plainly as graver matters, that the nation had awakened to a sense of its
folly, was one, a fac-simile of which is preserved in the _Mémoires de la
Régence_. It was thus described by its author: "The 'Goddess of Shares,'
in her triumphal car, driven by the Goddess of Folly. Those who are
drawing the car are impersonations of the Mississippi, with his wooden
leg, the South Sea, the Bank of England, the Company of the West of
Senegal, and of various assurances. Lest the car should not roll fast
enough, the agents of these companies, known by their long fox-tails and
their cunning looks, turn round the spokes of the wheels, upon which are
marked the names of the several stocks and their value, sometimes high and
sometimes low, according to the turns of the wheel. Upon the ground are
the merchandise, day-books and ledgers of legitimate commerce, crushed
under the chariot of Folly. Behind is an immense crowd of persons, of all
ages, sexes, and conditions, clamoring after Fortune, and fighting with
each other to get a portion of the shares which she distributes so
bountifully among them. In the clouds sits a demon, blowing bubbles of
soap, which are also the objects of the admiration and cupidity of the
crowd, who jump upon one another's backs to reach them ere they burst.
Right in the pathway of the car, and blocking up the passage, stands a
large building, with three doors, through one of which it must pass, if it
proceeds farther, and all the crowd along with it. Over the first door are
the words, '_Hôpital des Foux_,' over the second, '_Hôpital des Malades_,'
and over the third, '_Hôpital des Gueux_.'" Another caricature represented
Law sitting in a large cauldron, boiling over the flames of popular
madness, surrounded by an impetuous multitude, who were pouring all their
gold and silver into it, and receiving gladly in exchange the bits of
paper which he distributed among them by handfuls.
While this excitement lasted, Law took good care not to expose himself
unguarded in the streets. Shut up in the apartments of the regent, he was
secure from all attack; and whenever he ventured abroad, it was either
_incognito_, or in one of the royal carriages, with a powerful escort. An
amusing anecdote is recorded of the detestation in which he was held by
the people, and the ill-treatment he would have met had he fallen into
their hands. A gentleman of the name of Boursel was passing in his
carriage down the Rue St. Antoine, when his farther progress was stayed by
a hackney-coach that had blocked up the road. M. Boursel's servant called
impatiently to the hackney-coachman to get out of the way, and, on his
refusal, struck him a blow on the face. A crowd was soon drawn together by
the disturbance, and M. Boursel got out of the carriage to restore order.
The hackney-coachman, imagining that he had now another assailant,
bethought him of an expedient to rid himself of both, and called out as
loudly as he was able, "Help! help! murder! murder! Here are Law and his
servant going to kill me! Help! help!" At this cry the people came out of
their shops, armed with sticks and other weapons, while the mob gathered
stones to inflict summary vengeance upon the supposed financier. Happily
for M. Boursel and his servant, the door of the church of the Jesuits
stood wide open, and, seeing the fearful odds against them, they rushed
towards it with all speed. They reached the altar, pursued by the people,
and would have been ill-treated even there, if, finding the door open
leading to the sacristy, they had not sprang through, and closed it after
them. The mob were then persuaded to leave the church by the alarmed and
indignant priests, and finding M. Boursel's carriage still in the streets,
they vented their ill-will against it, and did it considerable damage.
The twenty-five millions secured on the municipal revenues of the city of
Paris, bearing so low an interest as two and a half per cent, were not
very popular among the large holders of Mississippi stock. The conversion
of the securities was, therefore, a work of considerable difficulty; for
many preferred to retain the falling paper of Law's Company, in the hope
that a favourable turn might take place. On the 15th of August, with a
view to hasten the conversion, an edict was passed, declaring that all
notes for sums between one thousand and ten thousand livres, should not
pass current, except for the purchase of annuities and bank accounts, or
for the payment of instalments still due on the shares of the company.
