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MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS
By Charles Mackay
Author Of
"The Thames And Its Tributaries," "The Hope Of The World," Etc.
"Il est bon de connaitre les delires de l'esprit humain. Chaque people a
ses folies plus ou moins grossieres." MILLOT
VOL I.
LONDON: RICHARD BENTLEY, NEW BURLINGTON STREET. PUBLISHER IN ORDINARY TO
HER MAJESTY. 1841.
CONTENTS OF THE FIRST VOLUME
THE MISSISSIPPI SCHEME
THE SOUTH SEA BUBBLE
THE TULIPOMANIA
RELICS
MODERN PROPHECIES
POPULAR ADMIRATION FOR GREAT THIEVES
INFLUENCE OF POLITICS AND RELIGION ON THE HAIR AND BEARD
DUELS AND ORDEALS
THE LOVE OF THE MARVELOUS AND THE DISBELIEF OF THE TRUE
POPULAR FOLLIES IN GREAT CITIES
THE O. P. MANIA
THE THUGS, OR PHANSIGARS
NATIONAL DELUSIONS.
N'en deplaise a ces fous nommes sages de Grece;
En ce monde il n'est point de parfaite sagesse;
Tous les hommes sont fous, et malgre tous leurs soins,
Ne different entre eux que du plus ou du moins.
BOILEAU.
In reading the history of nations, we find that, like individuals, they
have their whims and their peculiarities; their seasons of excitement
and recklessness, when they care not what they do. We find that whole
communities suddenly fix their minds upon one object, and go mad in its
pursuit; that millions of people become simultaneously impressed with
one delusion, and run after it, till their attention is caught by some
new folly more captivating than the first. We see one nation suddenly
seized, from its highest to its lowest members, with a fierce desire
of military glory; another as suddenly becoming crazed upon a religious
scruple, and neither of them recovering its senses until it has shed
rivers of blood and sowed a harvest of groans and tears, to be reaped
by its posterity. At an early age in the annals of Europe its population
lost their wits about the Sepulchre of Jesus, and crowded in frenzied
multitudes to the Holy Land: another age went mad for fear of the Devil,
and offered up hundreds of thousands of victims to the delusion of
witchcraft. At another time, the many became crazed on the subject of
the Philosopher's Stone, and committed follies till then unheard of in
the pursuit. It was once thought a venial offence in very many countries
of Europe to destroy an enemy by slow poison. Persons who would have
revolted at the idea of stabbing a man to the heart, drugged his pottage
without scruple. Ladies of gentle birth and manners caught the
contagion of murder, until poisoning, under their auspices, became quite
fashionable. Some delusions, though notorious to all the world, have
subsisted for ages, flourishing as widely among civilized and polished
nations as among the early barbarians with whom they originated,--that
of duelling, for instance, and the belief in omens and divination of
the future, which seem to defy the progress of knowledge to eradicate
entirely from the popular mind. Money, again, has often been a cause
of the delusion of multitudes. Sober nations have all at once become
desperate gamblers, and risked almost their existence upon the turn of
a piece of paper. To trace the history of the most prominent of these
delusions is the object of the present pages. Men, it has been well
said, think in herds; it will be seen that they go mad in herds, while
they only recover their senses slowly, and one by one.
In the present state of civilization, society has often shown itself
very prone to run a career of folly from the last-mentioned cases.
This infatuation has seized upon whole nations in a most extraordinary
manner. France, with her Mississippi madness, set the first great
example, and was very soon imitated by England with her South Sea
Bubble. At an earlier period, Holland made herself still more ridiculous
in the eyes of the world, by the frenzy which came over her people for
the love of Tulips. Melancholy as all these delusions were in their
ultimate results, their history is most amusing. A more ludicrous and
yet painful spectacle, than that which Holland presented in the years
1635 and 1636, or France in 1719 and 1720, can hardly be imagined.
Taking them in the order of their importance, we shall commence our
history with John Law and the famous Mississippi scheme of the years
above mentioned.
THE MISSISSIPPI SCHEME
Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry 'em down;
Divide the empty nothing into shares,
And set the crowd together by the ears.
Defoe.
The personal character and career of one man are so intimately connected
with the great scheme of the years 1719 and 1720, that a history of the
Mississippi madness can have no fitter introduction than a sketch of the
life of its great author, John Law. Historians are divided in opinion as
to whether they should designate him a knave or a madman. Both epithets
were unsparingly applied to him in his lifetime, and while the unhappy
consequences of his projects were still deeply felt. Posterity, however,
has found reason to doubt the justice of the accusation, and to confess
that John Law was neither knave nor madman, but one more deceived
than deceiving; more sinned against than sinning. He was thoroughly
acquainted with the philosophy and true principles of credit. He
understood the monetary question better than any man of his day; and if
his system fell with a crash so tremendous, it was not so much his
fault as that of the people amongst whom he had erected it. He did not
calculate upon the avaricious frenzy of a whole nation; he did not see
that confidence, like mistrust, could be increased, almost ad infinitum,
and that hope was as extravagant as fear. How was he to foretell that
the French people, like the man in the fable, would kill, in their
frantic eagerness, the fine goose he had brought to lay them so many
golden eggs? His fate was like that which may be supposed to have
overtaken the first adventurous boatman who rowed from Erie to Ontario.
