403 Account of the Rife of the Miffifippi Scheme; from "a Sketch of the Life and Projects of John Law of Laurifton :" By I. P. W. AFTER the establishment of the General Bank, Mr Law began to develope the plan of that great and ftupendous project he had long meditated, known by the name of the Miffifippi System, which, for a while, turned the heads of the French, and attracted the attention of all Europe; a project that, if carried into full execution, would, in all probability, have exalted France to a vaft fuperiority of power and wealth over every other ftate. The fcheme was no lefs than the vefting the whole privileges, effects, and poffeffions of all the foreign trading companies, the great farms, the profits of the mint, the general receipt of the king's revenue, and the management and property of the bank, in one great Company, who thus having in their hands all the trade, taxes, and royal revenues, might be enabled to multiply the notes of the bank to any extent they pleased, doubling or even trebling at will the circulating cafh of the kingdom; and, by the greatnefs of their funds, poffeffed of a power to carry the foreign trade, and the culture of the colonies, to a height altogether impracticable by any other means. The outlines of the plan being laid before the regent, met with the approbation of that prince; measures were taken for the establishment of the propofed company, and directions iffued for making the requifite grants to enable them to begin their operations. Accordingly, by letters patent, dated in Auguft 1717, a commercial company was erected, under the name of the Company of the Weft, to whom was granted the whole province of Louifiana, or the country on the river Miflifippi; from which last circumftance, its fubfequent proceedings came to be included under the general name of the Millilippi Syftem. Of this Company 200,000 actions (or fhares) were created, rated at 500 livres each; 3 E 2 and the fubfcription for them was ordered to he paid in billets d'etat, at that time, fo much difcredited, by reafon of the bad payment of their intereft, that 500 livres nominal value in them would not have fold upon 'change for more than 150 or 160 livres. In the fubfcription they were taken at the full value, fo this was effectually a loan from the Company to the King of 100 millions. The intereft of that fum, to be paid by his Majefty to the Company, was fixed at the rate of 4 per cent. the first year's intereft to be employed for commercial purposes, and the annual-rents of the following years to be allotted for paying regularly the dividend on the actions, which was fixed at 20 livres per annum on each, exclufive of the profits of the trade. The Of this Company of the Weft, Mr Law (who had now advanced fo high in the Regent's favour, that the whole minifterial power was reckoned to be divided betwixt him, the Abbe du Bois. Minifter of Foreign Affairs, and M. D'Argenfon, Keeper of the feals), was named Director General. actions were eagerly fought after, Luifiana having been reprefented as a region abounding in gold and filver, of a fertile foil, capable of every fort of cultivation. The unimproved parts of that country were fold for 30,000 livres the fquare league, at which many purchased to the extent of 600,000 livres; and vigorous preparations were made for firting out veffels to tranfport thither labourers and workmen of every kind. The demand for Billets d'etat, for the purchase of actions, occafioned their immediately rifing to their full nominal value. On the 4th of September 1718, the Company of the Weft undertook the Farm of Tobacco, for which they paid 2,020,000 liv. advanced rent to the King; and on the 15th of December following, they acquired the charter and and effects of the Senegal Company: But by far the most important grant was that made in May 1719, when an edict was published transferring to this Company the exclufive privilege of trading to the Eaft Indies, Ching, and the South Seas, with all the poffeffions and effects which had belonged to the China and India Companies, on condition of their paying the lawful debts of thefe Companies now diffolved. The Company of the Weft afmed on this occafion, the title of the Company of the Indies; 50,000 new actions were ordered to be created, rated at 550 liv. each, payable in coin, to be employed partly in fatisfying the creditors of the old Companies, and partly in building of vefiels, and other preparations for carrying on the trade. The price of Actions quickly rofe to 1000 liv. the hopes of the public leing raised by the favourable profpes of a most lucrative