About the commencement of the new year, 1720, the system of Law
approached its end. If he had been content with his bank his bank within
wise and proper limits--the money of the realm might have been doubled,
and an extreme facility afforded to commerce and to private enterprise,
because, the establishment always being prepared to meet its liabilities,
the notes it issued would have been as good as ready money, and sometimes
even preferable, on account of the facility of transport. It must be
admitted, however, as I declared to M. le Duc d'Orleans in his cabinet,
and as I openly said in the Council of the Regency when the bank passed
there, that good as this establishment might be in itself, it could only
be so in a republic, or in a monarchy, like that of England, where the
finances are absolutely governed by those who furnish them, and who
simply furnish as much or as little as they please; but in a trivial,
changing, and more than absolute state like France solidity necessarily
is wanting, consequently confidence (at least of a discreet and proper
kind): since a king, and under his name, a mistress, a minister,
favourites; still more, extreme necessities, such as the deceased King
experienced in the years 1707-8-9 and 10,--a hundred things, in fact,
could overthrow the bank, the allurements of which were, at once, too
great and too easy. But to add to the reality of this bank, the chimera
of the Mississippi, with its shares, its special jargon, its science (a
continual juggle for drawing money from one person to give it to
another), was to almost guarantee that these shares should at last end in
smoke (since we had neither mines, nor quarries of the philosopher's
stone), and that the few would be enriched at the expense of the many, as
in fact happened.
What hastened the fall of the bank, and of the system, was the
inconceivable prodigality of M. le Duc d'Orleans, who, without bounds,
and worse still, if it can be, without choice, could not resist the
importunities even of those whom he knew, beyond all doubt, to have been
the most opposed to him, and who were completely despicable, but gave
with open hands; and more frequently allowed money to be drawn from him
by people who laughed at him, and who were grateful only to their
effrontery. People with difficulty believe what they have seen; and
posterity will consider as a fable what we ourselves look upon as a
dream. At last, so much was given to a greedy and prodigal nation,
always covetous and in want on account of its luxury, its disorder, and
its confusion of ranks, that paper became scarce, and the mills could not
furnish enough.
It may be imagined by this, what abuse had been made of a bank,
established as a resource always ready, but which could not exist as such
without being always delicately adjusted; and above all, kept in a state
to meet the obligations it had contracted. I obtained information on
this point from Law, when he came to me on Tuesday mornings; for a long
time he played with me before admitting his embarrassments, and
complained modestly and timidly, that the Regent was ruining everything
by his extravagance. I knew from outsiders more than he thought, and it
was this that induced me to press him upon his balance-sheet. In
admitting to me, at last, although faintly, what he could no longer hide,
he assured me he should not be wanting in resources provided M. le Duc
d'Orleans left him free. That did not persuade me. Soon after, the
notes began to lose favour; then to fall into discredit, and the
discredit to become public. Then came the necessity to sustain them by
force, since they could no longer be sustained by industry; and the
moment force showed itself every one felt that all was over. Coercive
authority was resorted to; the use of gold, silver, and jewels was
suppressed (I speak of coined money); it was pretended that since the
time of Abraham,--Abraham, who paid ready money for the sepulchre of
Sarah,--all the civilised nations in the world had been in the greatest
error and under the grossest delusion, respecting money and the metals it
is made of; that paper alone was useful and necessary; that we could not
do greater harm to our neighbours--jealous of our greatness and of our
advantages--than to send to them all our money and all our jewels; and
this idea was in no way concealed, for the Indian Company was allowed to
visit every house, even Royal houses, confiscate all the louis d'or, and
the coins it could find there; and to leave only pieces of twenty sous
and under (to the amount of not more than 200 francs), for the odd money
of bills, and in order to purchase necessary provisions of a minor kind,
with prohibitions, strengthened by heavy punishment, against keeping
more; so that everybody was obliged to take all the ready money he
possessed to the bank, for fear of its being discovered by a valet. But
nobody, as may be imagined, was persuaded of the justice of the power
accorded to the Company, and accordingly authority was more and more
exerted; all private houses were searched, informations were laid against
people in order that no money might be kept back, or if it were, that the
guilty parties might be severely punished.
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 ordonnances 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.