Broad and smooth was the river on which he embarked; rapid and pleasant
was his progress; and who was to stay him in his career? Alas for him!
the cataract was nigh. He saw, when it was too late, that the tide which
wafted him so joyously along was a tide of destruction; and when he
endeavoured to retrace his way, he found that the current was too strong
for his weak efforts to stem, and that he drew nearer every instant to
the tremendous falls. Down he went over the sharp rocks, and the
waters with him. He was dashed to pieces with his bark, but the waters,
maddened and turned to foam by the rough descent, only boiled and
bubbled for a time, and then flowed on again as smoothly as ever. Just
so it was with Law and the French people. He was the boatman and they
were the waters.
John Law was born at Edinburgh in the year 1671. His father was the
younger son of an ancient family in Fife, and carried on the business
of a goldsmith and banker. He amassed considerable wealth in his trade,
sufficient to enable him to gratify the wish, so common among his
countrymen, of adding a territorial designation to his name. He
purchased with this view the estates of Lauriston and Randleston, on
the Frith of Forth on the borders of West and Mid Lothian, and was
thenceforth known as Law of Lauriston. The subject of our memoir, being
the eldest son, was received into his father's counting-house at the
age of fourteen, and for three years laboured hard to acquire an insight
into the principles of banking, as then carried on in Scotland. He
had always manifested great love for the study of numbers, and his
proficiency in the mathematics was considered extraordinary in one of
his tender years. At the age of seventeen he was tall, strong, and well
made; and his face, although deeply scarred with the small-pox, was
agreeable in its expression, and full of intelligence. At this time he
began to neglect his business, and becoming vain of his person, indulged
in considerable extravagance of attire. He was a great favourite
with the ladies, by whom he was called Beau Law, while the other sex,
despising his foppery, nicknamed him Jessamy John. At the death of his
father, which happened in 1688, he withdrew entirely from the desk,
which had become so irksome, and being possessed of the revenues of the
paternal estate of Lauriston, he proceeded to London, to see the world.
He was now very young, very vain, good-looking, tolerably rich, and
quite uncontrolled. It is no wonder that, on his arrival in the capital,
he should launch out into extravagance. He soon became a regular
frequenter of the gaming-houses, and by pursuing a certain plan,
based upon some abstruse calculation of chances, he contrived to gain
considerable sums. All the gamblers envied him his luck, and many made
it a point to watch his play, and stake their money on the same chances.
In affairs of gallantry he was equally fortunate; ladies of the first
rank smiled graciously upon the handsome Scotchman--the young, the rich,
the witty, and the obliging. But all these successes only paved the way
for reverses. After he had been for nine years exposed to the dangerous
attractions of the gay life he was leading, he became an irrecoverable
gambler. As his love of play increased in violence, it diminished
in prudence. Great losses were only to be repaired by still greater
ventures, and one unhappy day he lost more than he could repay without
mortgaging his family estate. To that step he was driven at last. At
the same time his gallantry brought him into trouble. A love affair, or
slight flirtation, with a lady of the name of Villiers [Miss Elizabeth
Villiers, afterwards Countess of Orkney] exposed him to the resentment
of a Mr. Wilson, by whom he was challenged to fight a duel. Law
accepted, and had the ill fortune to shoot his antagonist dead upon the
spot. He was arrested the same day, and brought to trial for murder
by the relatives of Mr. Wilson. He was afterwards found guilty, and
sentenced to death. The sentence was commuted to a fine, upon the ground
that the offence only amounted to manslaughter. An appeal being lodged
by a brother of the deceased, Law was detained in the King's Bench,
whence, by some means or other, which he never explained, he contrived
to escape; and an action being instituted against the sheriffs, he was
advertised in the Gazette, and a reward offered for his apprehension. He
was described as "Captain John Law, a Scotchman, aged twenty-six; a
very tall, black, lean man; well shaped, above six feet high, with large
pockholes in his face; big nosed, and speaking broad and loud." As this
was rather a caricature than a description of him, it has been supposed
that it was drawn up with a view to favour his escape. He succeeded in
reaching the Continent, where he travelled for three years, and devoted
much of his attention to the monetary and banking affairs of the
countries through which he passed. He stayed a few months in Amsterdam,
and speculated to some extent in the funds. His mornings were devoted
to the study of finance and the principles of trade, and his evenings to
the gaming-house. It is generally believed that he returned to Edinburgh
in the year 1700. It is certain that he published in that city his
"Proposals and Reasons for constituting a Council of Trade." This
pamphlet did not excite much attention.