commerce. On the 25th of July 1719, the Mint was made over to the Company of the Indies, for a confideration of 50 millions of livres, to be paid to the King within fifteen months; and 50.000 new Actions, rated at i coelv. each, were directed to be created, in order to raise that fum. On the 27th of Auguft following, the Regent took the great farms out of the hands of the Farmers General, and made over the leafe to the Company of the Indies, who agreed to pay 3,500,000 liv. advanced rent for them; and on the 31ft of the fame month, the Company obtained the general receipt of other branches of the King's revenue. When they had acquired all thefe, grants, and had thus concentered in themfelves the whole foreign trade and poffeffions of France, and the collection and management of all the royal revenues, they promifed an anBual dividend of 200 livres on every fhare, the confequen. c of which was, that the price of Actions inftantly rofe In the market to goco livres; the pub Tun upon the last creation of 50,000 with fuch eagerness, that nearly double the requifite fum was fubfcribed for, and the greateft intrigues and quarrels were employed to fecure a place in that fubfcription. It was fome weeks before the names of the actioners were declared, during which time Mr Law's door was fhut, and all the people of quality in France appeared on foot in hundreds, before. his houfe in the Place Vendome. The company now came under an obligation to lend the king, that he might pay off his creditors, the fam of 1500 million of livres, at the rateof 3 per cent per annum, to which rate the intereft of the 100 milliers formerly lent to his majefly, (on the first creation of actions at 4 per cent) was alfo reduced; the king confequently had to pay them, in all 43 millions a-year. To raife this fum of 1500 millions, there were, in the months of September and October 1719, 300,000 new actions created, fubfcription for which was fixed at 5000 livres each. The actions were thus brought to their full number of 600,000, (for it is needlefs to take any notice of 24,000 more created on the 4th of October by the private orders of the Regen, but afterwards. fuppreffed;) to anfwer the dividends upon which the Company had, according to fome, the following annual revenue, viz. Intereft paid by the Ditto upon the Mint, of Tobacco, receipt of taxes, &c. Ditto upon the trade, livres. 48,000,000. 15,000,coc. 4,000,000. 2,000,000. 1,500,000 10,000,000 writers on this fubject, however, computed the annual revenue of this great Company at no less than 131 millions of livres, viz. 48 millions in tereit from the King, 39 millions profits upon the farms, the mint, and the receipt of taxes, and 44 millions profits upon their trade, in which cafe they could well afford a dividend of even more than 200 livres on every Action. The covetoufnefs which thefe fair profpects of profit, and the prodigious gains of the first proprietors, excited among all ranks, was fuch as no nation had ever beheld before. An aniverfal infatuation for the acquifition of shares in the India Company feemed to occupy the whole kingdom, from the lowest of the people up to Magiftrates, Prelates, and Princes. This infatuation, of which, at the prefent day, we can fcarcely form a conception, increafed in proportion to the difficulty of obtaining faccefs; for the whole 300,000 Actions laft created, being, by a particular agreement, kept up in order to be fold to the Regent, who had alfo got poffeffion of 100,000 of former creations, no more than 200,000 remained in the hands of the public, of which only a part, quite inadequate to the demand, was now brought to market. The frenzy prevailed fo far, that the whole nation,, clergy and laity, peers and plebeians ftatefmen and princes, nay even ladies, who had or could procure money for that purpofe, turned flock-jobbers, outbidding each other with fuch avidity, that in November 1719, after fome fluctuations, the price of Actions rofe to about 10,000 liv. more than fixty times the fum they originally fold for, taking into the account the difcredit of the Billets d'etat. So much indeed were the people interested in this bufinefs, that nothing was talked of but Actions, and every place echoed with Miffifippi and Quinquempoix *. All claffes appeared to have but one object, the acquifition of fhares of the India Company; mechanics laid by their work, tradefmen forfook their fhops, all degrees entirely neglected their employments to embark in this new occupation; and the few that did not proceed to that extreme, conducted themselves in a manner which manifefted the little concern they