[Illustration: THE MISSISSIPPI SCHEME: GARDENS OF THE HOTEL DE
SOISSONS, 1720.]
MEMOIRS
OF
EXTRAORDINARY POPULAR DELUSIONS.
VOLUME I.
[Illustration: THE BUBBLERS' ARMS--PROSPERITY.]
LONDON:
OFFICE OF THE NATIONAL ILLUSTRATED LIBRARY,
227 STRAND.
1852.
MEMOIRS
OF
EXTRAORDINARY POPULAR DELUSIONS
AND THE
MADNESS OF CROWDS.
BY CHARLES MACKAY, LL.D.
AUTHOR OF "EGERIA," "THE SALAMANDRINE," ETC.
ILLUSTRATED WITH NUMEROUS ENGRAVINGS.
VOL. I.
N'en déplaise à ces fous nommés sages de Grèce,
En ce monde il n'est point de parfaite sagesse;
Tous les hommes sont fous, et malgré tous leurs soîns
Ne diffèrent entre eux que du plus ou du moins.
BOILEAU.
LONDON:
OFFICE OF THE NATIONAL ILLUSTRATED LIBRARY,
227 STRAND.
1852.
LONDON:
PRINTED BY ROBSON, LEVEY, AND FRANKLYN,
Great New Street, Fetter Lane.
CONTENTS.
THE MISSISSIPPI SCHEME.
John Law; his birth and youthful career--Duel between Law and
Wilson--Law's escape from the King's Bench--The "Land-bank"--Law's
gambling propensities on the continent, and acquaintance with the Duke
of Orleans--State of France after the reign of Louis XIV.--Paper money
instituted in that country by Law--Enthusiasm of the French people at
the Mississippi Scheme--Marshal Villars--Stratagems employed and
bribes given for an interview with Law--Great fluctuations in
Mississippi stock--Dreadful murders--Law created comptroller-general
of finances--Great sale for all kinds of ornaments in Paris--Financial
difficulties commence--Men sent out to work the mines on the
Mississippi, as a blind--Payment stopped at the bank--Law dismissed
from the ministry--Payments made in specie--Law and the Regent
satirised in song--Dreadful crisis of the Mississippi Scheme--Law,
almost a ruined man, flies to Venice--Death of the Regent--Law obliged
to resort again to gambling--His death at Venice
THE SOUTH-SEA BUBBLE.
Originated by Harley Earl of Oxford--Exchange Alley a scene of great
excitement--Mr. Walpole--Sir John Blunt--Great demand for
shares--Innumerable "Bubbles"--List of nefarious projects and
bubbles--Great rise in South-sea stock--Sudden fall--General meeting
of the directors--Fearful climax of the South-sea expedition--Its
effects on society--Uproar in the House of Commons--Escape of
Knight--Apprehension of Sir John Blunt--Recapture of Knight at
Tirlemont--His second escape--Persons connected with the scheme
examined--Their respective punishments--Concluding remarks
THE TULIPOMANIA.
Conrad Gesner--Tulips brought from Vienna to England--Rage for the
tulip among the Dutch--Its great value--Curious anecdote of a sailor
and a tulip--Regular marts for tulips--Tulips employed as a means of
speculation--Great depreciation in their value--End of the mania
THE ALCHYMISTS.
Introductory remarks--Pretended antiquity of the
art--Geber--Alfarabi--Avicenna--Albertus Magnus--Thomas
Aquinas--Artephius--Alain de Lisle--Arnold de Villeneuve--Pietro
d'Apone--Raymond Lulli--Roger Bacon--Pope John XXII.--Jean de
Meung--Nicholas Flamel--George Ripley--Basil Valentine--Bernard of
Trèves--Trithemius--The Maréchal de Rays--Jacques Coeur--Inferior
adepts--Progress of the infatuation during the sixteenth and
seventeenth centuries--Augurello--Cornelius
Agrippa--Paracelsus--George Agricola--Denys Zachaire--Dr. Dee and
Edward Kelly--The Cosmopolite--Sendivogius--The Rosicrucians--Michael
Mayer--Robert Fludd--Jacob Böhmen--John Heydon--Joseph Francis
Borri--Alchymical writers of the seventeenth century--Delisle--Albert
Aluys--Count de St. Germain--Cagliostro--Present state of the science
MODERN PROPHECIES.