In October following another edict was passed, depriving these notes of
all value whatever after the month of November next ensuing. The
management of the mint, the farming of the revenue, and all the other
advantages and privileges of the India, or Mississippi Company, were taken
from them, and they were reduced to a mere private company. This was the
death-blow to the whole system, which had now got into the hands of its
enemies. Law had lost all influence in the Council of Finance, and the
company, being despoiled of its immunities, could no longer hold out the
shadow of a prospect of being able to fulfil its engagements. All those
suspected of illegal profits at the time the public delusion was at its
height, were sought out and amerced in heavy fines. It was previously
ordered that a list of the original proprietors should be made out, and
that such persons as still retained their shares should place them in
deposit with the company, and that those who had neglected to complete the
shares for which they had put down their names, should now purchase them
of the company, at the rate of 13,500 livres for each share of 500 livres.
Rather than submit to pay this enormous sum for stock which was actually
at a discount, the shareholders packed up all their portable effects, and
endeavoured to find a refuge in foreign countries. Orders were immediately
issued to the authorities at the ports and frontiers, to apprehend all
travellers who sought to leave the kingdom, and keep them in custody,
until it was ascertained whether they had any plate or jewellery with
them, or were concerned in the late stock-jobbing. Against such few as
escaped, the punishment of death was recorded, while the most arbitrary
proceedings were instituted against those who remained.
Law himself, in a moment of despair, determined to leave a country where
his life was no longer secure. He at first only demanded permission to
retire from Paris to one of his country-seats--a permission which the
regent cheerfully granted. The latter was much affected at the unhappy
turn affairs had taken, but his faith continued unmoved in the truth and
efficacy of Law's financial system. His eyes were opened to his own
errors; and during the few remaining years of his life he constantly
longed for an opportunity of again establishing the system upon a securer
basis. At Law's last interview with the prince, he is reported to have
said,--"I confess that I have committed many faults. I committed them
because I am a man, and all men are liable to error; but I declare to you
most solemnly that none of them proceeded from wicked or dishonest
motives, and that nothing of the kind will be found in the whole course of
my conduct."
[Illustration: LAW IN A CAR DRAWN BY COCKS.[14]]
[14] Law in a car drawn by cocks; from _Het groote Tofereel der
Dwaasheid_.
Two or three days after his departure the regent sent him a very kind
letter, permitting him to leave the kingdom whenever he pleased, and
stating that he had ordered his passports to be made ready. He at the same
time offered him any sum of money he might require. Law respectfully
declined the money, and set out for Brussels in a post-chaise belonging to
Madame de Prie, the mistress of the Duke of Bourbon, escorted by six
horse-guards. From thence he proceeded to Venice, where he remained for
some months, the object of the greatest curiosity to the people, who
believed him to be the possessor of enormous wealth. No opinion, however,
could be more erroneous. With more generosity than could have been
expected from a man who during the greatest part of his life had been a
professed gambler, he had refused to enrich himself at the expense of a
ruined nation. During the height of the popular frenzy for Mississippi
stock, he had never doubted of the final success of his projects in making
France the richest and most powerful nation of Europe. He invested all his
gains in the purchase of landed property in France--a sure proof of his
own belief in the stability of his schemes. He had hoarded no plate or
jewellery, and sent no money, like the dishonest jobbers, to foreign
countries. His all, with the exception of one diamond, worth about five or
six thousand pounds sterling, was invested in the French soil; and when he
left that country, he left it almost a beggar. This fact alone ought to
rescue his memory from the charge of knavery, so often and so unjustly
brought against him.
As soon as his departure was known, all his estates and his valuable
library were confiscated. Among the rest, an annuity of 200,000 livres
(8000l. sterling) on the lives of his wife and children, which had been
purchased for five millions of livres, was forfeited, notwithstanding that
a special edict, drawn up for the purpose in the days of his prosperity,
had expressly declared that it should never be confiscated for any cause
whatever. Great discontent existed among the people that Law had been
suffered to escape. The mob and the parliament would have been pleased to
have seen him hanged. The few who had not suffered by the commercial
revolution rejoiced that the _quack_ had left the country; but all those
(and they were by far the most numerous class) whose fortunes were
implicated regretted that his intimate knowledge of the distress of the
country, and of the causes that had led to it, had not been rendered more
available in discovering a remedy.