In a short time afterwards he published a project for establishing what
he called a Land-bank [The wits of the day called it a sand-bank, which
would wreck the vessel of the state.], the notes issued by which
were never to exceed the value of the entire lands of the state, upon
ordinary interest, or were to be equal in value to the land, with the
right to enter into possession at a certain time. The project excited a
good deal of discussion in the Scottish parliament, and a motion for
the establishment of such a bank was brought forward by a neutral
party, called the Squadrone, whom Law had interested in his favour.
The Parliament ultimately passed a resolution to the effect, that, to
establish any kind of paper credit, so as to force it to pass, was an
improper expedient for the nation.
Upon the failure of this project, and of his efforts to procure a pardon
for the murder of Mr. Wilson, Law withdrew to the Continent, and resumed
his old habits of gaming. For fourteen years he continued to roam about,
in Flanders, Holland, Germany, Hungary, Italy, and France. He soon
became intimately acquainted with the extent of the trade and resources
of each, and daily more confirmed in his opinion that no country could
prosper without a paper currency. During the whole of this time he
appears to have chiefly supported himself by successful play. At every
gambling-house of note in the capitals of Europe, he was known and
appreciated as one better skilled in the intricacies of chance than any
other man of the day. It is stated in the "Biographie Universelle" that
he was expelled, first from Venice, and afterwards from Genoa, by the
magistrates, who thought him a visitor too dangerous for the youth
of those cities. During his residence in Paris he rendered himself
obnoxious to D'Argenson, the lieutenant-general of the police, by whom
he was ordered to quit the capital. This did not take place, however,
before he had made the acquaintance in the saloons, of the Duke de
Vendome, the Prince de Conti, and of the gay Duke of Orleans, the latter
of whom was destined afterwards to exercise so much influence over his
fate. The Duke of Orleans was pleased with the vivacity and good sense
of the Scottish adventurer, while the latter was no less pleased with
the wit and amiability of a prince who promised to become his patron.
They were often thrown into each other's society, and Law seized every
opportunity to instil his financial doctrines into the mind of one whose
proximity to the throne pointed him out as destined, at no very distant
date, to play an important part in the government.
Shortly before the death of Louis XIV, or, as some say, in 1708, Law
proposed a scheme of finance to Desmarets, the Comptroller. Louis is
reported to have inquired whether the projector were a Catholic, and, on
being answered in the negative, to have declined having anything to
do with him. [This anecdote, which is related in the correspondence
of Madame de Baviere, Duchess of Orleans, and mother of the Regent,
is discredited by Lord John Russell, in his "History of the principal
States of Europe, from the Peace of Utrecht;" for what reason he
does not inform us. There is no doubt that Law proposed his scheme to
Desmarets, and that Louis refused to hear of it. The reason given for
the refusal is quite consistent with the character of that bigoted and
tyrannical monarch.]
It was after this repulse that he visited Italy. His mind being still
occupied with schemes of finance, he proposed to Victor Amadeus, Duke of
Savoy, to establish his land-bank in that country. The Duke replied that
his dominions were too circumscribed for the execution of so great a
project, and that he was by far too poor a potentate to be ruined. He
advised him, however, to try the King of France once more; for he was
sure, if he knew anything of the French character, that the people would
be delighted with a plan, not only so new, but so plausible.
Louis XIV died in 1715, and the heir to the throne being an infant only
seven years of age, the Duke of Orleans assumed the reins of government,
as Regent, during his minority. Law now found himself in a more
favourable position. The tide in his affairs had come, which, taken at
the flood, was to waft him on to fortune. The Regent was his friend,
already acquainted with his theory and pretensions, and inclined,
moreover, to aid him in any efforts to restore the wounded credit of
France, bowed down to the earth by the extravagance of the long reign of
Louis XIV.
Hardly was that monarch laid in his grave ere the popular hatred,
suppressed so long, burst forth against his memory. He who, during his
life, had been flattered with an excess of adulation, to which history
scarcely offers a parallel, was now cursed as a tyrant, a bigot, and
a plunderer. His statues were pelted and disfigured; his effigies
torn down, amid the execrations of the populace, and his name rendered
synonymous with selfishness and oppression. The glory of his arms
was forgotten, and nothing was remembered but his reverses, his
extravagance, and his cruelty.
The finances of the country were in a state of the utmost disorder.
A profuse and corrupt monarch, whose profuseness and corruption were
imitated by almost every functionary, from the highest to the lowest
grade, had brought France to the verge of ruin. The national debt
amounted to 3000 millions of livres, the revenue to 145 millions, and
the expenditure to 142 millions per annum; leaving only three millions
to pay the interest upon 3000 millions. The first care of the Regent was
to discover a remedy for an evil of such magnitude, and a council was
early summoned to take the matter into consideration. The Duke de St.