Terror of the approaching day of judgment--A comet the signal of that
day--The prophecy of Whiston--The people of Leeds greatly alarmed at
that event--The plague in Milan--Fortune-tellers and
Astrologers--Prophecy concerning the overflow of the Thames--Mother
Shipton--Merlin--Heywood--Peter of Pontefract--Robert
Nixon--Almanac-makers
FORTUNE-TELLING.
Presumption and weakness of man--Union of Fortune-tellers and
Alchymists--Judicial astrology encouraged in England from the time of
Elizabeth to William and Mary--Lilly the astrologer consulted by the
House of Commons as to the cause of the Fire of London--Encouragement
of the art in France and Germany--Nostradamus--Basil of
Florence--Antiochus Tibertus--Kepler--Necromancy--Roger Bacon,
Albertus Magnus, Arnold Villeneuve--Geomancy--Augury--Divination: list
of various species of divination--Oneiro-criticism (interpretation of
dreams)--Omens
THE MAGNETISERS.
The influence of imagination in curing diseases--Mineral
magnetisers--Paracelsus--Kircher the Jesuit--Sebastian Wirdig--William
Maxwell--The Convulsionaries of St. Medard--Father Hell--Mesmer, the
founder of Animal Magnetism--D'Eslon, his disciple--M. de
Puysegur--Dr. Mainauduc's success in London--Holloway, Loutherbourg,
Mary Pratt, &c.--Perkins's "Metallic Tractors"--Decline of the science
INFLUENCE OF POLITICS AND RELIGION ON THE HAIR AND BEARD.
Early modes of wearing the hair and beard--Excommunication and
outlawry decreed against curls--Louis VII.'s submission thereto the
cause of the long wars between England and France--Charles V. of Spain
and his courtiers--Peter the Great--His tax upon beards--Revival of
beards and moustaches after the French Revolution of 1830--The King of
Bavaria (1838) orders all civilians wearing moustaches to be arrested
and shaved--Examples from Bayeux tapestry
LIST OF ENGRAVINGS IN VOL. I.
Frontispiece--Gardens of the Hotel de Soissons. (From a print in Mr.
Hawkins' collection.)
Vignette--The Bubblers' Arms, Prosperity. (_Bubblers' Mirror, or
England's Folly_.)
John Law. (From a rare print by Leon Schenk. 1720)
The Regent D'Orleans
Old Palais Royal from the Garden. (From a scarce print, _circa_
1720)
Law's House; Rue de Quincampoix. (From Nodier's _Paris_)
Humpbacked Man hiring himself as a Table
Hôtel de Soissons. (From Nodier's _Paris_)
The Coach upset
Murder of a Broker by Count D'Horn
John Law as Atlas. (From _England under the House of Hanover_)
Caricature--Lucifer's new Row Barge
Procession of Miners for the Mississippi
The Chancellor D'Aguesseau
Caricature--Law in a Car drawn by Cocks
M. D'Argenson
Caricature--Neck or Nothing, or Downfall of the Mississippi Company
The South-Sea House. (From a print, _circa_ 1750)
Harley Earl of Oxford
Sir Robert Walpole
Cornhill. (Print, _circa_ 1720)
Stock-jobbing Card, or the Humours of Change Alley. 1720. (From the
_Bubblers' Medley_)
Caricature--People climbing the Tree of Fortune. (From the
_Bubblers' Medley_)
The Gateway to Merchant Tailors' Hall. (Gateway from old print)
Mr. Secretary Craggs
Caricature--Beggars on Horseback. (From the _Bubblers' Medley_)
Caricature--Britannia stript by a South-Sea Director
Caricature--The Brabant Screen. (Copied from a rare print of the time,
in the collection of E. Hawkins, Esq., F.S.A.)