At a meeting of the Council of Finance and the General Council of the
Regency, documents were laid upon the table, from which it appeared that
the amount of notes in circulation was 2700 millions. The regent was
called upon to explain how it happened that there was a discrepancy
between the dates at which these issues were made and those of the edicts
by which they were authorised. He might have safely taken the whole blame
upon himself, but he preferred that an absent man should bear a share of
it; and he therefore stated that Law, upon his own authority, had issued
1200 millions of notes at different times, and that he (the regent),
seeing that the thing had been irrevocably done, had screened Law by
antedating the decrees of the council which authorised the augmentation.
It would have been more to his credit if he had told the whole truth while
he was about it, and acknowledged that it was mainly through his
extravagance and impatience that Law had been induced to overstep the
bounds of safe speculation. It was also ascertained that the national
debt, on the 1st of January 1721, amounted to upwards of 3100 millions of
livres, or more than 124,000,000l. sterling, the interest upon which was
3,196,000l. A commission, or _visa_, was forthwith appointed to examine
into all the securities of the state creditors, who were to be divided
into five classes; the first four comprising those who had purchased their
securities with real effects, and, the latter comprising those who could
give no proofs that the transactions they had entered into were real and
_bonâ fide_. The securities of the latter were ordered to be destroyed,
while those of the first four classes were subjected to a most rigid and
jealous scrutiny. The result of the labours of the _visa_, was a report,
in which they counselled the reduction of the interest upon these
securities to fifty-six millions of livres. They justified, this, advice
by a statement of the various acts of peculation and extortion which they
had discovered; and an edict to that effect was accordingly published and
duly registered by the parliaments of the kingdom.
[Illustration: D'ARGENSON.]
Another tribunal was afterwards established, under the title of the
_Chambre de l'Arsenal_, which took cognisance of all the malversations
committed in the financial departments of the government, during the late
unhappy period. A Master of Requests, named Falhonet, together with the
Abbé Clement, and two clerks in their employ, had been concerned in divers
acts of peculation to the amount of upwards of a million of livres. The
first two were sentenced to be beheaded, and the latter to be hanged; but
their punishment was afterwards commuted into imprisonment for life in the
Bastille. Numerous other acts of dishonesty were discovered, and punished,
by fine and imprisonment.
D'Argenson shared with Law and the regent the unpopularity which had
alighted upon all those concerned in the Mississippi madness. He was
dismissed from his post of Chancellor to make room for D'Aguesseau; but he
retained the title of Keeper of the Seals, and was allowed to attend the
councils whenever he pleased. He thought it better, however, to withdraw
from Paris, and live for a time a life of seclusion at his country-seat.
But he was not formed for retirement; and becoming moody and discontented,
he aggravated a disease under which he had long laboured, and died in less
than a twelve-month. The populace of Paris so detested him, that they
carried their hatred even to his grave. As his funeral procession passed
to the church of St. Nicholas du Chardonneret, the burying-place of his
family, it was beset by a riotous mob, and his two sons, who were
following as chief mourners, were obliged to drive as fast as they were
able down a by-street to escape personal violence.
As regards Law, he for some time entertained a hope that he should be
recalled to France, to aid in establishing its credit upon a firmer basis.
The death of the regent in 1723, who expired suddenly as he was sitting by
the fireside conversing with his mistress, the Duchess de Phalaris,
deprived him of that hope, and he was reduced to lead his former life of
gambling. He was more than once obliged to pawn his diamond, the sole
remnant of his vast wealth, but successful play generally enabled him to
redeem it. Being persecuted by his creditors at Rome, he proceeded to
Copenhagen, where he received permission from the English ministry to
reside in his native country, his pardon for the murder of Mr. Wilson
having been sent over to him in 1719. He was brought over in the admiral's
ship--a circumstance which gave occasion for a short debate in the House
of Lords. Earl Coningsby complained that a man who had renounced both his
country and his religion, should have been treated with such honour, and
expressed his belief that his presence in England, at a time when the
people were so bewildered by the nefarious practices of the South-Sea
directors, would be attended with no little danger. He gave notice of a
motion on the subject; but it was allowed to drop, no other member of the
House having the slightest participation in his lordship's fears. Law
remained for about four years in England, and then proceeded to Venice,
where he died in 1729, in very embarrassed circumstances. The following
epitaph was written at the time:
"Ci gît cet Ecossais célébre,
Ce calculateur sans égal,
Qui, par les régles de l'algébre,
A mis la France à l'hôpital."
