is established we are equally lost sooner or later. -Further, believe me, we ought to be aware of this nation; we can never, -with safety, count on their friendship, inasmuch as you could be a -dangerous enemy to them, and can bring home to them the great injury -we could cause them if they disagreed with us. On this account their -friendship will be assured; but we shall miscalculate every time we -depend on them in time of need. You will have received a messenger from -the Abbé Dubois, who would inform you that I told him last Thursday -that I would ask to be recalled. It is not from pique; but I see by the -course things are taking that I shall no longer be able to render any -service to the King at this court.” - -In the middle of January, 1720, Lord Stanhope intimated the recall -of Lord Stair to the French minister, and a few days afterwards it -was known throughout Paris. The manner of his recall was by no means -courteous, but Lord Stair received the news with apparently unruffled -temper, and expressed no regret in dimitting office since he recognised -the difficulty and the delicacy of the position in which he had placed -himself. Notwithstanding, however, the manner of his discharge--a -discharge which was virtually a disgrace--he declared that it would -not alter his unchangeable devotion to the service of his King and -country. So serious a view did the English government take of the -probable consequences of Stair’s efforts to circumvent Law that they -deemed it necessary to send Lord Stanhope himself to Paris in order to -conciliate Law and to disclaim any animosity on the part of England -towards him. Such a step showed at once a callous indifference to the -feelings of Lord Stair, and greatly gratified Law, who seemingly -occupied the proud position of being able to bring England to the -humiliating necessity of asking his pardon for the hostility to him -of her minister. Stanhope also promised to give Law’s son a regiment, -and to secure that a writ of summons should be issued calling Lord -Banbury, his brother-in-law, to the House of Lords, a question as to -his title having arisen which had hitherto denied him this privilege. -Lord Stair refers to this step by his government in a letter dated 14th -February, 1720. “As to Lord Stanhope, I have ever had a very great -value and esteem for him; and I have upon all occasions endeavoured to -give him the sincerest proofs of my friendship and faithful attachment -to him; and I dare say it, with great truth, that I have not given him -the least reason to complain of me personally. I am sorry if I have -not been able to deserve his esteem, but I am sure I have deserved his -friendship, at least his good-will. What has happened lately, I own to -you, has piqued me very much, especially the manner of doing it; but -I reckon that has proceeded from his views as a minister, in which I -think he has been very much mistaken. I shall readily agree with you -that if his lordship has gained Mr. Law, and made him lay aside his -ill-will and ill-designs against his country, he did very right to make -all sorts of advances to him, to give his son a regiment, to engage to -bring Lord Banbury into the House of Lords, to sacrifice the King’s -ambassador to him. If I had thought Mr. Law to be gained, I should -very readily have advised to do all these very things and a great deal -more. But if his lordship has not gained Mr. Law I am afraid we shall -not find our account in Lord Stanhope’s supporting, when he is ready -to fall, in making him first minister, and in destroying the personal -credit I had with the Regent, and recalling me from this court, when -my long stay should have enabled me to be better able to judge of -their designs and of their ways of working than a stranger of greater -capacity could probably be. A little time will show who has judged -right. I do most heartily wish, for the good of my country, that I may -be found to have framed a wrong judgment; but I own to you I have seen -nothing yet to make me change my opinion, but on the contrary, new -things every day do confirm me that Mr. Law’s designs and the views -of this court are just what I represented them to be. You do me great -wrong if you say that I advised to break with the Regent if he did not -agree to part with Mr. Law. You will find no such thing in any of my -letters. You will find then, that I thought it was useful to endeavour -to shake Mr. Law’s credit with his master, to make his master jealous -of Mr. Law’s ambition, and apprehensive of the dangers his presumption -might lead him into; and that I thought it was fit to stand in his way, -as much as it was possible, to hinder him to gain an absolute power -over the Regent’s mind, and to obstruct his becoming first minister. I -thought it was fit to make Mr. Law lose his temper and to make him act -in passion and rage. I had not succeeded in all these views when Lord -Stanhope arrived and thought fit to demolish me and all my works at -once. As to Mr. Law, I have no ill-will to him, but as I take him to be -a dangerous enemy to my country, I am afraid time will but too plainly -show that I have judged right in this matter. As to my revocation, if -it was possible I should have a mind to stay in this country, you have -made it impracticable. You have taken all effectual ways that could be -thought of to destroy the personal credit I had with the Regent. You -have made it plain to him that I have no credit with the King, that is -to say with his ministers. Lord Stanhope has declared to Mr. Law that I -shall be recalled, so that is no longer a question. You are under the -necessity of sending another minister to this court.” - -A new element of concern for Lord Stair now introduced itself, and -bulked largely in his subsequent correspondence up to the time of his -departure from Paris. The occupation of Gibraltar by Britain was a sore -point with France and Spain, and many efforts were made at various -times to obtain her dislodgment. Lord Stanhope’s visit to Paris at -this time was taken advantage of by the Regent and Dubois for the -purpose of negotiating its evacuation if possible, and, according -to Stair, he had given some hope of this being brought about. On the -faith of this, the Regent had apparently assured the King of Spain -that Gibraltar would be given up, and felt that his honour was now -involved in this hope being realised. It was soon evident however that -the English government had no intention at any time of entertaining -proposals for its evacuation, and alarm was felt that a rupture might -take place. Law, we are informed by Stair, was anxious to declare war, -and was confident that the resources of France, owing to the operation -of his system, were sufficient to result in a successful issue. He -became very bitter in his conversation about England, and spoke with -a degree of insolence, revolting even to the French. One evening he -invited to dinner Lord Bolingbroke, and so fierce was his denunciation -of the English that the latter vowed he would never again set foot in -Law’s house. On the same occasion one of Stair’s friends had said to -Law, “Sir, what is this rumour which runs through Paris about us going -to have war? I am persuaded that you have nothing to do with it. A -man who thinks of making a flourishing state by commerce, and by the -establishments which require peace, does not think of war.” Law replied -coldly to him, “Sir, I do not wish war, but I do not fear it.” - -Lord Stair’s conclusions were undoubtedly biassed by the deep -feelings of resentment he naturally fostered towards the man who had -accomplished his downfall, and he was too ready to make use of any -rumour which in any degree gave colour to the character of the designs -he attributed to Law. There is no substantial evidence that Law really -went so far as Stair would have us believe, and was using every means -in his power to induce the Regent to make the question of Gibraltar -an occasion for hostilities. It is impossible to say more than that -Law was merely an interested spectator, but not an active participant -during the progress of the affair. As first minister, he would be -under the necessity of guarding his opinions when expressed upon the -subject, but there is no reason to believe that he meant more than he -said when he stated he did not wish war, but did not fear it. Yet Stair -sees underlying this remark the insolence of Law with which he has been -endeavouring to impress the government at home, and points out that if -this be his attitude when his system is likely to fall to pieces, what -would it be if his system yet proved a success. - -Notwithstanding Stair’s efforts, however, the English government were -not inclined to adopt his views as to Law’s designs, and indicated -that he had simply allowed himself to be carried away by pique and bad -temper. Stair could not of course allow an accusation such as this to -pass unchallenged and replied, “God knows, that I was only actuated by -feelings of zeal and of attachment towards my King and to my country. -I have spoken truly, as a clear-headed man, whilst you have treated -me as a dreamer; although I can say, without conceit, that you have -reason to trust me and to distrust those to whom you have given trust. -I do not speak of Lord Stanhope. I know him to be an honest man, and -a faithful servant of the King. I respect him and honour him; and -although I have had cause to complain of him, I have no resentment -against him. He believed he was serving the State in humiliating me. He -was deceived. Any man can be deceived. I’ll be bound for it, if you had -left it to me, Law would have been lost at the present moment, and the -understanding between the King and the Duke of Orleans would have been -closer than ever. At the present time it is necessary to think as soon -as possible about sending another minister to this court. For God’s -sake, send an honest man here before everything; and a clever man if -you can find him.” - -Stair seems to have created an impression in the mind of his government -that he wished the King to demand from the Regent a promise that he -would depose Law from office at the risk of going to war; and early in -March, Mr. Secretary Craggs wrote that the King would not entertain -such a proposal. Stair had not, however, reduced the matter to such an -issue, and on 12th March stated clearly the position he had taken up. -“I must beg pardon,” he wrote, “to say two things, first that I never -did put things upon that issue, and in the next place, that there was -no need of putting things upon that issue. You will find in my letters -that I represented to the Duke of Orleans that Law, by his vanity and -presumption, was leading him into great dangers and inconveniences, -both at home and abroad; that Law, by going too fast, and by taking -arbitrary measures, was in a way to ruin his Royal Highness’s credit -with the nation, and to overturn the whole system of the finances; and -that, at the same time, Law was, by his discourse and conduct, doing -everything that lay in his power to destroy the good understanding -between the King and the Regent, and between the Regent and the rest -of his allies, and I bade the Regent beware how he trusted the reins -of his chariot to that Phæton Law, because he would overturn it. The -answer the Regent made me to these representations was, that he knew -that vanity and ambition had turned his head; but that he, the Regent, -would take care to keep a hand over him, and to contain him within -bounds in the management of the finances; that he should have nothing -to say in public affairs; that, if he pretended to meddle, the Regent -would not listen to him; and that I might be well assured that it -should not be in his power to create an ill understanding between him -and the King. - -“I believe nobody can fairly say that there is anything in my -representations which imported that the King would quarrel with the -Regent if he did not lay Law aside. Nor can they say that there is -anything in the Regent’s answer which imports that he took what I said -in that sense. On this foot things stood. I spoke very freely to the -Regent what I had to say on the subject of Mr. Law, and His Royal -Highness received what I said in a very friendly manner. - -“When Lord Stanhope arrived, he thought fit to acknowledge Mr. Law as -first minister, and to _consider him as a much greater man than ever -Cardinal Richelieu or Cardinal Mazarin had been_; to tell the Regent -that the King was very well satisfied with Mr. Law, and did not in any -manner complain of him; that what I had said was entirely out of my -own head, and without, and even contrary to orders; and that for so -doing I should be recalled. Since that time Mr. Law has acted as First -Minister, and I have had no intercourse with the Regent but in formal -audiences, to deliver such messages as I received from Court, and to -receive short and formal answers. - -“In what manner Mr. Law has acted as First Minister, I may save you the -trouble of telling you. You have seen it and felt it. - -“For me; there was nothing left for me to do, but to desire to be -recalled, unless I could have prevailed with myself to have acted the -part of a fool, or of a knave, or of both. What I have said above, I -believe, is sufficient to prove that things were not brought to that -extremity that there was a necessity to declare war against France, or -to make humble submission to Mr. Law. - -“What has happened of late may convince you, I am sure it will the -world, that I knew Mr. Law and this court better than other people do. -Neither vanity or resentment prompts me to say this. - -“As to the charge you bring against me, that I have exclaimed against -the minister personally, and against these measures, it does not lie -against me. I have behaved myself with great modesty and moderation on -this side. I have never spoken of Lord Stanhope but with respect and -esteem. I have writ upon that subject to yourself with great freedom, -and to no other man living, my uncle Sir David excepted, to whom I -endeavoured to clear myself of the heavy charge you brought against me. -I shall not compare my behaviour with that of other people’s. I know -how I have been represented to my master and my country. I propose no -other revenge to myself than to show by my conduct that they have been -unjust to me, and that I deserved fairer usage. - -“If the charge you mention is laid against our ministry, viz., ‘That -Law is for setting up the Pretender, and they are setting up Mr. Law; -that the Regent will play us false; and that I have been ill-treated -for penetrating these designs; that we are in the hands of France and -dare not own it; that he understands himself with Spain, and that we -shall be the dupes of this alliance, and of this war.’ If this charge -is laid against the Ministers, it shall not be laid against them by my -words. I shall content myself to shew my conduct, that no part of that -charge lies against me. - -“Believe me, my dear Craggs, I have no design to enter into any cabals, -nor to make any broils in the state. If I endeavour to show you are -wrong, it is with a design that you may get into the right way again -as soon as possible, that you may not continue to deceive yourselves. -Ask and take the assistance of people who love the King and his -government. You shall always be sure of my little help to support this -ministry. I am not for changes; nor can I be influenced by private -resentment, which, I declare to you upon my honour, I am ready to -forget, as if I never had any reason to complain. My dear Craggs, take -my word for it, Mr. Law’s plan is formed to destroy the King and his -government and our nation; and he will certainly bring his Master into -it; nor is there any other way to divert him from that design but my -showing his Master that it is dangerous for him to attack us. There is -nothing but an appearance of strength and firmness on our side, or the -miscarriage of Law’s system on this side, can save us from a war with -France. No personal credit that anybody may flatter themselves they -have with the Duke of Orleans, will signify anything to divert it. Your -letter about Gibraltar was very well writ, and it was very right to -write it; but I will give you my word for it, it will have no manner -of weight here if Law’s system takes place. If they can bully the -Ministry, or buy a party in England, we must part with Gibraltar; and -when we have parted with it we shall be every way as little secure of -peace as we are at present; and upon many accounts less able to support -a war.” - -[Illustration: JOHN, 2ND EARL OF STAIR. - -From a Portrait in The National Portrait Gallery, Edinburgh.] - -Fresh apprehension seems to have been aroused in Stair’s mind as to -Law’s apparently deep designs for the accomplishment of some great -injury to English interests by the fact that Law about this time had -purchased large quantities of South Sea stock. He communicated his -apprehension to Craggs, who was not disposed to lay great stress upon -the circumstance. This seems to have somewhat allayed his fears, and he -accordingly wrote on 30th April: - - “I am glad you do not apprehend that Mr. Law is in a condition to - do us any great hurt by what he gets by the rise of our South Sea - Stock. Though I know that Law will brag, yet I own to you I did - apprehend that he had gained considerably and that he might be able - to do us a good deal of mischief by withdrawing a very great sum - himself, and by tempting other foreigners to follow his example. - I suppose you know the great sums Mr. Law pretends to have in our - stocks were bought in Holland. - - It seems to me to be a very dangerous thing in such a country as - ours, where things are so very uncertain and fluctuating, to have - foreigners masters of such vast sums of money, as they must needs - have at present, by the rise of our stocks. This is a terrible - handle to hurt us by, in the hands of such a man as Law. I wish our - monied men may be attentive enough to the security of the nation in - this point; and that they may not let themselves be blinded by the - flattering appearances of present gains. - - I am very glad to see you think so sanguinely as to the payment of - our national debts. It will be very important to give the world - such impressions of our situation. By several letters I have seen - from very understanding men in Holland, I should be afraid that - such impressions might prevail there and at Geneva, which would be - very hurtful to us, for both the Dutch and the Geneve have very - great sums in our stocks. - - I am afraid we have not money enough, either in coin or in paper, - to move so vast a mass as our South Sea Company now comes to be. - The national bank would have been a very great help. I must own - I apprehend that if that matter is not settled at this time, you - will meet with great opposition at any other time by the South Sea - Company, which, from this time forward, we are to look upon as a - very powerful body. - - I am afraid our people in England think too neglectfully of Mr. - Law’s schemes. I own to you, that, as this kingdom is disposed, - there is a great odds to be laid that it will miscarry; but it is - not impossible, far from it, that it may hold long enough to do us - a good deal of mischief. Another thing I dare be bold to say--it - cannot succeed without undoing us; and if Mr. Law can compass our - ruin, I think he is in a fair way to carry through his project - in France. I know Mr. Law himself thinks so too, and that being - the case we may be very sure he will do us all the mischief in - his power. You cannot think that power is small, considering the - absolute authority he has acquired over the Regent. That being so - I am sure you will agree with me that we cannot be too attentive - to discover, prevent, and defeat the designs he may form against - us. His designs are no trifling ones; they strike at the root. - As to the behaviour of this court towards ours, it will depend - entirely upon what happens in Sicily, and upon the King of Spain’s - disposition towards the Regent, which is naturally bad, and which, - I have reason to think will not be made better by the advice he - receives from France. As to our friend the new Archbishop of - Cambray, (the Abbé Dubois) he will do Law all the hurt he can, - because he is firmly persuaded that Law is determined to turn him - out. The truth of the matter is that Law does hate and despise - him exceedingly, and it is no less true, that the Abbé has but - very little credit at present with his master, though his master - affects to say the contrary. The Abbé, with all the desire he has - to flatter himself, sees through the disguise.” - -The closing letter of this correspondence shows how humiliating was the -dismissal of Lord Stair,--humiliating even to the extent of his being -denied the usual privilege of seeing his sovereign on his return--and -how complete was the triumph of Law over his former friend. - - “I see plainly I shall not be able to see the King of England. - It is a great while ago since Mr. Law told his friends here, - that I should not be allowed to have the honour of seeing the - King. It is pretty hard to digest I own, if, after serving the - King very faithfully, very zealously, and with some success, I - should have the mortification not so much as to have my master’s - good countenance. However that happens to be, I am very glad His - Majesty’s affairs go so very well, and that there is so good an - understanding amongst them that serve him. - - I shall be able to tell a good many curious particulars concerning - the state of affairs here, which are not so very proper to be put - into a letter. Mr. Law still brags that he will make our stocks - humble, by withdrawing the French effects. He seems more bent than - ever to do us mischief, believing it the only way he has left to - save himself and his system. How far he may be able to draw his - master into his notions, God knows. His master professes the best - intentions imaginable. In the meantime they go on with the new - levies with all the application imaginable; and I am assured they - are giving out commissions for levying some more German regiments - in Alsace. All over France they talk of a war with Britain, and - the Jacobites are in greater numbers at Paris, and more insolent. - They talk of great changes at this court; and that the Archbishop - of Cambray is to be sent to his diocese. Law’s friends give out - that he has more credit than ever at the Palace Royal. That may - be; but I dare swear he has lost a great part of his master’s good - opinion, though, at the same time, he is very unwilling to renounce - the fine views Law had given him. I think we have nothing to fear - from France at present but by surprise; but, in my opinion, it will - behove us to be very attentive against something of that kind. - It is plain the Jacobites have their heads filled with some such - notion. - - As soon as Sir Robert arrives, I shall certainly set out and leave - some friends to take the best care they can to my effects.” - -Thus was brought to a close an embassy which offered at its outset -so bright promises, but which ended in virtual disgrace. It is very -questionable if any other result could have been possible. Lord Stair -possessed all the necessary qualifications for a successful ambassador, -and his failure can hardly be said to have been due to want either of -ability or of tact. Rather was it due to the integrity of his motives -and to the high estimate he had of his office. Had he yielded to the -temptation which Law set before him to enrich himself by speculation -in Mississippi stock, his difference with him might never have -originated, and his mission might have had a happy ending. But it is -futile to speculate on probable consequences had events been other than -they really were. On the other hand it is a tribute to Lord Stair’s -foresight that he always predicted the downfall of Law’s schemes, and -this he did even when they were at the height of their prosperity and -gave every indication of probable success. - - - - -CHAPTER X - - The beginning of Law’s difficulties.--The Bank’s reserve of specie - begins to be depleted.--Law attempts a remedy by altering - the standard of the coinage, and restricting the currency of - specie.--Temporary success of remedy.--Domiciliary visits - resorted to for detection of hoarded specie.--Bank and - Company United.--Discharge of National Debt.--Use of the Rue - Quincampoix prohibited as a stock market.--The assassination of - a stock-jobber by the Comte de Horn, and the latter’s execution. - - -[Illustration] - -Events now very rapidly developed in the history of the Bank and of -the West India Company. Law’s accession to power marked the beginning -of his difficulties--difficulties which taxed his judgment to the -utmost and forced him into the employment of expedients which he -himself foresaw could not permanently ward off injury to his schemes. -He thought, however, they might serve their purpose until his schemes -assumed a less fluid condition, and that their establishment in good -working order would render them proof against attack from such outside -forces as might array themselves against him. - -The first indications of danger were becoming apparent in December, and -by the following month had assumed an alarming aspect. Shares had been -selling at the very high price of 10,000 livres each, but by concerted -action amongst several large holders and speculators that price was -gradually forced up until it reached the unprecedented figure of 20,000 -livres. This was now their opportunity. Artificial inflation could not -be carried to greater lengths, and accordingly a process of extensive -unloading commenced. These speculators, however, suspicious of the -stability of the new system, were not satisfied with holding notes, -the value of which might depreciate at any moment, and immediately -presented them at the Bank for their equivalent in specie. Law -perceived that such a process if allowed to run unchecked would soon -deplete the Bank of all its available resources. Refusal to exchange -would be suicidal, and if public confidence could not be maintained -without recourse to artificial means, the currency of the notes would -require to be forced directly or indirectly. - -One of the chief offenders was the Prince de Conti, a near relative of -the Regent. This nobleman had amassed great wealth through engaging -in speculation under Law’s guidance, but had alienated the latter by -his insatiable appetite for still greater fortune. Unable again to -enlist the services of Law in his interests, he evinced towards him -that bitterest form of ingratitude, the ingratitude of the man who -is favoured to him who does the favour. He attacked Law in his most -sensitive part by realising great quantities of stock, and converting -the notes he received in payment into money at the Bank, an operation -which required the aid of three waggons. Many speculators who had -preferred specie to paper transmitted their money abroad for safe -investment, and in the course of a few weeks several hundred millions -of livres were sent out of the country. A few also hoarded their wealth -in secret places until the time would come when they could without fear -employ it openly. - -The first step taken by Law with a view to placing a check upon this -continuous drain on the reserves of the Bank was the issue of a decree -on 28th January, depreciating the coinage by raising the price of -the silver marc to 54 livres. At the same time the interest of money -was reduced from 4 to 2 per cent. Many people refused to bring their -specie to the Bank for recoinage, and then commenced that system of -domiciliary visits which under subsequent decrees worked with so much -tyranny and for a time absolutely destroyed not only public but also -domestic confidence. - -The result of the decree was not so satisfactory as had been -anticipated, and in quick succession other decrees were issued -introducing alterations in the standard of the coinage. The purpose -of this was to discredit specie as far as possible as a medium of -exchange, and by giving the note the appearance of fixity in value -to raise its credit for currency purposes. Payments in specie were -only allowed to the extent of 300 livres in gold, and of 10 livres -of silver, sums respectively equivalent to £12 10s. and 8s. 4d. -in our money. Public offices could only receive payments in bank -notes, except where the amounts of these or the balances were less -than the lowest denomination of the note. And then the employment -of gold and silver for other than coinage purposes was strictly -prohibited without the royal license. These measures, however, were -still unequal to restoring public confidence in the paper of the -Bank, although in addition to those already specified, decrees were -published fixing the value of paper at five per cent. and then at ten -per cent. above the corresponding nominal value of specie. Trade was -now beginning to experience the bad effects