This violence was, however, too excessive, and in every respect too
indefensible to last long; new paper and new juggling tricks were of
necessity resorted to; the latter were known to be such--people felt them
to be such--but they submitted to them rather than not have twenty crowns
in safety in their houses; and a greater violence made people suffer the
smaller. Hence so many projects, so many different faces in finance, and
all tending to establish one issue of paper upon another; that is to say,
always causing loss to the holders of the different paper (everybody
being obliged to hold it), and the universal multitude. This is what
occupied all the rest of the government, and of the life of M. le Duc
d'Orleans; which drove Law out of the realm; which increased six-fold the
price of all merchandise, all food even the commonest; which ruinously
augmented every kind of wages, and ruined public and private commerce;
which gave, at the expense of the public, sudden riches to a few noblemen
who dissipated it, and were all the poorer in a short time; which enabled
many financiers' clerks, and the lowest dregs of the people, profiting by
the general confusion, to take advantage of the Mississippi, and make
enormous fortunes; which occupied the government several years after the
death of M. le Duc d'Orleans; and which, to conclude, France never will
recover from, although it may be true that the value of land is
considerably augmented. As a last affliction, the all-powerful,
especially the princes and princesses of the blood, who had been mixed
up, in the Mississippi, and who had used all their authority to escape
from it without loss, re-established it upon what they called the Great
Western Company, which with the same juggles and exclusive trade with the
Indies, is completing the annihilation of the trade of the realm,
sacrificed to the enormous interest of a small number of private
individuals, whose hatred and vengeance the government has not dared to
draw upon itself by attacking their delicate privileges.
Several violent executions, and confiscations of considerable sums found
in the houses searched, took place. A certain Adine, employed at the
bank, had 10,000 crowns confiscated, was fined 10,000 francs, and lost
his appointment. Many people hid their money with so much secrecy, that,
dying without being able to say where they had put it, these little
treasures remained buried and lost to the heirs.
In the midst of the embarrassments of the finances, and in spite of them,
M. le Duc d'Orleans continued his prodigal gifts. He attached pensions
of 6000 livres and 4000 livres to the grades of lieutenant-general and
camp-marshal. He gave a pension of 20,000 livres to old Montauban; one
of 6000 livres to M. de Montauban (younger brother of the Prince de
Guemene); and one of 6000 livres to the Duchesse de Brissac. To several
other people he gave pensions of 4000 livres; to eight or ten others,
3000 or 2000 livres. I obtained one of 8000 livres for Madame Marechal
de Lorges; and one of 6000 livres was given to the Marechal de Chamilly,
whose affairs were much deranged by the Mississippi. M. de Soubise and
the Marquis Noailles had each upwards of 200,000 livres. Even Saint-
Genies, just out of the Bastille, and banished to Beauvais, had a pension
of 1000. Everybody in truth wanted an augmentation of income, on account
of the extreme high price to which the commonest, almost necessary things
had risen, and even all other things; which, although at last diminshed
by degrees, remain to this day much dearer than they were before the
Mississippi.
The pensions being given away, M. le Duc d'Orleans began to think how he
could reduce the public expenditure. Persuaded by those in whose
financial knowledge he had most confidence, he resolved to reduce to two
per cent. the interest upon all the funds. This much relieved those who
paid, but terribly cut down the income of those who received, that is to
say, the creditors of the state, who had lent their money at five per
cent., according to the loan--and, public faith and usage, and who had
hitherto peacefully enjoyed that interest. M. le Duc d'Orleans assembled
at the Palais Royal several financiers of different rank, and resolved
with them to pass this edict. It made much stir among the Parliament
men, who refused to register it. But M. le Duc d'Orleans would not
change his determination, and maintained his decree in spite of them.
By dint of turning and turning around the Mississippi, not to say of
juggling with it, the desire came to establish, according to the example
of the English, colonies in the vast countries beyond the seas. In order
to people these colonies, persons without means of livelihood, sturdy
beggars, female and male, and a quantity of public creatures were carried
off. If this had been executed with discretion and discernment, with the
necessary measures and precautions, it would have ensured the object
proposed, and relieved Paris and the provinces of a heavy, useless, and
often dangerous burthen; but in Paris and elsewhere so much violence, and
even more roguery, were mixed up with it, that great murmuring was
excited. Not the slightest care had been taken to provide for the
subsistence of so many unfortunate people, either while in the place they
were to embark from, or while on the road to reach it; by night they were
shut up, with nothing to eat, in barns, or in the dry ditches of the
towns they stopped in, all means of egress being forbidden them. They
uttered cries which excited pity and indignation; but the alms collected
for them not being sufficient, still less the little their conductors
gave them, they everywhere died in frightful numbers.
[Illustration: Mississippi Colonization--Painted by C. E. Delort--1176]
This inhumanity, joined to the barbarity of the conductors, to violence
of a kind unknown until this, and to the rascality of carrying off people
who were not of the prescribed quality, but whom others thus got rid of
by whispering a word in the ear of the conductors and greasing their
palms; all these things, I say, caused so much stir, so much excitement,
that the system, it was found, could not be kept up. Some troops had
been embarked, and during the voyage were not treated much better than
the others. The persons already collected were set at liberty, allowed
to do what they pleased, and no more were seized. Law, regarded as the
author of these seizures, became much detested, and M. le Duc d'Orleans
repented having ever fallen in with the scheme.