took in any thing foreign to the Miffippit. The courtiers, according to their ufual cuftom of following implicitely the royal example, engaged fo deeply in this bufinefs, that it was faid only five perfons of that defcription (the Marechals de Vil leroi and de Villars, the Dukes de St Simon and de la Rochefoucault, and the Chancellor) had kept free from the contagion. The negociations for Actions were at firft carried on in the Rue Quinquempoix, to the great emolument of the occupiers of houfes in that street, apartments letting at the moft enormous rates. At length it becoming impoffible for all to procure the accommodation of a room, most of the flock job. bers tranfacted their bufinefs in the open air. So great was the concourfe, that the treet was quite cheacked up by break of day, and the crowd ftill continued to increafe till the evening bell was rung, when they were obli ged to be driven away by force. It now became neceffary to shift the business to a more commodious fitua tion The ftreet where the flock-jobbing was carried on. it is related of a phyfician called Chirac, that on his way to vifit a female patient, having heard the price of Actions was falling, he was fo much affected by that piece of news he could think of nothing elfe; and accordingly, when feeling the lady's pulfe, he kept crying out, O good God, it falls, it it falls, falls! The invalid, naturally alarmed, began to ring the bell with all her force, crying out that he was a dead woman, and had almoft expired with apprehenfion, till the doctor affured her that her pulfe was in a very good state, but that his mind ran fo much upon Actions, he came to utter the expreffions hat terrified her, in reference to the fall of their value. tion, and the flock-jobbing was accordingly transferred to the Place Vendome *, from whence it was in a fhort time removed, on account of the complaints made by the Chancellor, that the noife prevented him from attending to the caufes in the chancery. Mr Law thereupon agreed with the Prince of Carignan to purchase his Hotel of Soiffons, at the enormous price, as is faid, of 1,400,000 liv and in the fpacious gardens of that edifice caufed about 100 pavilions to be erected, each of which was rated at 500 liv. a month. To oblige the brokers to make use of them, an ordonnance was iffued prohibiting any bargains for stock to be concluded except in these pavilions †. Account of the Destruction of the Missisippi Scheme; from the Same. THE envy that generally is the attendant on perfons raised to high offices of ftate, Mr Law had the misfortune to experience; and in his cafe it was hieghtened in a fuperlative degree, from the circumftances of his being a foreigner. He was hated by almost all the Ministry, and obnoxious to all the old retainers of the court. Cardinal Du Bois in particular, formerly the Regent's tutor, one of the moft profligate of mankind, could not, without the greatest pain, obferve his wonted influence over the mind of his old pupil quite destroyed by the fuperior powers of the Comptroller General, who, he had reafon to fufpect, was determined to have him dismissed from his office. This made him attempt all methods to injure Mr Law in the opinion of the Regent, in which he was joined by feveral of his colleagues. A favourable opportunity foon after occurred, and was eagerly embraced by them, of engaging the Duke in a scheme which completely ruined the great defigns of the Comptroller General, by putting an end to his plans of public credit and national affluence. It has been before mentioned, that at the 1ft of May 1720, Bank notes had been fabricated to the amount of 2600 millions of livres. The fpecie in the kingdom, at the rate of 65 liv. to the marc, was estimated at 1300 millions. Cardinal Du Bois, M. D'Argenfon, and others of the Miniftry, now reprefented to the Regent that it was become abfolutely neceflary to form an equal proportion betwixt the notes and the coin, by either rai fing the denomination of the latter to 130 liv. the marc, by which the 1300 millions of fpecie would have been augmented to 2600 millions; or reducing the value of the notes one half, that is, to 1300 millions. This point was The memoirs of the Regency take notice of a hump-backed man, who acquired in the courfe of a few days 150,000 livres by letting out his hump as a writing-defk to the brokers in the Rue Quinquempoix.A plan of Paris being about this time laid before Louis XV. then only ten years of age, the young monarch found fault with it because that fireet was not diftinguifhed from the others by being gilded. The murder and robbery of a