of a restricted currency, -and representations were strongly made to Law and to the Regent to -restore the currency to its previous position. This of course Law was -unable to do without facing the consequences of seeing the bulk of the -specie withdrawn altogether not only from circulation but from the -country. A financial and industrial crisis would have at once been -precipitated. To meet the situation, Law resolved upon bold and extreme -measures. On the pretext that there were 1,200,000,000 livres in specie -lying idle in the hands of financiers and successful speculators, an -edict of Council was published on 27th February, which ordered “that -no person, of whatever estate or condition, not even any religious -or ecclesiastical community, should keep more than 500 livres in -coined money or ingots, under pain of confiscation of the excess, and -of a fine of 10,000 livres.” All payments exceeding 100 livres in -amount were to be made without exception in paper, and the purchase -of jewellery, plate and precious stones was declared illegal if made -for purposes of investment. To provide against concealment of specie -informers were promised a reward of half the sums disclosed, and all -government officials were ordered to make search wherever ordered by -the directors of the Bank. This decree was followed on 5th March by one -which further debased the currency by raising the price of the silver -marc to 85 livres, and on 11th March by a third, by which gold specie -was to be withdrawn from the currency from and after 1st May following, -and silver specie, except the smaller pieces which were necessary for -odd change, from and after 1st August following. - -These various decrees wrought a revolution in the fiscal arrangements -of the country. No one appreciated more fully their danger than Law -himself, but extraordinary circumstances such as those with which -he was forced demanded the employment of extraordinary methods to -counteract them. He was presented with the alternative of certain -collapse of his schemes if he did not resort to arbitrary measures, -or of a possible chance of saving the situation if he could force -the currency of paper by withdrawing all the specie from circulation -and holding it in the hands of the Bank. Had he succeeded in doing -this, confidence in the notes of the Bank would undoubtedly have -largely been restored since that depends entirely upon the knowledge -of the public that behind them there are liquid reserves available for -conversion whenever required. It is questionable if any other methods -could have been devised than those followed by Law, and in judging -their character it is necessary to bear in mind the ultimate object he -had in view. - -It was natural that these tyrannical steps should have had the -immediate effect of rousing a storm of opposition amongst the public -towards Law, and if we are to believe Lord Stair, they also prejudiced -him in the eyes of the Regent, to whom the hostile attitude of the -people was a matter of grave concern. On the day following the issue of -the decree of 11th March, he wrote to Craggs, “The rage of the people -is so violent, that, in the course of one month, he will be pulled to -pieces; or his master will deliver him up to the rage of the people. -You may depend upon it that he is mightily shaken in his master’s -good opinion, who, within these few days last past, has used him most -cruelly to his face, and called him all the names that can be thought -of, ‘Knave and madman,’ &c. He told him he did not know what hindered -him to send him to the Bastille; and that there never was anyone sent -thither deserved it half so well. To make matters better, Law’s head is -so heated that he does not sleep at nights, and he has formal fits of -phrenzy. He gets out of bed almost every night and runs, stark staring -mad, about the room making a terrible noise; sometimes singing and -dancing, at other times swearing, staring and stamping, quite out of -himself. Some nights ago his wife, who had come into the room upon the -noise he made, was forced to ring the bell for people to come to her -assistance. The officer of Law’s guard was the first that came, who -found Law in his shirt, who had set two chairs in the middle of the -room and was dancing round them, quite out of his wits. This scene -the officer of the guard told Le Blanc, from whom it came to me by a -very sure conveyance. Le Blanc is in despair about the state of Law’s -health and discredit in which he stands with the Regent. At the same -time, there is a most formidable party formed against him, and almost -everyone who held their tongues out of fear, now take courage to speak -to the Regent upon his character; so that they believe the Regent is -only withheld by shame from sacrificing him to the resentment of the -nation. Law, on the other hand, says, that if they will give him but a -little time, he will set everything to rights; that he will raise the -credit of the stocks; turn the course of the exchange; sink the stocks -in England, and put everything in that country into such disorder that -it shall plainly appear that he can do everything in that country he -pleases. In order to that, he has prevailed with Croisset, André, -and several other people, who had very great sums in our stocks, to -withdraw their money and to remit the greater part of it back into -France; with the rest, he proposes to turn the course of the exchange -and to carry on his other designs. He proposes further, in order to -alter the course of the exchange, to lower the value of the specie in -France, till the crown is brought down by degrees to three livres; and -this _arret_ is to come out in a few days.” - -Law’s object was to a large extent gained so far as it aimed at -replenishing the reserves of coin at the Bank. During the month -of March no less than 300,000,000 livres were deposited, a sum -undoubtedly large but still short of being an adequate security -against the enormous mass of paper afloat, which has been estimated at -2,600,000,000 livres. These deposits were at the same time maintained -in full strength by the operation of the decree of 27th February, -which relieved the Bank of the necessity of repaying at any time more -than 500 livres in specie. Success however limited as it was, was only -secured at considerable cost to Law’s reputation. The domiciliary -visits which were made use of for detecting hoarded coin created -widespread and bitter resentment. A feeling of deep distrust, of -insecurity, and of fear crept through the community. The reward for -information was so great that sons betrayed their parents, brothers -their sisters, servants their masters. Friend betrayed friend, and -enemies had an effective instrument of revenge. “Never before had -sovereign power been so violently exercised, never had it attacked in -such a manner the temporal interests of the community. Therefore was -it by a prodigy, rather than by any effort or act of the government, -that these terribly new ordinances failed to produce the saddest and -most complete revolutions; but there was not even talk of them; and -although there were so many millions of people, either absolutely -ruined or dying of hunger, and of the direst want, without means to -procure their daily subsistence, nothing more than complaints and -groans was heard.” - -Among those who were ruined in their fortunes at this time was one of -the directors of the Bank itself. A domiciliary visit, prompted by -one of his enemies, resulted in the discovery of 10,000 crowns, which -were confiscated. For failure to declare his hoard and deposit it in -the Bank he was fined 10,000 livres and lost his appointment. The -brothers Pâris were also among the sufferers. They were detected in -the act of conveying 7,000,000 livres into Lorraine, and a visit to -their residences brought into the coffers of the Bank an additional sum -of like amount. These confiscations and many others of more or less -substantial sums were published abroad in order to induce others to -conform to the edict from fear, and in many cases the prospect of loss -of fortune was regarded a less evil than possibility of discovery with -all its attendant penalties. There is in fact every reason to believe -that neither Law nor the Regent anticipated recourse to harsh measures -in carrying out their decree. They relied upon the fear which would be -created by its publication serving their purpose, and in order the -better to accomplish it arranged with several well-known prominent men -to allow themselves to become apparent victims. Thus were many of the -courtiers and public officials intimidated into divesting themselves of -their accumulated wealth, and into exchanging it for paper which was so -soon to lose its value. The largest capture which was made was that of -ex-Chancellor Pontchartrain whose cellars disgorged the enormous sum of -57,000 louis d’or or considerably over £10,000,000. The deep dislike -the Regent had for his own decree is also evinced by his conduct -towards the President Lambert de Vernon, who had sought an interview -for the purpose of informing against some one who was possessed of -500,000 livres in gold. On hearing his message, the Regent in horror -enquired, “What d--d sort of a trade have you taken to?” The President -replied, “Sir, I do nothing more than obey the law, and it is that -which you indirectly treat with such an appellation. As for the rest, -your Royal Highness need not be alarmed, and may do me more justice. -It is myself I come to inform against, in the hope of being allowed to -keep at least a part of this sum, which I prefer to all the bills of -the Bank.” As a result of his appeal, the President was allowed the -reward of an informer and permitted to retain half his fortune. - -Law himself was the victim of a somewhat amusing result of his own -methods about this time. Some months before he negotiated with the -President of Novion the purchase of his estates for £400,000 francs. -The President required payment to be made in silver, and Law, who was -anxious to impress everyone with the advantages to be gained by the use -of paper alone, could not of course refuse, declaring that he preferred -to be rid of a metal which was to him a burden on account of its bulk, -and of the embarrassment it caused him. Unfortunately Law was compelled -afterwards to re-transfer the estates to the President’s son to whom -the right of pre-emption had been reserved, and received back the price -in notes which he was bound to accept according to his own decree. Nor -could Law complain of the advantage that had been taken of him without -depreciating the value of his own paper. - -A measure of vastly greater importance and destined to lead to much -graver consequences than even those already mentioned was the union -of the Royal Bank and the Indian Company. A meeting was held on -22nd February at the Bank to which had been called the principal -shareholders of the Company, the proposal being formally made and -agreed to. Since the General Bank had been converted, in December, -1718, into a Royal institution, it had carried on its business for -the benefit of the Royal revenues alone. The notes in circulation -carried the guarantee of the King, a guarantee which was still to -remain notwithstanding the amalgamation. For the ostensible purpose -of preventing unlimited issue of additional notes it was provided -that authority must in all cases be first obtained from the Council. -Since the Council was in all its deliberations under the influence -of the Regent, it will be seen later how worthless such a provision -proved as an effective check to arbitrary fabrication of paper. During -the period of the Bank’s existence as a Royal establishment, it had -carried on business with great success, its balance sheet showing on -paper a profit 120,000,000 livres of profit. This profit it was also -arranged should be transferred intact to the company for the benefit -of its shareholders. The object which Law had in view in bringing -about the union could only have been one of expediency. It contained -no feature which promised permanent success to the undertaking, and -showed a singular lack of foresight and real business capacity. -Undoubtedly it gave encouragement to speculators, who were carried -away by the apparent increase of stability given to the Company by the -amalgamation. But even this was of short duration. It was impossible -to conceal for long the elusory nature of the transaction, and it soon -became clear that a false step had been taken inasmuch as the fortunes -of the Bank were now altogether bound up with those of the Company. - -Previously to the date of the incorporation of the Bank and the -Company, the note issue in circulation amounted to about 600,000,000 -livres. Within three months after that date, an additional -2,000,000,000 livres were fabricated and set afloat. The bulk of the -fresh issues was utilised for the purpose of discharging the national -debt, one of the great objects which Law had in view at the initiation -of his financial schemes. The national creditors were now become -creditors of the Company in respect of the notes they held; and the -state had now nominally discharged her debts in full. - -One of the difficulties created by the publication of the various -decrees limiting the currency of coin was that of scarcity of notes of -small denomination. On 19th April, accordingly, a decree was registered -by which no less than 438,000,000 livres in notes of 10 to 1000 livres -each were issued in order to facilitate the changing of notes of -greater value and the carrying out of transactions of small amounts. - -Although all these expedients failed in their object, the extent to -which speculation was carried was very little affected. The time for -suddenly made fortunes had now gone, but sufficient excitement remained -to render the purchase and sale of shares an occupation attractive to -thousands of speculators. The tendency of the market was distinctly -downwards, but there were intervening fluctuations, which maintained -the mania in almost all its former strength. The Rue Quincampoix was -still crowded from morning till evening. So great were the crowds on -many occasions that scenes of confusion were frequent and sometimes -developed into scenes of violence. It formed a happy hunting ground -for the lowest classes in the community. Robberies and even murders -took place so often that special precautions had necessarily to be -taken by those who carried money on their person. So dangerous had -the