Simon was of opinion that nothing could save the country from revolution
but a remedy at once bold and dangerous. He advised the Regent to
convoke the States-General, and declare a national bankruptcy. The
Duke de Noailles, a man of accommodating principles, an accomplished
courtier, and totally averse from giving himself any trouble or
annoyance that ingenuity could escape from, opposed the project of St.
Simon with all his influence. He represented the expedient as alike
dishonest and ruinous. The Regent was of the same opinion, and this
desperate remedy fell to the ground.
The measures ultimately adopted, though they promised fair, only
aggravated the evil. The first, and most dishonest measure, was of no
advantage to the state. A recoinage was ordered, by which the currency
was depreciated one-fifth; those who took a thousand pieces of gold or
silver to the mint received back an amount of coin of the same nominal
value, but only four-fifths of the weight of metal. By this contrivance
the treasury gained seventy-two millions of livres, and all the
commercial operations of the country were disordered. A trifling
diminution of the taxes silenced the clamours of the people, and for the
slight present advantage the great prospective evil was forgotten.
A chamber of justice was next instituted, to inquire into the
malversations of the loan-contractors and the farmers of the revenues.
Tax collectors are never very popular in any country, but those of
France at this period deserved all the odium with which they were
loaded. As soon as these farmers-general, with all their hosts of
subordinate agents, called maltotiers [From maltote, an oppressive
tax.], were called to account for their misdeeds, the most extravagant
joy took possession of the nation. The Chamber of Justice, instituted
chiefly for this purpose, was endowed with very extensive powers. It was
composed of the presidents and councils of the parliament, the judges
of the Courts of Aid and of Requests, and the officers of the Chamber
of Account, under the general presidence of the minister of finance.
Informers were encouraged to give evidence against the offenders by the
promise of one-fifth part of the fines and confiscations. A tenth of all
concealed effects belonging to the guilty was promised to such as should
furnish the means of discovering them.
The promulgation of the edict constituting this court caused a degree
of consternation among those principally concerned which can only
be accounted for on the supposition that their peculation had been
enormous. But they met with no sympathy. The proceedings against them
justified their terror. The Bastile was soon unable to contain the
prisoners that were sent to it, and the gaols all over the country
teemed with guilty or suspected persons. An order was issued to all
innkeepers and postmasters to refuse horses to such as endeavoured
to seek safety in flight; and all persons were forbidden, under heavy
fines, to harbour them or favour their evasion. Some were condemned to
the pillory, others to the gallies, and the least guilty to fine
and imprisonment. One only, Samuel Bernard, a rich banker, and
farmer-general of a province remote from the capital, was sentenced to
death. So great had been the illegal profits of this man,--looked
upon as the tyrant and oppressor of his district,--that he offered six
millions of livres, or 250,000 pounds sterling, to be allowed to escape.
His bribe was refused, and he suffered the penalty of death. Others,
perhaps more guilty, were more fortunate. Confiscation, owing to the
concealment of their treasures by the delinquents, often produced less
money than a fine. The severity of the government relaxed, and fines,
under the denomination of taxes, were indiscriminately levied upon all
offenders. But so corrupt was every department of the administration,
that the country benefited but little by the sums which thus flowed into
the treasury. Courtiers, and courtiers' wives and mistresses, came in
for the chief share of the spoils. One contractor had been taxed in
proportion to his wealth and guilt, at the sum of twelve millions of
livres. The Count * * *, a man of some weight in the government, called
upon him, and offered to procure a remission of the fine, if he would
give him a hundred thousand crowns. "Vous etes trop tard, mon ami,"
replied the financier; "I have already made a bargain with your wife for
fifty thousand." [This anecdote is related by M. de la Hode, in his Life
of Philippe of Orleans. It would have looked more authentic if he had
given the names of the dishonest contractor and the still more dishonest
minister. But M. de la Hode's book is liable to the same objection as
most of the French memoirs of that and of subsequent periods. It is
sufficient with most of them that an anecdote be ben trovato; the veto
is but matter of secondary consideration.]
About a hundred and eighty millions of livres were levied in this
manner, of which eighty were applied in payment of the debts contracted
by the government. The remainder found its way into the pockets of the
courtiers. Madame de Maintenon, writing on this subject, says, "We hear
every day of some new grant of the Regent; the people murmur very much
at this mode of employing the money taken from the peculators."