The 22nd of May of this year, 1720, became celebrated by the publication
of a decree of the Council of State, concerning the shares of the Company
of the Indies (the same as that known under the name of Mississippi) and
the notes of Law's bank. This decree diminished by degrees, and from
month to month, the value of the shares and the notes, so that, by the
end of the year, that value would have been reduced one-half.
This, in the language of finance and of bankruptcy, was to turn tail with
a vengeance: and its effect, while remedying nothing, was to make people
believe that things were in a worse state than was actually the case.
Argenson, who, as we have seen, had been turned out of the finances to
make room for Law, was generally accused of suggesting this decree out of
malice, already foreseeing all the evils that must arise from it. The
uproar was general and frightful. There was not a rich person who did
not believe himself lost without resource; not a poor one who did not see
himself reduced to beggary. The Parliament, so opposed to the new money
system, did not let slip this fine opportunity. It rendered itself the
protector of the public by refusing to register the decree, and by
promptly uttering the strongest remonstrance against it. The public even
believed that to the Parliament was due the sudden revocation of the
edict, which, however, was simply caused by the universal complaining,
and the tardy discovery of the fault committed in passing it. The little
confidence in Law remaining was now radically extinguished; not an atom
of it could ever be set afloat again. Seditious writings and analytical
and reasonable pamphlets rained on all sides, and the consternation was
general.
The Parliament assembled on Monday, the 27th of May, in the morning, and
named certain of its members to go to M. le Duc d'Orleans, with
remonstrances against the decree. About noon of the same day, M. le Duc
d'Orleans sent La Vrilliere to say to the Parliament that he revoked that
decree, and that the notes would remain as before. La Vrilliere, finding
that the Parliament had adjourned, went to the Chief-President, to say
with what he was charged. After dinner the Parliamentary deputies came
to the Palais Royal, where they were well received; M. le Duc d'Orleans
confirmed what they had already heard from La Vrilliere, and said to them
that he would re-establish the funds of the Hotel de Ville at two-and-a-
half percent. The deputies expected that in justice and in goodness he
ought to raise them to at least three per cent. M. le Duc d'Orleans
answered, that he should like not only to raise them to three, but to
four, nay, five per cent.; but that the state of affairs would not permit
him to go beyond two-and-a-half. On the next day was published the
counter-decree, which placed the shares and actions as they were before
the 22nd of May. The decree of that date was therefore revoked in six
days, after having caused such a strange effect.
On Wednesday, the 29th, a pretty little comedy was played. Le Blanc,
Secretary of State, went to Law, told him that M. le Duc d'Orleans
discharged him from his office as comptroller-general of the finances,
thanked him for the attention he had given to it, and announced that as
many people in Paris did not like him, a meritorious officer should keep
guard in his house to prevent any accident that might happen to him. At
the same time, Benzualde, major of the regiment of Swiss guards, arrived
with sixteen of his men to remain night and day in Law's house.
The Scotchman did not in the least expect this dismissal or this guard,
but he appeared very tranquil respecting both, and maintained his usual
coolness. The next day he was taken by the Duc de la Force to the Palais
Royal. Then comedy number two was played. M. le Duc d'Orleans refused
to see the financier, who went away without an interview. On the day
after, however, Law was admitted by the back stairs, closeted with the
Regent, and was treated by him as well as ever. The comedies were over.
On Sunday, the 2nd of June, Benzualde and his Swiss withdrew from Law's
house. Stock-jobbing was banished at the same time from the Rue
Quincampoix, and established in the Place Vendome. In this latter place
there was more room for it. The passers-by were not incommoded. Yet
some people did not find it as convenient as the other. At this time the
King gave up to the bank one hundred million of shares he had in it.
On the 5th July, a decree of the Council was issued, prohibiting people
from possessing jewels, from keeping them locked up, or from selling them
to foreigners. It may be imagined what a commotion ensued. This decree
was grafted upon a number of others, the object of all, too visibly,
being to seize upon all coin, in favour of the discredited paper, in
which nobody could any longer have the slightest confidence. In vain M.
le Duc d'Orleans, M. le Duc, and his mother, tried to persuade others, by
getting rid of their immense stores of jewels, that is to say, by sending
them abroad on a journey--nothing more: not a person was duped by this
example; not a person omitted to conceal his jewels very carefully: a
thing much more easy to accomplish than the concealment of gold or silver
coin, on account of the smaller value of precious stones. This jewellery
eclipse was not of long duration.