street and its environs become that on 22nd March, the council -published an edict prohibiting its use as a stock market, and requiring -all houses and offices wherein share transactions had been hitherto -usually negotiated to be closed in future for such business. No other -locality was assigned to the speculators, and for two months they had -no recognised place of meeting. The wisdom of this decree was dictated -by an unhappy occurrence that took place on the morning of the day of -its issue, in which was involved a young foreigner of noble family, -Comte de Horn, son of Prince Philippe Emmanuel who had served in France -at the sieges of Brizac and of Landau, and at the battles of Spire -and of Ramillies. According to the account given of the incident by -Duclos, it appears that the Count, who had been living a riotous life -in Paris for some time and had contracted extensive debts, along with -two companions, Laurent de Mille, and a sham knight named Lestang, -plotted the assassination of a rich stock-jobber and the theft of his -pocket-book in which he was known to carry large sums of money in -paper. They resorted to the Rue Quincampoix, and under the pretext of -negotiating the purchase of 100,000 crowns worth of shares, took the -stock-jobber to a tavern in the Rue de Venise and stabbed him there. -The unfortunate stock-jobber, in defending himself, made sufficient -noise to attract the attention of a waiter, who, passing at the moment -the door of the room, opened it. Seeing a man lying in a pool of blood, -he immediately closed and locked the door and shouted murder. - -The assassins, finding retreat closed against them, escaped through -the window. Lestang, who had been keeping watch on the staircase, -rushed off on hearing the shouts of the waiter to the lodging house -in the Rue de Tournon, where the three of them boarded, took the most -portable luggage and fled. Mille dashed through the crowds in the Rue -Quincampoix, but followed by the people, was at last arrested at the -markets. The Comte de Horn was seized on jumping from the window. -Believing his two accomplices to have succeeded in saving themselves, -he had enough presence of mind to say that he feared he himself would -also have been murdered in trying to defend the stock-jobber. His ruse, -however, proved valueless by the arrest of Mille, who, having been -brought back to the tavern, confessed all. The Comte declared to no -purpose he did not know Mille; and the Commissary of Police took him -to prison. The crime being fully established, the trial did not last -long, and on 26th March both were broken alive on the wheel in the -Place du Grève. The Comte was apparently the author of the plot; for, -while he was still breathing on the wheel, he demanded pardon for his -accomplice, who was executed last. - -Before the execution had been carried out, the strongest efforts had -been made to influence the Regent to grant a pardon, or at least a -commutation of the punishment. The crime was so atrocious that they -did not insist on the first, but redoubled their solicitations for -the latter. They represented that the execution by the wheel was so -ignominious, that no daughter of the house of Horn could, until the -third generation, enter any convent. The Regent rejected all prayers -for pardon. They appealed to him on the ground that the culprit was -allied to him, but he replied,--“I shall partake of the shame. That -ought to console the other relatives.” He repeated the words of -Corneille: “The shame is in the crime, not in the scaffold.” The Regent -was inclined however to commute the punishment, but Law and the Abbé -Dubois impressed him with the necessity of preserving the public safety -at a time when everyone carried his wealth about with him. They pointed -out to him that the people would not be satisfied, and would consider -themselves humiliated by a distinction of punishment for a crime so -atrocious. - -When his parents lost all hope of pardon from the Regent, the Prince de -Robec Montmorency, and the Marechal d’Isenghen, found means of securing -admission to the prison. They brought poison with them and exhorted -him to take it in order to avoid the shame of the execution, but he -refused. “You wretch,” they declared, leaving him with indignation, -“you are only worthy to die by the hands of the executioner.” - - - - -CHAPTER XI - - New measures prove ineffectual.--New edict issued fixing price - of shares and depreciating value of notes.--Authorship - of edict.--People hostile to edict.--Parliament refuses - to register it, and a revocation is issued.--Law deposed - from office of Controller-General.--D’Aguessau reinstated - in his former office.--New schemes for absorption of - bank-notes.--Widespread distress produced amongst - community.--Law’s person in danger.--Stock-jobbers establish - themselves in the gardens of the Hotel de Soissons.--Parliament - exiled to Pontoise, and Bank closed for an indefinite period. - - -[Illustration] - -The efforts of Law and of the Regent having as yet proved insufficient -to rectify the balance between the notes in issue and the amount of -specie in the country, the adoption of some final drastic measure was -rendered imperative. A step was taken which has given rise to much -controversy as to its authorship. On 21st May an edict of Council was -issued, the provisions of which were designed to adjust the finances -of the realm by one sweeping process, irrespective of the interests -of individuals, and of a character so radical and effective as to -exclude the possibility of the whim of the speculator from defeating -its object. It not only covered the relations which were to obtain -between the value of notes and specie, but also fixed the price of -shares so that they should not disturb by their fluctuations the -arrangements of the Bank. It enacted that on the date of publication of -the decree bank-notes of all denominations should suffer depreciation -to the extent of 20 per cent. of their value, and that on the first -of each month, from 1st July to 1st December, further depreciation -should take place to the extent of 500 livres on notes of the nominal -value of 10,000 livres, and proportionately on the smaller notes. -Shares were to undergo a similar diminution in value, starting from -8000 livres as at 21st May. On 1st December therefore, all notes would -have reached a discount of 50 per cent., and shares would possess -a fixed value of 5000 livres each. These regulations were to apply -to all financial and industrial negotiations; but one exception was -granted in the case of payment of Royal revenues, and purchase of -state securities such as annuities, where until 1st December all notes -would be received at their full face value. As a possible steadying -influence in so disturbing and so confusing a change, the repeal of the -edict prohibiting the currency of specie was to be withdrawn, and the -standard value of the specie was again to be increased to a more normal -ratio, the silver marc to stand at the value of 30 livres. - -In the confusion of authorities it is extremely difficult to apportion -the blame for the publication of the edict. On the one hand, it is -stated that the enemies of Law were the instigators of it, and among -them in particular Dubois and D’Argenson. These two ministers, desiring -nothing more than the downfall of their rival, had suggested two -courses by either of which the great disproportion between the notes -and specie might be immediately accomplished. They pointed out to the -Council that as the notes in issue were double in value the amount of -specie, equality could be obtained by halving the value of the former -or by doubling the value of the latter. Their suggestion possessed the -element of simplicity and appealed very strongly to the other members, -who, after serious discussion, and in spite of the remonstrances of Law -as to its fatal consequences, determined upon dealing with the notes -and leaving the specie at its present standard. - -On the other hand, it has been argued that the edict was really the -work of Law and bears evident marks of his financial handiwork. Before -the date of the decree, shares were at 10,000 livres in price, and -the marc was valued at 85 livres. Consequently a share at that price -represented almost 120 marcs. At the date of the last reduction, -shares of 5000 livres would, with the increased ratio of value, return -approximately 165 marcs to the holder, or a net gain of 45 marcs. The -decree, therefore, which seemed to threaten the financial stability of -the nation, would in reality have resulted not only in removing the -difficulties due to the inflated issue of notes, but in benefiting -materially all the shareholders of the company. - -It is difficult to believe that Law on such a ground as this was the -author of the decree. There is no contemporaneous evidence of its -having been at any time advanced by himself or his friends in order to -make the decree acceptable to the public, and it had the additional -disadvantage of being unlikely to inspire any confidence. The immediate -result of the decree, and not its probable result in the future, would -be the determining factor in the attitude of the public towards it, -and no one would understand this better than Law himself. It is more -likely that Dubois and D’Argenson were accountable altogether for the -decree, hoping thereby to secure his removal from office and to destroy -the influence he had acquired in the government of the country. Law -had made himself obnoxious to both. He had sought to undermine the -authority of Dubois, and had deposed D’Argenson from the office of -Comptroller General. Their personal jealousy of the great foreigner was -therefore sufficiently deep to take advantage of such an opportunity as -they now had to avenge themselves. - -The publication of the edict created universal consternation. The -community were paralysed. The last shred of confidence in Law was -utterly destroyed, and national bankruptcy was feared to be imminent. -The attitude of the people was one of intense hostility, and threatened -to break out at any moment into active riot. Multitudes flocked to the -Bank, and the protection of the troops was required to maintain order. -Nor was the fury of the mob appeased by the knowledge that the Duke of -Bourbon, the Prince of Conti, and Marshall Villeroi, were strenuously -opposed to the edict and demanded its withdrawal. Posters were -exhibited all over the city calling upon the citizens to resist, even -to the extent of using force. Hand-bills were distributed in thousands, -foreboding a step of revolution. “This is to give you notice,” they -ran, “that a St. Bartholomew’s day will be enacted again on Saturday or -Sunday, if affairs do not alter. You are desired not to stir, you nor -your servants. God preserve you from the flames. Give notice to your -neighbours.” - -In the midst of this disorder the First President called Parliament -together to consider the situation, and with prompt decision announced -to the Regent their refusal to register the edict. The Regent, -delighted to have this opportunity of reconciling himself with his -Parliament, especially when the occasion allowed him to follow his -own desires, received the parliamentary deputation with the greatest -deference, and gave them assurance of his sympathy. He, accordingly, -sent La Vrillière, one of the Secretaries of State, later on the same -day to announce to the President his intention to withdraw the edict, -and as far as possible restore the _status quo_ which had been so -ruthlessly disturbed. An edict was then published on 27th May, revoking -that of 22nd May, by which shares and notes were allowed to remain at -their previous value. Unfortunately, however, it was now impossible -to restore public confidence. That was irretrievably lost. A blow -had been struck at the system from which it never recovered. Its -collapse may be dated from the ill-conceived edict of 22nd May, and its -subsequent history is merely a record of measures of despair resorted -to for the purpose of saving if possible some portion of the national -credit. - -Holders of bank-notes now thought to avail themselves of the -possibility of securing some portion at least of their paper changed -into silver, but Law had foreseen the danger of allowing unlimited -demands being made on the Bank, and suspended payment in order as he -declared to enable him to investigate the circumstances of numerous -frauds of which the Bank’s officials had been guilty. This proceeding, -while demanded by the exigencies of the moment, merely added fuel to -the fire, and the frenzied multitude only awaited the word of command -from a leader to break out into open revolt. The notes in circulation -were practically valueless for purpose of currency, and the greatest -distress accordingly prevailed. The situation could not continue for -many days in its present condition, and Law, in order to relieve the -distress which was now universal, caused several thousand livres in -specie to be sent to each of the commissaries in the city for exchange, -but only to be given to those who satisfied the distributing authority -that they required the specie for immediate wants. Thus again for a few -days at least the inevitable liquidation was postponed. - -The Regent was naturally much alarmed at the situation which had been -created. He felt that his own position was largely bound up with -that of Law, and that the hostile attitude of the community might -also be directed against himself. He was urged by Dubois and other -influential advisers to sacrifice Law, and thus secure the good favour -of the community. The Regent, however, was unwilling to sever in a -summary manner his intimacy with Law, but Law himself communicated -his readiness to be discharged from office if the Regent thought it -prudent in the interests of himself and of the nation. On 29th May, -accordingly, the Regent through Le Blanc announced to Law that he -no longer held the position of Comptroller General of Finances, but -that his services would still be retained as director of the Company -and as a member of the Council. At the same time he informed Law -that he intended to provide for his personal safety by giving him -the protection of a detachment of Swiss Guards under the command of -Benzualde. This precautionary measure was by no means superfluous. -Law had been threatened by the mob and would have been stoned on one -occasion while driving in his carriage had he not at the moment been -near his own house and thus