The people, who, after the first burst of their resentment is over,
generally express a sympathy for the weak, were indignant that so much
severity should be used to so little purpose. They did not see the
justice of robbing one set of rogues to fatten another. In a few months
all the more guilty had been brought to punishment, and the chamber of
justice looked for victims in humbler walks of life. Charges of fraud
and extortion were brought against tradesmen of good character, in
consequence of the great inducements held out to common informers. They
were compelled to lay open their affairs before this tribunal in order
to establish their innocence. The voice of complaint resounded from
every side, and at the expiration of a year the government found it
advisable to discontinue further proceedings. The chamber of justice was
suppressed, and a general amnesty granted to all against whom no charges
had yet been preferred.
In the midst of this financial confusion Law appeared upon the scene.
No man felt more deeply than the Regent the deplorable state of the
country, but no man could be more averse from putting his shoulders
manfully to the wheel. He disliked business; he signed official
documents without proper examination, and trusted to others what he
should have undertaken himself. The cares inseparable from his high
office were burdensome to him; he saw that something was necessary to
be done, but he lacked the energy to do it, and had not virtue enough
to sacrifice his case and his pleasures in the attempt. No wonder that,
with this character, he listened favourably to the mighty projects, so
easy of execution, of the clever adventurer whom he had formerly known,
and whose talents he appreciated.
When Law presented himself at court, he was most cordially received.
He offered two memorials to the Regent, in which he set forth the
evils that had befallen France, owing to an insufficient currency,
at different times depreciated. He asserted that a metallic currency,
unaided by a paper money, was wholly inadequate to the wants of a
commercial country, and particularly cited the examples of Great
Britain and Holland to show the advantages of paper. He used many
sound arguments on the subject of credit, and proposed, as a means of
restoring that of France, then at so low an ebb among the nations, that
he should be allowed to set up a bank, which should have the management
of the royal revenues, and issue notes, both on that and on landed
security. He further proposed that this bank should be administered
in the King's name, but subject to the control of commissioners, to be
named by the States-General.
While these memorials were under consideration, Law translated into
French his essay on money and trade, and used every means to extend
through the nation his renown as a financier. He soon became talked of.
The confidants of the Regent spread abroad his praise, and every one
expected great things of Monsieur Lass. [The French pronounced his name
in this manner to avoid the ungallic sound, aw. After the failure of his
scheme, the wags said the nation was lasse de lui, and proposed that he
should in future be known by the name of Monsieur Helas!]
On the 5th of May, 1716, a royal edict was published, by which Law was
authorised, in conjunction with his brother, to establish a bank, under
the name of Law and Company, the notes of which should be received in
payment of the taxes. The capital was fixed at six millions of livres,
in twelve thousand shares of five hundred livres each, purchasable
one-fourth in specie and the remainder in billets d'etat. It was not
thought expedient to grant him the whole of the privileges prayed for
in his memorials until experience should have shown their safety and
advantage.
Law was now on the high road to fortune. The study of thirty years was
brought to guide him in the management of his bank. He made all his
notes payable at sight, and in the coin current at the time they
were issued. This last was a master-stroke of policy, and immediately
rendered his notes more valuable than the precious metals. The latter
were constantly liable to depreciation by the unwise tampering of the
government. A thousand livres of silver might be worth their nominal
value one day and be reduced one-sixth the next, but a note of Law's
bank retained its original value. He publicly declared at the same time
that a banker deserved death if he made issues without having sufficient
security to answer all demands. The consequence was, that his notes
advanced rapidly in public estimation, and were received at one per
cent. more than specie. It was not long before the trade of the country
felt the benefit. Languishing commerce began to lift up her head; the
taxes were paid with greater regularity and less murmuring, and a degree
of confidence was established that could not fail, if it continued, to
become still more advantageous. In the course of a year Law's notes rose
to fifteen per cent. premium, while the billets d'etat, or notes
issued by the government, as security for the debts contracted by the
extravagant Louis XIV, were at a discount of no less than seventy-eight
and a half per cent. The comparison was too great in favour of Law not
to attract the attention of the whole kingdom, and his credit extended
itself day by day. Branches of his bank were almost simultaneously
established at Lyons, Rochelle, Tours, Amiens, and Orleans.
The Regent appears to have been utterly astonished at his success, and
gradually to have conceived the idea, that paper, which could so aid a
metallic currency, could entirely supersede it. Upon this fundamental
error he afterwards acted. In the mean time, Law commenced the famous
project which has handed his name down to posterity. He proposed to
the Regent, who could refuse him nothing, to establish a company,
that should have the exclusive privilege of trading to the great river
Mississippi and the province of Louisiana, on its western bank. The
country was supposed to abound in the precious metals, and the company,
supported by the profits of their exclusive commerce, were to be the
sole farmers of the taxes, and sole coiners of money. Letters patent
were issued, incorporating the company, in August 1717. The capital was
divided into two hundred thousand shares of five hundred livres each,
the whole of which might be paid in billets d'etat, at their nominal
value, although worth no more than 160 livres in the market.