Bonfires on Tower Hill
The Earl of Sunderland
Caricature--Emblematic Print of the South-Sea Scheme. (From a print by
Hogarth)
Caricature--Bubblers' Arms: Despair. (From _Bubblers' Mirror, or
England's Glory_)
Conrad Gesner
The Alchymist. (From print after Teniers)
Albertus Magnus
Arnold de Villeneuve
Raymond Lulli
House of Jacques Coeur at Bourges. (From _Sommerard's Album_)
Cornelius Agrippa
Paracelsus
Dr. Dee
Dr. Dee's Show-stone and Magic Crystal. (Originals in the possession
of Lord Londesborough and British Museum)
Innspruck. (From Nodier's _Paris_)
House of Cagliostro (Rue de Clery, No. 278), Paris
Mother Shipton's House
Henry Andrews, the original "Francis Moore, physician"
Nostradamus. (From the frontispiece to a collection of his Prophecies,
published at Amsterdam A.D. 1666)
Serlo clipping Henry I.'s hair
Peter the Great
Bayeux Tapestry
PREFACE.
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 civilised 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 them 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.
Some of the subjects introduced may be familiar to the reader; but the
Author hopes that sufficient novelty of detail will be found even in
these, to render them acceptable, while they could not be wholly
omitted in justice to the subject of which it was proposed to treat.
The memoirs of the South-Sea madness and the Mississippi delusion are
more complete and copious than are to be found elsewhere; and the same
may be said of the history of the Witch Mania, which contains an
account of its terrific progress in Germany, a part of the subject
which has been left comparatively untouched by Sir Walter Scott in his
_Letters on Demonology and Witchcraft_, the most important that
have yet appeared on this fearful but most interesting subject.
Popular delusions began so early, spread so widely, and have lasted so
long, that instead of two or three volumes, fifty would scarcely
suffice to detail their history. The present may be considered more of
a miscellany of delusions than a history--a chapter only in the great
and awful book of human folly which yet remains to be written, and
which Porson once jestingly said he would write in five hundred
volumes! Interspersed are sketches of some lighter matters,--amusing
instances of the imitativeness and wrongheadedness of the people,
rather than examples of folly and delusion.
Religious matters have been purposely excluded as incompatible with
the limits prescribed to the present work; a mere list of them would
alone be sufficient to occupy a volume.
[Illustration: JOHN LAW.]
MONEY MANIA.--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 Firth 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,[1] 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 pock-holes 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.
[1] Miss Elizabeth Villiers, afterwards Countess of Orkney.
In a short time afterwards he published a project for establishing what he
called a Land-bank,[2] 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.
[2] The wits of the day called it a _sand-bank_, which would
wreck the vessel of the state.
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 Vendôme, 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.
[Illustration: THE REGENT OF FRANCE.]
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 any thing to do
with him.[3]
[3] This anecdote, which is related in the correspondence of
Madame de Bavière, 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 any thing 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 expenses
of government 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
_maltôtiers_,[4] 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.
[4] From _maltôte_, an oppressive tax.
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 Bastille 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 galleys, 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 250,000l. 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
êtes trop tard, mon ami," replied the financier; "I have already made a
bargain with your wife for fifty thousand."[5]
[5] 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 _vero_ 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 ease 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 shew 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.[6]
[6] 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 He_las_!
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'état_. It was not thought
expedient to grant him the whole of the privileges prayed for in his
memorials until experience should have shewn 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'état_, 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'état_, at their nominal value, although worth no more
than a hundred and sixty 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 meantime 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'état_, it was ordered that
persons bringing to the mint four thousand livres in specie and one
thousand livres in _billets d'état_, 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 councillors, 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.
[Illustration: PALAIS ROYAL FROM THE GARDEN.]
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 councillors, 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'état_ at their nominal value, but worth only 100 livres, was at the rate
of about 120 per cent profit.
[Illustration: LAW'S HOUSE; RUE DE QUINCAMPOIX.]
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 hunchbacked 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.
[Illustration: THE HUNCHBACK.]
Law, finding the inconvenience of his residence, removed to the Place
Vendôme, 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 Vendôme, 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 Hôtel 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 any where but in the gardens of the Hôtel 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 10,000l. sterling.
[Illustration: HOTEL DE SOISSONS.]