escaped. His family had also been subjected -to similar treatment. The provision of a guard was therefore an act of -kindly consideration for the deposed minister. On the day following his -discharge, Law was taken to the Palais Royal by the Duke de la Force, -but the Regent, in order to maintain the appearance of having disgraced -him, refused to see him. The same evening, however, Law was sent for, -and admitted by a secret door, and thus had the desired interview. Two -days after these somewhat peculiar proceedings, Law and the Regent -appeared together in public at the opera, the necessity for continuing -the pretence of disgrace having evidently been regarded as needless. - -Law, who acted at this critical period with great good sense, -determined upon advising the Regent to reinstate D’Aguessau in the -office of Chancellor from which he had been instrumental in removing -him. With the assistance of Dubois, to whom Law had communicated -his proposal and who strongly approved of its wisdom, as a prudent -concession to public opinion, the appeal to the Regent was successful. -Since his deposition, the ex-chancellor had lived in retirement on his -estate at Frênes. Thence Law himself, and the Chevalier de Conflans, -an officer of the Regent’s household, were despatched in order to -convey the command of the King to resume his office. D’Aguessau at -first refused to accept the honour, but after considerable pressure and -on representations that the interests of the government lay with his -acceptance, he agreed to receive the seals. D’Argenson was at the same -time deprived of office, but retained all the honours and the position -it had conferred upon him. Law’s own successor was Pelletier des Forts, -and associated with him as colleagues were D’Ormesson and Gaumont. -These three formed a commission of finance, and to them was entrusted -the responsibility of adjusting the finances of the kingdom. - -As with Law, the supreme object of the new commission of finance was -the reduction of the volume of bank-notes in circulation and the -establishment of the shares upon a more stable foundation in order to -prevent the extravagant fluctuations to which they had hitherto been -subjected. In their deliberations they were joined by five deputies -of Parliament,--a suggestion of the Regent who wished to impress the -public with the idea that all the measures which might be taken to -deal with the crisis had the approval of that body. The result of -their deliberations was the creation of twenty-five million livres -of annuities secured upon the revenues of Paris. These annuities, -which bore interest at the rate of 2½ per cent., were purchasable in -notes, which were received at their nominal value, and the notes thus -utilised were to be burnt publicly at the Town Hall. At the same time -it was determined to effect a wholesale reduction of the capital of the -Company. The King was proprietor to the extent of 100,000 shares, and -the Company itself held 300,000 shares which had been bought in during -February and March at the rate of 9000 livres per share. These were -now to be cancelled, and 200,000 new shares were to be issued in place -of the 200,000 shares to which the capital was now reduced. The new -shares were to be given to holders of the latter, share for share, with -a liability of 3000 livres payable in notes or at the rate of two new -shares for three old shares, and were to carry a fixed dividend of 360 -livres per share. To induce the commercial community to make use of the -facilities which the Bank were willing to afford, it was also arranged -to open credit accounts for their benefit upon which they could operate -to the extent of any deposits they might make in notes. It was hoped -that these accounts would absorb at least 600,000,000 livres in notes, -but so little advantage was taken of them that only about 250,000,000 -livres were deposited. - -These schemes, however, were only directed to absorption of paper. -They were valueless as means of relieving the distress of those who -were in immediate need of money to satisfy the pressing wants of the -moment. The price of food not only rapidly rose, but shop-keepers -would only accept notes in payment at very high rates of discount, -and in many cases refused to sell unless payment was made in specie. -The distribution of silver by the commissaries had been of a very -limited character, and merely served for the day upon which it was -made. The probability of disturbances arising was strongly impressed -upon the commission of finances unless provision was immediately made -for extensive conversion of notes. It was accordingly arranged that -the Bank should again be opened on 10th June for exchanging notes of -10 livres, and that on 11th June notes of 100 livres should also be -exchanged for those of 10 livres. No more than one note of 10 livres -was convertible into specie for each person, nor of 100 livres into -small notes. These arrangements, designed with the best intentions, -led unfortunately to a very alarming situation. The Bank was besieged -by thousands of people during the few hours its doors were open, and -a guard was stationed within the building to regulate the flow of the -eager and excited multitude. Many were injured and crushed to death -in the vast and unwieldy crowds, and the exasperating slowness of the -process of exchange, by which only an insignificant portion of the -crowd was satisfied each day, culminated not infrequently in attacks -upon the soldiery who were thus under the necessity of charging them in -order to prevent the possibility of the Bank being wrecked. - -To relieve the Bank, recourse was had again to the employment of the -district commissaries, whose offices were open on Wednesdays and -Saturdays, but the same scenes were enacted there as at the bank -itself. “The doors,” says Buvat, “were only half open, so that the -money seekers should only enter one by one, and none got in but the -strongest. Most of them brought away nothing but sweat and fatigue -instead of money, because the preferences that the commissaries gave to -their friends had exhausted the funds, and they reserved a portion for -themselves.” This system of decentralising the distribution of specie -was, however, of short duration, the Regent and his advisers fearing -that the creation of numerous centres of disturbance might at any -moment lead to widespread revolt. - -Although the distribution of coin continued for several weeks, the -needs of the community were still far from satisfied, and the crowds, -instead of diminishing, grew larger each day. On the morning of 17th -July, the crowd, who had commenced to gather at three o’clock, found -their approach to the Bank protected by barricades so as to render the -task of the guard less difficult in arranging the people in file. This -measure of safety, however, only incited the people to violence, and -determined them to destroy it. In the rush, by which it was hoped to -carry away the barricades, a large number were seriously injured, and -twelve were killed. Three of the bodies were forthwith carried to the -Palais Royal, followed by a concourse of three or four thousand people -thirsting for vengeance, and demanding the lives of Law and the Regent, -both of whom were conceived to be the cause of the prevailing distress. -The scene was impressive, and Paris seemed ready to rise in arms, but -Le Blanc was equal to the situation and acted with promptness and tact. -He ordered the guard at the Tuilleries to proceed at once to the Palais -Royal. He himself reached the palace after the utmost difficulty, and -with the greatest coolness informed the people who he was and that he -had come to plead their case before the Regent. Addressing himself to -those who had carried the bodies, he said, “My children, take these -bodies, carry them to a church, and return to me immediately for -payment.” Surprised by the calmness of the Minister, they obeyed in -spite of themselves, and a considerable portion of the crowd followed -them, partly from curiosity and partly in hope of also participating in -the reward. During their absence the guard arrived and dispersed the -crowd without difficulty, the force of their demonstration having been -destroyed by the removal of the bodies. - -At ten o’clock on the same day Law drove to the Palais Royal to speak -with the Regent. On the way he was recognised by the widow of one -of those who had lost their lives earlier in the morning. At once -the people surrounded his carriage and threatened to kill him. By -preserving his usual coolness, however, he succeeded in reaching his -destination without injury. The Regent, after the interview, would not -allow Law to return home, and his carriage on making its appearance -on the streets was again attacked and broken to pieces, the coachman -barely escaping with his life. The news immediately spread through the -city, and the First President who had left the chamber where Parliament -was deliberating, hearing it rushed back to inform the members of what -had happened. They rose to their feet and in excitement asked if Law -too had been torn to pieces, but on the President replying that he was -ignorant of all that had occurred, they adjourned the sitting in order -that they might carry the news to their friends. - -Since the Rue Quincampoix had been closed to the stock-jobbers no place -had been allotted to them for carrying on their business. Transactions, -however, were not less numerous now than they were before, and the -events of the past few months did not destroy speculation in the shares -of the company. The extreme inconvenience of having no recognised place -for meeting induced the Regent to consider the appeals made to him, -and accordingly on 2nd June they were allowed to establish themselves -in the Place Vendôme. In the beautiful open square, of which the -Place Vendôme consisted, assembled daily the fashionable Parisians of -the day. Tents were erected for the accommodation of stock-jobbers, -and the host of gamesters, saloon-keepers and others who catered for -the pleasures of the crowd. The noise however of the great multitude -of people proved a source of much annoyance to the Chancellor whose -court was held in the vicinity, and on his complaint being made to the -Regent it was necessary to arrange for the removal again of the place -of exchange. Thereupon the Prince de Carignan sold to Law his Hotel de -Soissons at the price of 1,400,000 livres, reserving the gardens which -extended to several acres. In these the Prince erected a large number -of tents for the jobbers which he let at 500 livres per month, the -revenue from all producing about 500,000 livres per annum. In order -to secure that the tents should be utilised, the Prince succeeded in -obtaining an edict prohibiting the conclusion of any transaction except -in one of them, and this was done under pretext of providing against -the loss and theft of pocket-books containing money. For three months -the stock-exchange of Paris was held in the gardens of the Hotel de -Soissons, and on 29th October, stock-jobbing was entirely prohibited, -a penalty of 3000 livres being imposed upon any one found dealing in -shares or notes. - -A few days before the outbreak at the Palais Royal, the Regent on the -advice of Law had drawn up an edict, conferring in perpetuity upon the -Company the whole commercial rights and privileges of the kingdom on -condition that it liquidated within a year 600,000,000 livres of bank -notes by monthly instalments of 50,000,000 livres each. The operation -of this edict would have had the effect of re-establishing the Company -as a sound commercial undertaking and of removing from circulation the -unsecured paper issue afloat, but this would only have been possible -at the cost of ruining the whole community of private traders or at -least of placing them at the mercy of the Company which might exercise -their proposed privileges in an arbitrary and despotic manner. On the -16th of July the draft-edict was submitted for approval to the Council -of the Regency, and this body agreed to send it for registration to -the Parliament. The following day accordingly it was deliberated upon -by that assembly, who refused to give it effect, 148 members going so -far as to support a proposal that it should be returned to the Regent -without acknowledgment or reply. - -[Illustration: CARDINAL DUBOIS.] - -This unexpected check to the plans of the Regent and of Law produced -the greatest consternation at court. They feared that the people would -by the refusal infer the sympathy of Parliament with their position -and might be encouraged to break out into revolt, although the refusal -had not proceeded from motives so high and disinterested, but from -feelings of opposition to Law and to every proposal he might suggest -that would tend to rehabilitate confidence in the Company. The Regent, -with Law, Dubois, and Le Blanc, then resolved in secret council upon -the banishment of Parliament to Blois. The musketeers with four -thousand soldiers were immediately put in readiness to accompany the -refractory assembly on its journey on the following day. The musketeers -were to surround the resident of the First President, and the soldiers -were to take possession of the Grand Chamber early in the morning, -and orders were to be conveyed to all the members that they were to -betake themselves to their place of exile within 48 hours. At the last -minute, however, D’Aguessau prevailed upon the Regent to send the -members to Pontoise, a place within easy reach of Paris, instead of to -Blois where it was hoped they would have sooner submitted to his wishes -by reason of the many discomforts and inconveniences they would -undergo owing to its greater distance from the capital. The members, -accordingly, proceeded on 21st July to Pontoise in a body without -demur, determined to maintain their authority and equally determined -to enjoy the term of their exile. The change of place of exile and all -the circumstances connected with it converted what was intended as a -punishment into proceedings of a highly ridiculous character. In order -to assist those who might require money for their journey, the Regent -sent to the Attorney General 100,000 livres in silver and a similar -amount in notes. The First President was allowed a considerable sum in -addition for his own expenses and drew from the Regent no less than -500,000 livres in all. “He kept open table for the Parliament; all -were every day at liberty to use it if they liked, so that there were -always several tables all equally, delicately, and splendidly served. -He sent, too, to those who asked for them, liquors, &c., as they could -desire. Cooling drinks and fruits of all kinds were abundantly served -every afternoon, and there were a number of little one and two horse -vehicles always ready for the ladies and old men who liked a drive, -besides play-tables in the apartments until supper time. A large number -of the members of the Parliament did not go to Pontoise at all, but -took advantage of the occasion to recreate themselves in the country. -Only a few of the younger members mounted guard in the assembly, where -nothing but the most trivial and make-believe business was conducted. -Everything important was deliberately neglected. The Parliament, in -a word, did nothing but divert itself, leave all business untouched, -and laugh at the Regent and the government.” The Parliament adhered to -their resolution to refuse to register the edict, and remained in exile -till 17th December. - -Thus the final grand expedient of Law to restore the Company’s fortunes -was destroyed. - -On the 17th of July an edict was published which prohibited the people -from assembling in crowds, under pain of heavy penalties, and it was -also declared to be necessary in the interests of public peace and -safety to close the Bank for an indefinite period, and that no further -notes could be received there for conversion into coin. - - - - -CHAPTER XII - - Starvation produced amongst poorer classes by issue of new - edict.