It was now that the frenzy of speculating began to seize upon the
nation. Law's bank had effected so much good, that any promises for the
future which he thought proper to make were readily believed. The Regent
every day conferred new privileges upon the fortunate projector. The
bank obtained the monopoly of the sale of tobacco; the sole right of
refinage of gold and silver, and was finally erected into the Royal Bank
of France. Amid the intoxication of success, both Law and the Regent
forgot the maxim so loudly proclaimed by the former, that a banker
deserved death who made issues of paper without the necessary funds to
provide for them. As soon as the bank, from a private, became a public
institution, the Regent caused a fabrication of notes to the amount of
one thousand millions of livres. This was the first departure from sound
principles, and one for which Law is not justly blameable. While
the affairs of the bank were under his control, the issues had never
exceeded sixty millions. Whether Law opposed the inordinate increase
is not known, but as it took place as soon as the bank was made a royal
establishment, it is but fair to lay the blame of the change of system
upon the Regent.
Law found that he lived under a despotic government, but he was not yet
aware of the pernicious influence which such a government could exercise
upon so delicate a framework as that of credit. He discovered it
afterwards to his cost, but in the mean time suffered himself to be
impelled by the Regent into courses which his own reason must have
disapproved. With a weakness most culpable, he lent his aid in
inundating the country with paper money, which, based upon no solid
foundation, was sure to fall, sooner or later. The extraordinary present
fortune dazzled his eyes, and prevented him from seeing the evil day
that would burst over his head, when once, from any cause or other, the
alarm was sounded. The Parliament were from the first jealous of his
influence as a foreigner, and had, besides, their misgivings as to
the safety of his projects. As his influence extended, their animosity
increased. D'Aguesseau, the Chancellor, was unceremoniously dismissed by
the Regent for his opposition to the vast increase of paper money, and
the constant depreciation of the gold and silver coin of the realm.
This only served to augment the enmity of the Parliament, and when
D'Argenson, a man devoted to the interests of the Regent, was appointed
to the vacant chancellorship, and made at the same time minister of
finance, they became more violent than ever. The first measure of the
new minister caused a further depreciation of the coin. In order to
extinguish the billets d'etat, it was ordered that persons bringing
to the mint four thousand livres in specie and one thousand livres in
billets d'etat, should receive back coin to the amount of five thousand
livres. D'Argenson plumed himself mightily upon thus creating five
thousand new and smaller livres out of the four thousand old and larger
ones, being too ignorant of the true principles of trade and credit to
be aware of the immense injury he was inflicting upon both.
The Parliament saw at once the impolicy and danger of such a system,
and made repeated remonstrances to the Regent. The latter refused to
entertain their petitions, when the Parliament, by a bold, and very
unusual stretch of authority, commanded that no money should be received
in payment but that of the old standard. The Regent summoned a lit de
justice, and annulled the decree. The Parliament resisted, and issued
another. Again the Regent exercised his privilege, and annulled it,
till the Parliament, stung to fiercer opposition, passed another decree,
dated August 12th, 1718, by which they forbade the bank of Law to have
any concern, either direct or indirect, in the administration of the
revenue; and prohibited all foreigners, under heavy penalties, from
interfering, either in their own names, or in that of others, in the
management of the finances of the state. The Parliament considered Law
to be the author of all the evil, and some of the counsellors, in the
virulence of their enmity, proposed that he should be brought to trial,
and, if found guilty, be hung at the gates of the Palais de Justice.
Law, in great alarm, fled to the Palais Royal, and threw himself on the
protection of the Regent, praying that measures might be taken to reduce
the Parliament to obedience. The Regent had nothing so much at heart,
both on that account and because of the disputes that had arisen
relative to the legitimation of the Duke of Maine and the Count of
Thoulouse, the sons of the late King. The Parliament was ultimately
overawed by the arrest of their president and two of the counsellors,
who were sent to distant prisons.
Thus the first cloud upon Law's prospects blew over: freed from
apprehension of personal danger, he devoted his attention to his famous
Mississippi project, the shares of which were rapidly rising, in spite
of the Parliament. At the commencement of the year 1719 an edict was
published, granting to the Mississippi Company the exclusive privilege
of trading to the East Indies, China, and the South Seas, and to all the
possessions of the French East India Company, established by Colbert.
The Company, in consequence of this great increase of their business,
assumed, as more appropriate, the title of Company of the Indies, and
created fifty thousand new shares. The prospects now held out by Law
were most magnificent. He promised a yearly dividend of two hundred
livres upon each share of five hundred, which, as the shares were
paid for in billets d'etat, at their nominal value, but worth only 100
livres, was at the rate of about 120 per cent. profit.
The public enthusiasm, which had been so long rising, could not resist
a vision so splendid. At least three hundred thousand applications were
made for the fifty thousand new shares, and Law's house in the Rue de
Quincampoix was beset from morning to night by the eager applicants.