rich stock-jobber, by a young Flemish nobleman, Count Horn, and two afsociates, who, under pretence of bargaining for Actions, conducted the unfortunate man to a private room in a tavern in the Rue de Venife, and there difpatched him with a poignard 22d March 1720, was one of the reasons for this restriction. The Count, who was only 22 years of age, being taken the fame day, was condemned to be broken alive upon the wheel; and this fentence was put in execution, notwithstanding he was allied to feveral fovereign houfes and related to the Duke of Orleans himself. The greateft intereft was made for his life, but all folicitations on that head were unvailing, Mr Law fhewing the Regent the abfolute neceffity of making on example of him, at a time when moft people carried their whole fortunes in their pockets. was difcuffed in council; fome of the members, among whom was the Comptroller General, contended ftrenuoufly for letting matters ftand as they were, or if it was judged neceffary to take fome fteps in that affair, they propofed to raise the denomination of the fpecie, which had been frequently practifed befɔre; but the majority, who bore uo good will to Mr Law, favouring the propofition for lowering the value of the paper, it was at laft, after a grave, wife, and learned deliberation, determined to iffue an Arret to that purpofe. Accordingly on the 21ft of May 1720, an Arret was published, stating, that the King having judged that the general interest of his fubjects required that the price, or nominal value of the India Company's Actions, and of Bank notes, fhould be leffened, for maintaining them in a juft proportion with the coin and other commodities of the kingdom; his Majefty ordained, that the Actions of the India Company fhould be reduced, beginning from the day of the publication of the prefent arret, to 8000 liv. on the ift of July to 7500 liv. on the 1ft of Auguft to 7000 liv. and fo on by 500 liv. a month till the 1st of December, when they were to remain fixed at 5000 l.v. That the Bank notes fhould also be reduced fo as they should be received in payments from that date at the follow ing rates: Thofe of 10,000 liv. for 8000 liv. thofe of 1000 liv. for 800, of 100 for 80, and of 10 for 8; that on the rft of July the faid notes fhould be further reduced; thofe of 10,000 liv. to 7500 liv. and fo on by 500 liv. a month, the leffer notes being reduced in the like proportion, till the 1ft of December, when it was declared that the faid notes fhould remain reduced and fixed, those of 10,000 liv. at 5000 liv. thofe of 1000 at 500, those of 100 at 50, and those of 10 at 5. That this unjustifiable and fatal ftep was taken in oppofition to the advice of the Comptroller General, is affert ed upon the authority of his nephew the Baron de Laurifton, who fays, "On fe decida, malgré l'avis de Mr "Law, et fur fon rapport cependant, "puisqu'il etoit Controleur General "des Finances, mais peu ecouté, de lancer l'arret, &c."—and indeed it feems hardly credible that one fo well verfed in the principles of credit as Mr Law was, could approve of a proceeding fo diametrically oppofite to them. Some go fo far as to maintain, on the authority of a letter from a Duke and Peer of France to an English nobleman, that the moft ferious apprehenfions being entertained by the other European ftates of the vaft increase of the power and wealth of France in the event of the Syftem's fucceeding, the Minifters of the Quadruple Alliance plotted together to occasion its miscarriage, and fuggefted the above mode to the enemies of Mr Law. Be the caufe as it may, the arret was published, and the confequence of this fhameful infraction of the royal engagement, which folemnly promifed, that whatever alterations fhould take place on the coin, the Bank notes fhould always remain invariable, and be paid in full, were fuch as might have been expected. From that moment, "In pejus ruere, ac retro fublapfa referri," the whole paper fabric fell at once to the ground, the notes loft all credit, no perfon would medale with them; and, although the Bank did not inimediately top payment, there was no poffibility of getting near it, the avenues being, at the firft alarm, blocked up by foldiers, and the tellers employed in changing the notes of their friends and thofe of the Directors, fo that the day following, May 22d, any body might have ftarved with 100 millions in paper money in his pocket. The confternation which feized all ranks of people upon the publication of this fatal arret was quickly converted into rage, fo that it became neceflary to ftation a number of troops in the market |