--Law’s expulsion from France demanded.--Law resigns - all his offices and leaves for Venice.--Privileges of Company - withdrawn.--Commission appointed to value unliquidated - securities.--Law in vain applies for recovery of a portion - of his wealth.--His death at Venice.--Attitude of French - people towards Law.--Circumstances to be considered in passing - judgment. - - -[Illustration] - -The creation of 25 millions of perpetual annuities at 2½ per cent. -and 4 millions of life annuities at 4 per cent. in June as a means of -absorbing notes to that extent was not attended with the success which -had been anticipated. While the interest was small, it yet offered -greater security than the notes themselves afforded, and on that -ground alone ought to have appealed to holders of large amounts who -were debarred by edicts from employing their paper in other directions -for investment. Only a few possessed sufficient confidence to take -advantage of the annuities, and the issue was accordingly of very -insignificant amount. Law, however, was determined to secure the issue -of the whole amount, and if necessary to do so by artificial means. -His determination was made the stronger by the refusal of Parliament -to agree to his last proposal. Accordingly, on 15th August, an edict -was published which declared that all notes of 1000 livres in value and -upwards should have no currency and would be regarded as cancelled, -except those which were utilised either for purchase of annuities, or -for opening credit accounts at the Bank, or for the payment of the -uncalled liability on the new shares issued by the Company. This was -followed by a second edict on 10th October, containing provisions of a -similar nature with reference to all other notes, and requiring their -utilisation before 1st November. - -These drastic regulations had the effect of withdrawing from -circulation a large quantity of paper, but still there were many -holders who refused to part with their notes although rapidly becoming -valueless. Some refused in the belief that their wealth might probably -in the future become more liquid at its nominal value; others because -their paper was required for ordinary daily purposes and could not -therefore be spared for permanent investment. As a result, the country -found itself at 1st November in possession of notes of enormous -aggregate value which had automatically become absolutely worthless. -Since the issue of the edicts, the trading community refused to -accept payment in notes of goods supplied except at ruinous rates of -discount, amounting in instances to 80 and 90 per cent. Provisions -and all classes of necessaries reached extravagant prices, and being -unattainable by the poorer people, starvation reigned in the homes of -thousands not only in Paris itself but also in the provinces. Decrees -were issued fixing the maximum prices of food, but these were openly -disregarded by every merchant, who could not have sold at the prices -named without incurring loss to themselves. The difficulty in securing -food and other necessaries had also been increased by the operations -of wealthy speculators, who during the previous months of the year had -purchased all available supplies with the paper in their possession and -stored them in secret places or transported them from the country for -realisation and for investment of the proceeds in foreign securities. -Complaints, accordingly, continually reached the Government from -those who were unable to satisfy the demands of the traders, and the -Government was compelled to visit the culprits with the penalties they -had power to impose, which included not only physical punishment but -confiscation of all their goods, and frequently the payment of a heavy -fine. The bakers of Paris suffered most from the tyrannical edicts, -and on one occasion no fewer than eighteen were fined, placed in the -stocks, and had their goods confiscated. - -The final edict, published during the period of Law’s management of -the Bank and of the Company, appeared on 24th October, which directed -that all the original shareholders of the Company who still retained -their shares should deposit these with the Company, and that those -who had sold the whole or part of their shares should now purchase -the necessary number from the Company to make up the total of their -original holdings at the price of 13,500 livres per share. To provide -for the new purchases which this edict required an additional 50,000 -shares were created, so that on the assumption that this number -represented the minimum necessary to make up the deficiencies of -holdings the Company would have absorbed over 600,000,000 livres -of depreciated paper. But the edict contained the elements of its -own destruction. It was impossible of accomplishment. The victims -refused to purchase from the Company shares for 13,500 livres which -were obtainable in the market for a mere tithe of that sum, and many -of them immediately prepared to leave the country with all their -belongings. So general were these preparations that no person was -allowed to cross the frontier without the permission of the Regent on -pain of death. The closest watch was kept upon all the main highways, -and numerous arrests were made of suspected emigrants. Many millions -of livres and considerable quantities of plate and jewellery, which -their possessors attempted to smuggle across the frontiers, were -seized and appropriated, the culprits being sent back to Paris to -undergo punishment. In no case however was the extreme penalty imposed, -confiscation and ruin being mercifully judged sufficient punishment. - -Law’s position was now becoming highly critical. On the one hand the -people were clamouring for his expulsion from the country, and even for -his life. On the other hand, the Parliament, still at Pontoise, had not -forgotten the author of their exile. His ingenuity had been used to -the utmost to escape from the daily accumulating complications which -surrounded him. All his efforts had failed in their purpose, and now he -was resourceless. He stood alone a foreigner in a hostile country. His -erstwhile friends had now deserted him, the tie of friendship broken -by his inability to further increase their fortunes. One man, and one -alone, the Regent himself, remained faithful to the last, and yet not -openly. The safety of the crown forbade the Regent from employing his -influence and power in order to retain the financier in his service, -and prohibited him from ignoring indefinitely the demands of the people. - -Law, accordingly, perceiving the extreme folly and danger of further -continuing to direct the affairs of the Bank and of the Company, -resolved after consultation with the Regent to resign the offices he -still retained. He was anxious to leave the country at the same time, -but the Regent considered such a step impolitic and refused to grant -permission. He was allowed, however, to leave Paris, and retire to his -estate at Guermande, which he did on 13th December. At the interview he -had with the Regent before his departure, he advised the appointment -of Pelletier de la Houssaye as Controller General of Finances, and -in referring to the failure of his schemes is said to have remarked, -“I confess 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 that kind will be found in the whole course of my -conduct.” Two days after his departure, Law received from the Regent a -letter according permission to depart from the kingdom, and informing -him that the Duke of Bourbon had been ordered to send him the necessary -passports and such money as he might require for his journey. Two -messengers arrived at Guermande on the following day, bringing the -passports and a large sum of money, but Law respectfully refused to -accept the latter. The postchaise of Madame de Prié, with an escort of -six horse guards was also sent for his conveyance, and in it he set -out with his son for Brussels on 16th December. On his way Law was -unfortunately recognised by the Governor of Valenciennes and arrested -as an ordinary fugitive from the kingdom. This was due to Law having -offered passports drawn in another name, his identity being known to -the Governor. He thereupon produced a second passport in his own name, -but this only served to increase the perplexity of the Governor, who -replied that the authorities frequently granted to men such as he, -passports of convenience, because they had not the courage to refuse -and that therefore he was still bound to prevent his departure. Law -then produced a letter from the Regent to the Duke of Bourbon, in -which the passports had been forwarded, and having thus satisfied the -Governor of their genuineness he was allowed to proceed. On arrival at -Brussels, on 22nd December, he was welcomed by the Marquis de Prié, -Governor of the Imperial Low Countries, and enjoyed his hospitality -while he rested before resuming his journey to Venice. Of all his vast -wealth he took with him into exile the small sum of 36,000 livres, -and two diamond rings of great value, one of which he sent to Madame -de Prié on returning her carriage to her from Brussels. Law’s wife -and daughter remained in Paris for a short time after his departure, -but joined him later in Venice after having realised sufficient to -discharge all household debts due by them. - -The rumour of Law’s flight soon spread throughout Paris, and the Duke -of Bourbon was saddled by the community with the responsibility of -allowing his escape. The Regent, who had instructed permission to -be given, had by acting through the Duke relieved himself, so far -as the public were concerned, of any blame in the matter. He had -displayed considerable astuteness in thus shifting the responsibility, -but he had not been altogether disinterested in the safety of the -fugitive, and had not acted from motives of friendship alone. The -meeting of the Regency Council held, on 26th January, to consider the -financial situation, disclosed a set of circumstances of a highly -incriminating character against the Regent, and revealed the extreme -advisability on his part of securing the departure of Law before the -return of Parliament to Paris, lest that assembly should cause him to -be arrested. The new Controller General had since his appointment on -12th December been occupied in the attempt to unravel the complicated -finances of the kingdom, and had prepared a report for submission to -the Council. This was in fact the first occasion upon which the members -had been fully acquainted with the actual position, their complete -subservience to the Regent having hitherto caused them to acquiesce in -all the proposals presented to them for approval. - -La Houssaye reported that since the 22nd of May 600,000,000 livres -of bank notes had been issued by Law for which there had been no -authorisation by the Council, or by the proprietors of the Bank. The -question was discussed as to whether the State or the Bank were in -the circumstances debtors to the holders, since the liability should -be determined according as they agreed that Law had issued them as -Controller General or as manager of the Bank. The Duke of Bourbon took -the side of the Bank and was supported in his contention by the Prince -of Conti. La Houssaye, however, was firm in his opinion that the excess -of notes should be met by the Bank, although it appeared that decrees -had been issued by the Regent of which the Council were ignorant. The -Regent, pressed by the Duke to give an explanation of his proceedings, -stated that Law had created the notes on his own authority alone and -that in order to save him from the possible consequences of his action, -he had validated the notes by antedated decrees. “Then,” replied the -Duke, “Law in reality created these notes by your orders; otherwise -you would not have allowed him to leave the kingdom and escape the -consequences of a capital crime.” The Regent retorted, “It was you who -handed him the passports.” “It is true,” said the Duke, “but it was you -who sent them to me. I never asked for them; you wished that he should -leave the kingdom; and I can very easily explain the circumstances to -the King and to the Council. I never advised that Law should depart, -but I was opposed to his being handed over to the Parliament, because -I believed that it was not to your interest to sanction this after -having made use of him as you had; but I never asked you to let him -leave the realm, and I beg you in presence of the King and before all -these gentlemen to say if I ever did.” “At least,” said the Regent, “I -did not order you to lend him your carriage, nor a guard to escort him; -you interested yourself more in him than it was my intention. I allowed -him to leave because his presence might have injured public credit and -prejudice our recovery from the misfortunes into which we have fallen.” - -It was clear to all those who were present that both the Duke and -the Regent were equally afraid to have left Law to the mercy of the -Parliament, as he might have