As it was impossible to satisfy them all, it was several weeks before a
list of the fortunate new stockholders could be made out, during which
time the public impatience rose to a pitch of frenzy. Dukes, marquises,
counts, with their duchesses, marchionesses, and countesses, waited
in the streets for hours every day before Mr. Law's door to know the
result. At last, to avoid the jostling of the plebeian crowd, which,
to the number of thousands, filled the whole thoroughfare, they took
apartments in the adjoining houses, that they might be continually near
the temple whence the new Plutus was diffusing wealth. Every day the
value of the old shares increased, and the fresh applications, induced
by the golden dreams of the whole nation, became so numerous that it
was deemed advisable to create no less than three hundred thousand new
shares, at five thousand livres each, in order that the Regent might
take advantage of the popular enthusiasm to pay off the national debt.
For this purpose, the sum of fifteen hundred millions of livres was
necessary. Such was the eagerness of the nation, that thrice the sum
would have been subscribed if the government had authorised it.
Law was now at the zenith of his prosperity, and the people were rapidly
approaching the zenith of their infatuation. The highest and the lowest
classes were alike filled with a vision of boundless wealth. There was
not a person of note among the aristocracy, with the exception of the
Duke of St. Simon and Marshal Villars, who was not engaged in buying
or selling stock. People of every age and sex, and condition in life,
speculated in the rise and fall of the Mississippi bonds. The Rue de
Quincampoix was the grand resort of the jobbers, and it being a narrow,
inconvenient street, accidents continually occurred in it, from the
tremendous pressure of the crowd. Houses in it, worth, in ordinary
times, a thousand livres of yearly rent, yielded as much as twelve or
sixteen thousand. A cobbler, who had a stall in it, gained about two
hundred livres a day by letting it out, and furnishing writing materials
to brokers and their clients. The story goes, that a hump-backed man who
stood in the street gained considerable sums by lending his hump as a
writing-desk to the eager speculators! The great concourse of persons
who assembled to do business brought a still greater concourse of
spectators. These again drew all the thieves and immoral characters of
Paris to the spot, and constant riots and disturbances took place. At
nightfall, it was often found necessary to send a troop of soldiers to
clear the street.
Law, finding the inconvenience of his residence, removed to the Place
Vendome, whither the crowd of agioteurs followed him. That spacious
square soon became as thronged as the Rue de Quincampoix: from morning
to night it presented the appearance of a fair. Booths and tents were
erected for the transaction of business and the sale of refreshments,
and gamblers with their roulette tables stationed themselves in the very
middle of the place, and reaped a golden, or rather a paper, harvest
from the throng. The Boulevards and public gardens were forsaken;
parties of pleasure took their walks in preference in the Place Vendome,
which became the fashionable lounge of the idle, as well as the general
rendezvous of the busy. The noise was so great all day, that the
Chancellor, whose court was situated in the square, complained to the
Regent and the municipality, that he could not hear the advocates. Law,
when applied to, expressed his willingness to aid in the removal of the
nuisance, and for this purpose entered into a treaty with the Prince de
Carignan for the Hotel de Soissons, which had a garden of several acres
in the rear. A bargain was concluded, by which Law became the purchaser
of the hotel, at an enormous price, the Prince reserving to himself the
magnificent gardens as a new source of profit. They contained some fine
statues and several fountains, and were altogether laid out with much
taste. As soon as Law was installed in his new abode, an edict was
published, forbidding all persons to buy or sell stock anywhere but
in the gardens of the Hotel de Soissons. In the midst among the trees,
about five hundred small tents and pavilions were erected, for the
convenience of the stock-jobbers. Their various colours, the gay ribands
and banners which floated from them, the busy crowds which passed
continually in and out--the incessant hum of voices, the noise,
the music, and the strange mixture of business and pleasure on the
countenances of the throng, all combined to give the place an air of
enchantment that quite enraptured the Parisians. The Prince de Carignan
made enormous profits while the delusion lasted. Each tent was let at
the rate of five hundred livres a month; and, as there were at least
five hundred of them, his monthly revenue from this source alone must
have amounted to 250,000 livres, or upwards of 10,000 pounds sterling.
The honest old soldier, Marshal Villars, was so vexed to see the folly
which had smitten his countrymen, that he never could speak with
temper on the subject. Passing one day through the Place Vendome in his
carriage, the choleric gentleman was so annoyed at the infatuation of
the people, that he abruptly ordered his coachman to stop, and, putting
his head out of the carriage window, harangued them for full half an
hour on their "disgusting avarice." This was not a very wise proceeding
on his part. Hisses and shouts of laughter resounded from every side,
and jokes without number were aimed at him. There being at last strong
symptoms that something more tangible was flying through the air in
the direction of his head, Marshal was glad to drive on. He never again
repeated the experiment.
Two sober, quiet, and philosophic men of letters, M. de la Motte and the
Abbe Terrason, congratulated each other, that they, at least, were free
from this strange infatuation. A few days afterwards, as the worthy
Abbe was coming out of the Hotel de Soissons, whither he had gone to buy
shares in the Mississippi, whom should he see but his friend La Motte
entering for the same purpose. "Ha!" said the Abbe, smiling, "is that
you?" "Yes," said La Motte, pushing past him as fast as he was able;
"and can that be you?" The next time the two scholars met, they talked
of philosophy, of science, and of religion, but neither had courage for
a long time to breathe one syllable about the Mississippi. At last, when
it was mentioned, they agreed that a man ought never to swear against
his doing any one thing, and that there was no sort of extravagance of
which even a wise man was not capable.
During this time, Law, the new Plutus, had become all at once the most
important personage of the state. The ante-chambers of the Regent were
forsaken by the courtiers. Peers, judges, and bishops thronged to the
Hotel de Soissons; officers of the army and navy, ladies of title and
fashion, and every one to whom hereditary rank or public employ gave a
claim to precedence, were to be found waiting in his ante-chambers to
beg for a portion of his India stock. Law was so pestered that he was
unable to see one-tenth part of the applicants, and every manoeuvre that
ingenuity could suggest was employed to gain access to him. Peers, whose
dignity would have been outraged if the Regent had made them wait half
an hour for an interview, were content to wait six hours for the chance
of seeing Monsieur Law. Enormous fees were paid to his servants, if
they would merely announce their names. Ladies of rank employed the
blandishments of their smiles for the same object; but many of them came
day after day for a fortnight before they could obtain an audience. When
Law accepted an invitation, he was sometimes so surrounded by ladies,
all asking to have their names put down in his lists as shareholders in
the new stock, that, in spite of his well-known and habitual gallantry,
he was obliged to tear himself away par force. The most ludicrous
stratagems were employed to have an opportunity of speaking to him. One
lady, who had striven in vain during several days, gave up in despair
all attempts to see him at his own house, but ordered her coachman to
keep a strict watch whenever she was out in her carriage, and if he saw
Mr. Law coming, to drive against a post, and upset her. The coachman
promised obedience, and for three days the lady was driven incessantly
through the town, praying inwardly for the opportunity to be overturned.
At last she espied Mr. Law, and, pulling the string, called out to the
coachman, "Upset us now! for God's sake, upset us now!" The coachman
drove against a post, the lady screamed, the coach was overturned,
and Law, who had seen the accident, hastened to the spot to render
assistance. The cunning dame was led into the Hotel de Soissons, where
she soon thought it advisable to recover from her fright, and, after
apologizing to Mr. Law, confessed her stratagem. Law smiled, and entered
the lady in his books as the purchaser of a quantity of India stock.
Another story is told of a Madame de Boucha, who, knowing that Mr. Law
was at dinner at a certain house, proceeded thither in her carriage, and
gave the alarm of fire. The company started from table, and Law among
the rest; but, seeing one lady making all haste into the house towards
him, while everybody else was scampering away, he suspected the trick,
and ran off in another direction.
Many other anecdotes are related, which even, though they may be a
little exaggerated, are nevertheless worth preserving, as showing the
spirit of that singular period. [The curious reader may find an anecdote
of the eagerness of the French ladies to retain Law in their company,
which will make him blush or smile according as he happens to be very
modest or the reverse. It is related in the Letters of Madame Charlotte
Elizabeth de Baviere, Duchess of Orleans, vol. ii. p. 274.] The Regent
was one day mentioning, in the presence of D'Argenson, the Abbe Dubois,
and some other persons, that he was desirous of deputing some lady, of
the rank at least of a Duchess, to attend upon his daughter at Modena;
"but," added he, "I do not exactly know where to find one." "No!"
replied one, in affected surprise; "I can tell you where to find every
Duchess in France:--you have only to go to Mr. Law's; you will see them
every one in his ante-chamber."
M. de Chirac, a celebrated physician, had bought stock at an unlucky
period, and was very anxious to sell out. Stock, however continued to
fall for two or three days, much to his alarm. His mind was filled with
the subject, when he was suddenly called upon to attend a lady, who
imagined herself unwell. He arrived, was shown up stairs, and felt the
lady's pulse. "It falls! it falls! good God! it falls continually!" said
he, musingly, while the lady looked up in his face, all anxiety for his
opinion. "Oh! M. de Chirac," said she, starting to her feet, and ringing
the bell for assistance; "I am dying! I am dying! it falls! it falls! it
falls!" "What falls?" inquired the doctor, in amazement. "My pulse! my
pulse!" said the lady; "I must be dying." "Calm your apprehensions, my
dear Madam," said M. de Chirac; "I was speaking of the stocks. The truth
is, I have been a great loser, and my mind is so disturbed, I hardly
know what I have been saying."