proved them authors and accomplices of all -that he had done. In their own interests, they had both played their -parts badly at the Council table, but all recognised that the Duke only -played a very minor part in the affair, and that the Regent throughout -had been the real culprit, having compelled Law to issue the notes in -order that he might satisfy his own extravagant pleasures. - -Notwithstanding the efforts of the Duke of Bourbon and of the Prince -of Conti to make the government responsible for the excess of notes, -and thus relieve the shareholders by increasing the free assets upon -which they could claim in liquidation, La Houssaye gained his point, -and reported that the public debt including the shares of the Company -amounted to over thirty-one hundred million livres and bore interest -to the extent of almost a hundred million livres per annum. So great -a charge upon the revenues of the State could not be faced by the -Government, but he recognised it was necessary to minimise as far as -possible the loss which would require to be borne by the shareholders -and possessors of bank notes, who, it was estimated numbered no less -than 100,000 families. He accordingly proposed to withdraw all the -privileges of the Company as far as these related to the management of -the national revenues, and reduce it to the position of a mere trading -concern. He would submit to the closest scrutiny the history of every -individual holding either shares or notes and those which were tainted -with speculation would be subject to cancellation. A commission would -be appointed under whose supervision the work of investigation would -be carried on, and all those who failed to submit their securities for -adjudication before 1st August would be deprived entirely of any right -to have a value placed upon their securities. - -A decree to this effect was issued on 4th February, and immediately -thereafter the Commission set to work. The task of investigation which -covered transactions over half a million in number, and of a value -of over 3000,000,000 livres, was entrusted to the brothers Paris, -who employed for the purpose a staff of 800 clerks. To simplify the -gigantic task, securities were cast into five categories according -as they were (1) Reimbursements made by the King, (2) Reimbursements -between private individuals, (3) Sales of real property, (4) Sales of -personal property, (5) Purely speculative transactions. All securities -embraced in the fifth class were cancelled without consideration. The -first were untouched because of their origin. The other three classes -were subjected to reduction, ranging from five to ninety-five per -cent. By the end of 1721, the Commission were in a position to deliver -their decision upon the first batch of securities, and by the end of -the following year to finally bring their work to a conclusion. As a -result of the investigation, 1000 million livres of securities were -altogether cancelled, leaving a public debt of 2000 million livres -bearing annual interest amounting to 48 million livres. The capital of -the Company which had before the commission amounted to 200,000 shares -was reduced to 56,000 shares of the value of 500 livres each, bearing a -fixed dividend of 100 livres for the first year, and 150 livres during -subsequent years, guaranteed by the Government and subject to increase, -should the profits of the Company warrant it. - -In the fifth category of securities the brothers Paris caused the -whole of the properties belonging to Law and to his brother William -to be classed, an act of revenge for the failure of the Anti-Scheme -with which they had identified themselves three years before. Law made -several efforts to recover at least a portion of his wealth, but they -were of no avail, and the subsequent years of his life were years -of misery and often times direst poverty. After wandering about the -Continent for several months, he returned to England in October, 1721, -and resided in London until 1725, in which year he returned to Venice, -whither he had proceeded on his departure from France. Here he remained -until his death on 21st March, 1729, leading the precarious life of a -gambler and general speculator and leaving at his death the valuable -ring which alone had escaped the arbitrary and cruel proceedings of his -enemies in France. - -For several generations after the downfall of the System, Law was -held in deep and bitter hatred by the people of France. The name of -the author of the System was associated, not unnaturally, with the -financial ruin which it brought to so many individuals, and it was -convenient that those who were really responsible for its disastrous -end should foster that attitude of hostility to the man who was now -unable to appeal to the better reason of the people. It is perfectly -clear that at no time did Law seek to advance alone his own material -interests by the schemes he put into operation. No circumstance reveals -this more clearly than the fact that at the date of his flight all his -possessions were in France and that no attempt was made by him during -the latter half of 1720 to transfer any part of his wealth to foreign -countries for safety, although events were at that period rapidly -leading to a financial collapse and determining many to pursue such a -course as a measure of prudent provision for the future. Law himself -puts this very forcibly in a letter written on 15th October, 1724, -to the Duke of Bourbon, in which he seeks that nobleman’s interest -on his behalf in his efforts to secure the restitution of at least a -portion of the wealth he left behind him. The Company owes its birth -to me. “For them I have sacrificed everything, even my property and my -credit, being now bankrupt, not only in France, but also in all other -countries. For them I have sacrificed the interest of my children, -whom I tenderly love, and who are deserving of all my affection; these -children, courted by the most considerable families in France, are -now destitute of fortune and of establishments. I had it in my power -to have settled my daughter in marriage in the first houses of Italy, -Germany, and England; but I refused all offers of that nature, thinking -it inconsistent with my duty to, and my affection for, the state in -whose service I had the honour to be engaged. I do not assume to myself -any merit from this conduct, and I never so much as spoke upon the -subject to the Regent. But I cannot help observing that this mode of -behaviour is diametrically opposite to the idea my enemies wish to -impute to me; and surely all Europe ought to have a good opinion of my -disinterestedness, and of the condition to which I am reduced, since I -no longer receive any proposals of marriage for my children. - -“My Lord, I conducted myself with a still greater degree of delicacy, -for I took care not to have my son or my daughter married even in -France, although I had the most splendid and advantageous offers of -that kind. I did not choose that any part of my protection should be -owing to alliances, but that it should depend solely upon the intrinsic -merits of my project.” - -In passing judgment upon Law, it is necessary to remember that the -principles upon which he proceeded while he had himself absolute -control of the management of his System were economically sound. -Elements of unsoundness only appeared from the time when the management -passed under the supervision of the Regent. He it was who insisted -upon the adoption of measures which to Law appeared fraught with -the gravest consequences and which he was unable to resist. Had Law -been able to work out his own designs, unhampered by the dictation -of the Regent, it is conceivable that he might in time have realised -his ambition of placing the finances of his adopted country upon a -just and stable foundation. Even as it was he succeeded to an extent -surprising in the circumstances. Financial corruption was no longer -possible to the great extent to which it proceeded in the days of Louis -XIV. Numerous offices in the patronage of the Government to which -large emoluments and no duties were attached, and many privileges and -monopolies which had hitherto checked the progress of industry, were -abolished never to be revived. Agriculture improved, new industries -arose, valuable public works were undertaken, and in general, a -healthier industrial atmosphere was created throughout the country. -That France did not take full advantage of the great principles of -sound industrial progress which were formulated for them and advocated -by Law was neither the fault of him nor of his System. It was the fault -of the people themselves, who were yet to find that resort to violence -was to prove the only means of removing the great obstacles which stood -in the way of their advancement as a nation. - - -THE END - - -W. JOLLY & SONS, PRINTERS, ABERDEEN - - - - -Transcriber’s Notes - - -Larger versions of most illustrations may be seen by right-clicking -them and selecting an option to view them separately, or by -double-tapping and/or stretching them. - -Punctuation, hyphenation, and spelling were made consistent when a -predominant preference was found in the original book; otherwise they -were not changed. - -Simple typographical errors were corrected; unbalanced quotation -marks were remedied when the change was obvious, and otherwise left -unbalanced. - -Illustrations in this eBook have been positioned between paragraphs -and outside quotations. In versions of this eBook that support -hyperlinks, the page references in the List of Illustrations lead to -the corresponding illustrations. - -The illustrations at the beginnings of the chapters are decorative. -They are not illustrated letters, but simple line drawings within -“L”-shaped borders. - -The text uses “Orléans” and “Orleans” with about equal frequency, so -both have been retained here. Other frequent omissions of accent marks -have been corrected only when there was a predominant pattern to their -usage. - - - - - -End of Project Gutenberg's John Law of Lauriston, by A. W. Wiston-Glynn - -*** END OF THIS PROJECT GUTENBERG EBOOK JOHN LAW OF LAURISTON *** - -***** This file should be named 63453-0.txt or 63453-0.zip ***** -This and all associated files of various formats will be found in: - http://www.gutenberg.org/6/3/4/5/63453/ - -Produced by deaurider, Charlie Howard, and the Online -Distributed Proofreading Team at https://www.pgdp.net (This -file was produced from images generously made available -by The Internet Archive) - -Updated editions will replace the previous one--the old editions will -be renamed. - -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the United -States without permission and without paying copyright -royalties. Special rules, set forth in the General Terms of Use part -of this license, apply to copying and distributing Project -Gutenberg-tm electronic works to protect the PROJECT GUTENBERG-tm -concept and trademark. Project Gutenberg is a registered trademark, -and may not be used if you charge for the eBooks, unless you receive -specific permission. If you do not charge anything for copies of this -eBook, complying with the rules is very easy. You may use this eBook -for nearly any purpose such as creation of derivative works, reports, -performances and research. They may be modified and printed and given -away--you may do practically ANYTHING in the United States with eBooks -not protected by U.S. copyright law. Redistribution is subject to the -trademark license, especially commercial redistribution. - -START: FULL LICENSE - -THE FULL PROJECT GUTENBERG LICENSE -PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK - -To protect the Project Gutenberg-tm mission of promoting the free -distribution of electronic works, by using or distributing this work -(or any other work associated in any way with the phrase "Project -Gutenberg"), you agree to comply with all the terms of the Full -Project Gutenberg-tm License available with this file or online at -www.gutenberg.org/license. - -Section 1. General Terms of Use and Redistributing Project -Gutenberg-tm electronic works - -1.A. By reading or using any part of this Project Gutenberg-tm -electronic work, you indicate that you have read, understand, agree to -and accept all the terms of this license and intellectual property -(trademark/copyright) agreement. If you do not agree to abide by all -the terms of this agreement, you must cease using and return or -destroy all copies of Project Gutenberg-tm electronic works in your -possession. If you paid a fee for obtaining a copy of or access to a -Project Gutenberg-tm electronic work and you do not agree to be bound -by the terms of this agreement, you may obtain a refund from the -person or entity to whom you paid the fee as set forth in paragraph -1.E.8. - -1.B. "Project Gutenberg" is a registered trademark. It may only be -used on or associated in any way with an electronic work by people who -agree to be bound by the terms of this agreement. There are a few -things that you can do with most Project Gutenberg-tm electronic works -even without complying with the full terms of this agreement. See -paragraph 1.C below. There are a lot of things you can do with Project -Gutenberg-tm electronic works if you follow the terms of this -agreement and help preserve free future access to Project Gutenberg-tm -electronic works. See paragraph 1.E below. - -1.C. The Project Gutenberg Literary Archive Foundation ("the -Foundation" or PGLAF), owns a compilation copyright in the collection -of Project Gutenberg-tm electronic works. Nearly all the individual -works in the collection are in the public domain in the United -States. If an individual work is unprotected by copyright law in the -United States and you are located in the United States, we do not -claim a right to prevent you from copying, distributing, performing, -displaying or creating derivative works based on the work as long as -all references to Project Gutenberg are removed. Of course, we hope -that you will support the Project Gutenberg-tm mission of promoting -free access to electronic works by freely sharing Project Gutenberg-tm -works in compliance with the terms of this agreement for keeping the -Project Gutenberg-tm name associated with the work. You can easily -comply with the terms of this agreement by keeping this work in the -same format with its attached full Project Gutenberg-tm License when -you share it without charge with others. - -1.D. The copyright laws of the place where you are located also govern -what you can do with this work. Copyright laws in most countries are -in a constant state of change. If you are outside the United States, -check the laws of your country in addition to the terms of this -agreement before downloading, copying, displaying, performing, -distributing or creating derivative works based on this work or any -other Project Gutenberg-tm work. The Foundation makes no -representations concerning the copyright status of any work in any -country outside the United States. - -1.E. Unless you have removed all references to Project Gutenberg: - -1.E.1. The following sentence, with active links to, or other -immediate access to, the full Project Gutenberg-tm License must appear -prominently whenever any copy of a Project Gutenberg-tm work (any work -on which the phrase "Project Gutenberg" appears, or with which the -phrase "Project Gutenberg" is associated) is accessed, displayed, -performed, viewed, copied or distributed: - - This eBook is for the use of anyone anywhere in the United States and - most other parts of the world at no cost and with almost no - restrictions whatsoever. You may copy it, give it away or re-use it - under the terms of the Project Gutenberg License included with this - eBook or online at www.gutenberg.org. If you are not located in the - United States, you'll have to check the laws of the country where you - are located before using this ebook. - -1.E.2. If an individual Project Gutenberg-tm electronic work is -derived from texts not protected by U.S. copyright law (does not -contain a notice indicating that it is posted with permission of the -copyright holder), the work can be copied and distributed to anyone in -the United States without paying any fees or charges. If you are -redistributing or providing access to a work with the phrase "Project -Gutenberg" associated with or appearing on the work, you must comply -either with the requirements of paragraphs 1.E.1 through 1.E.7 or -obtain permission for the use of the work and the Project Gutenberg-tm -trademark as set forth in paragraphs 1.E.8 or 1.E.9. - -1.E.3. If an individual Project Gutenberg-tm electronic work is posted -with the permission of the copyright holder, your use and distribution -must comply with both paragraphs 1.E.1 through 1.E.7 and any -additional terms imposed by the copyright holder. Additional terms -will be linked to the Project Gutenberg-tm License for all works -posted with the permission of the copyright holder found at the -beginning of this work. - -1.E.4. Do not unlink or detach or remove the full Project Gutenberg-tm -License terms from this work, or any files containing a part of this -work or any other work associated with Project Gutenberg-tm. - -1.E.5. Do not copy, display, perform, distribute or redistribute this -electronic work, or any part of this electronic work, without -prominently displaying the sentence set forth in paragraph 1.E.1 with -active links or immediate access to the full terms of the Project -Gutenberg-tm License. - -1.E.6. You may convert to and distribute this work in any binary, -compressed, marked up, nonproprietary or proprietary form, including -any word processing or hypertext form. However, if you provide access -to or distribute copies of a Project Gutenberg-tm work in a format -other than "Plain Vanilla ASCII" or other format used in the official -version posted on the official Project Gutenberg-tm web site -(www.gutenberg.org), you must, at no additional cost, fee or expense -to the user, provide a copy, a means of exporting a copy, or a means -of obtaining a copy upon request, of the work in its original "Plain -Vanilla ASCII" or other form. Any alternate format must include the -full Project Gutenberg-tm License as specified in paragraph 1.E.1. - -1.E.7. Do not charge a fee for access to, viewing, displaying, -performing, copying or distributing any Project Gutenberg-tm works -unless you comply with paragraph 1.E.8 or 1.E.9. - -1.E.8. You may charge a reasonable fee for copies of or providing -access to or distributing Project Gutenberg-tm electronic works -provided that - -* You pay a royalty fee of 20% of the gross profits you derive from - the use of Project Gutenberg-tm works calculated using the method - you already use to calculate your applicable taxes. The fee is owed - to the owner of the Project Gutenberg-tm trademark, but he has - agreed to donate royalties under this paragraph to the Project - Gutenberg Literary Archive Foundation. Royalty payments must be paid - within 60 days following each date on which you prepare (or are - legally required to prepare) your periodic tax returns. Royalty - payments should be clearly marked as such and sent to the Project - Gutenberg Literary Archive Foundation at the address specified in - Section 4, "Information about donations to the Project Gutenberg - Literary Archive Foundation." - -* You provide a full refund of any money paid by a user who notifies - you in writing (or by e-mail) within 30 days of receipt that s/he - does not agree to the terms of the full Project Gutenberg-tm - License. You must require such a user to return or destroy all - copies of the works possessed in a physical medium and discontinue - all use of and all access to other copies of Project Gutenberg-tm - works. - -* You provide, in accordance with paragraph 1.F.3, a full refund of - any money paid for a work or a replacement copy, if a defect in the - electronic work is discovered and reported to you within 90 days of - receipt of the work. - -* You comply with all other terms of this agreement for free - distribution of Project Gutenberg-tm works. - -1.E.9. If you wish to charge a fee or distribute a Project -Gutenberg-tm electronic work or group of works on different terms than -are set forth in this agreement, you must obtain permission in writing -from both the Project Gutenberg Literary Archive Foundation and The -Project Gutenberg Trademark LLC, the owner of the Project Gutenberg-tm -trademark. Contact the Foundation as set forth in Section 3 below. - -1.F. - -1.F.1. Project Gutenberg volunteers and employees expend considerable -effort to identify, do copyright research on, transcribe and proofread -works not protected by U.S. copyright law in creating the Project -Gutenberg-tm collection. Despite these efforts, Project Gutenberg-tm -electronic works, and the medium on which they may be stored, may -contain "Defects," such as, but not limited to, incomplete, inaccurate -or corrupt data, transcription errors, a copyright or other -intellectual property infringement, a defective or damaged disk or -other medium, a computer virus, or computer codes that damage or -cannot be read by your equipment. - -1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES - Except for the "Right -of Replacement or Refund" described in paragraph 1.F.3, the Project -Gutenberg Literary Archive Foundation, the owner of the Project -Gutenberg-tm trademark, and any other party distributing a Project -Gutenberg-tm electronic work under this agreement, disclaim all -liability to you for damages, costs and expenses, including legal -fees. YOU AGREE THAT YOU HAVE NO REMEDIES FOR NEGLIGENCE, STRICT -LIABILITY, BREACH OF WARRANTY OR BREACH OF CONTRACT EXCEPT THOSE -PROVIDED IN PARAGRAPH 1.F.3. YOU AGREE THAT THE FOUNDATION, THE -TRADEMARK OWNER, AND ANY DISTRIBUTOR UNDER THIS AGREEMENT WILL NOT BE -LIABLE TO YOU FOR ACTUAL, DIRECT, INDIRECT, CONSEQUENTIAL, PUNITIVE OR -INCIDENTAL DAMAGES EVEN IF YOU GIVE NOTICE OF THE POSSIBILITY OF SUCH -DAMAGE. - -1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If you discover a -defect in this electronic work within 90 days of receiving it, you can -receive a refund of the money (if any) you paid for it by sending a -written explanation to the person you received the work from. If you -received the work on a physical medium, you must return the medium -with your written explanation. The person or entity that provided you -with the defective work may elect to provide a replacement copy in -lieu of a refund. If you received the work electronically, the person -or entity providing it to you may choose to give you a second -opportunity to receive the work electronically in lieu of a refund. If -the second copy is also defective, you may demand a refund in writing -without further opportunities to fix the problem. - -1.F.4. Except for the limited right of replacement or refund set forth -in paragraph 1.F.3, this work is provided to you 'AS-IS', WITH NO -OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT -LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE. - -1.F.5. Some states do not allow disclaimers of certain implied -warranties or the exclusion or limitation of certain types of -damages. If any disclaimer or limitation set forth in this agreement -violates the law of the state applicable to this agreement, the -agreement shall be interpreted to make the maximum disclaimer or -limitation permitted by the applicable state law. The invalidity or -unenforceability of any provision of this agreement shall not void the -remaining provisions. - -1.F.6. INDEMNITY - You agree to indemnify and hold the Foundation, the -trademark owner, any agent or employee of the Foundation, anyone -providing copies of Project Gutenberg-tm electronic works in -accordance with this agreement, and any volunteers associated with the -production, promotion and distribution of Project Gutenberg-tm -electronic works, harmless from all liability, costs and expenses, -including legal fees, that arise directly or indirectly from any of -the following which you do or cause to occur: (a) distribution of this -or any Project Gutenberg-tm work, (b) alteration, modification, or -additions or deletions to any Project Gutenberg-tm work, and (c) any -Defect you cause. - -Section 2. Information about the Mission of Project Gutenberg-tm - -Project Gutenberg-tm is synonymous with the free distribution of -electronic works in formats readable by the widest variety of -computers including obsolete, old, middle-aged and new computers. It -exists because of the efforts of hundreds of volunteers and donations -from people in all walks of life. - -Volunteers and financial support to provide volunteers with the -assistance they need are critical to reaching Project Gutenberg-tm's -goals and ensuring that the Project Gutenberg-tm collection will -remain freely available for generations to come. In 2001, the Project -Gutenberg Literary Archive Foundation was created to provide a secure -and permanent future for Project Gutenberg-tm and future -generations. To learn more about the Project Gutenberg Literary -Archive Foundation and how your efforts and donations can help, see -Sections 3 and 4 and the Foundation information page at -www.gutenberg.org - - - -Section 3. Information about the Project Gutenberg Literary Archive Foundation - -The Project Gutenberg Literary Archive Foundation is a non profit -501(c)(3) educational corporation organized under the laws of the -state of Mississippi and granted tax exempt status by the Internal -Revenue Service. The Foundation's EIN or federal tax identification -number is 64-6221541. Contributions to the Project Gutenberg Literary -Archive Foundation are tax deductible to the full extent permitted by -U.S. federal laws and your state's laws. - -The Foundation's principal office is in Fairbanks, Alaska, with the -mailing address: PO Box 750175, Fairbanks, AK 99775, but its -volunteers and employees are scattered throughout numerous -locations. Its business office is located at 809 North 1500 West, Salt -Lake City, UT 84116, (801) 596-1887. Email contact links and up to -date contact information can be found at the Foundation's web site and -official page at www.gutenberg.org/contact - -For additional contact information: - - Dr. Gregory B. Newby - Chief Executive and Director - gbnewby@pglaf.org - -Section 4. Information about Donations to the Project Gutenberg -Literary Archive Foundation - -Project Gutenberg-tm depends upon and cannot survive without wide -spread public support and donations to carry out its mission of -increasing the number of public domain and licensed works that can be -freely distributed in machine readable form accessible by the widest -array of equipment including outdated equipment. Many small donations -($1 to $5,000) are particularly important to maintaining tax exempt -status with the IRS. - -The Foundation is committed to complying with the laws regulating -charities and charitable donations in all 50 states of the United -States. Compliance requirements are not uniform and it takes a -considerable effort, much paperwork and many fees to meet and keep up -with these requirements. We do not solicit donations in locations -where we have not received written confirmation of compliance. To SEND -DONATIONS or determine the status of compliance for any particular -state visit www.gutenberg.org/donate - -While we cannot and do not solicit contributions from states where we -have not met the solicitation requirements, we know of no prohibition -against accepting unsolicited donations from donors in such states who -approach us with offers to donate. - -International donations are gratefully accepted, but we cannot make -any statements concerning tax treatment of donations received from -outside the United States. U.S. laws alone swamp our small staff. - -Please check the Project Gutenberg Web pages for current donation -methods and addresses. Donations are accepted in a number of other -ways including checks, online payments and credit card donations. To -donate, please visit: www.gutenberg.org/donate - -Section 5. General Information About Project Gutenberg-tm electronic works. - -Professor Michael S. Hart was the originator of the Project -Gutenberg-tm concept of a library of electronic works that could be -freely shared with anyone. For forty years, he produced and -distributed Project Gutenberg-tm eBooks with only a loose network of -volunteer support. - -Project Gutenberg-tm eBooks are often created from several printed -editions, all of which are confirmed as not protected by copyright in -the U.S. unless a copyright notice is included. Thus, we do not -necessarily keep eBooks in compliance with any particular paper -edition. - -Most people start at our Web site which has the main PG search -facility: www.gutenberg.org - -This Web site includes information about Project Gutenberg-tm, -including how to make donations to the Project Gutenberg Literary -Archive Foundation, how to help produce our new eBooks, and how to -subscribe to our email newsletter to hear about new eBooks. - |