His brother, William Law, who had been concerned with him in the
administration both of the bank and the Louisiana Company, was imprisoned
in the Bastille for alleged malversation, but no guilt was ever proved
against him. He was liberated after fifteen months, and became the founder
of a family, which is still known in France under the title of Marquises
of Lauriston.
[Illustration: NECK OR NOTHING.[15]]
[15] Neck or nothing, or downfall of the Mississippi
Company.--_From a Print in Mr. Hawkins' Collection_.
In the next chapter will be found an account of the madness which infected
the people of England at the same time, and under very similar
circumstances, but which, thanks to the energies and good sense of a
constitutional government, was attended with results far less disastrous
than those which were seen in France.
[Illustration: SOUTH-SEA HOUSE.]
THE SOUTH-SEA BUBBLE.
At length corruption, like a general flood,
Did deluge all; and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre's sordid charms.--_Pope_.
The South-Sea Company was originated by the celebrated Harley Earl of
Oxford, in the year 1711, with the view of restoring public credit, which
had suffered by the dismissal of the Whig ministry, and of providing for
the discharge of the army and navy debentures, and other parts of the
floating debt, amounting to nearly ten millions sterling. A company of
merchants, at that time without a name, took this debt upon themselves,
and the government agreed to secure them for a certain period the interest
of six per cent. To provide for this interest, amounting to 600,000l. per
annum, the duties upon wines, vinegar, India goods, wrought silks,
tobacco, whale-fins, and some other articles, were rendered permanent. The
monopoly of the trade to the South Seas was granted, and the company,
being incorporated by act of parliament, assumed the title by which it has
ever since been known. The minister took great credit to himself for his
share in this transaction, and the scheme was always called by his
flatterers "the Earl of Oxford's masterpiece."
[Illustration: HARLEY EARL OF OXFORD]
Even at this early period of its history the most visionary ideas were
formed by the company and the public of the immense riches of the eastern
coast of South America. Every body had heard of the gold and silver mines
of Peru and Mexico; every one believed them to be inexhaustible, and that
it was only necessary to send the manufactures of England to the coast to
be repaid a hundred fold in gold and silver ingots by the natives. A
report, industriously spread, that Spain was willing to concede four ports
on the coasts of Chili and Peru for the purposes of traffic, increased the
general confidence, and for many years the South-Sea Company's stock was
in high favour.
Philip V. of Spain, however, never had any intention of admitting the
English to a free trade in the ports of Spanish America. Negotiations were
set on foot, but their only result was the _assiento_ contract, or the
privilege of supplying the colonies with negroes for thirty years, and of
sending once a year a vessel, limited both as to tonnage and value of
cargo, to trade with Mexico, Peru, or Chili. The latter permission was
only granted upon the hard condition, that the King of Spain should enjoy
one-fourth of the profits, and a tax of five per cent on the remainder.
This was a great disappointment to the Earl of Oxford and his party, who
were reminded much oftener than they found agreeable of the
"_Parturiunt montes, nascitur ridiculus mus_."
But the public confidence in the South-Sea Company was not shaken. The
Earl of Oxford declared that Spain would permit two ships, in addition to
the annual ship, to carry out merchandise during the first year; and a
list was published, in which all the ports and harbours of these coasts
were pompously set forth as open to the trade of Great Britain. The first
voyage of the annual ship was not made till the year 1717, and in the
following year the trade was suppressed by the rupture with Spain.
The king's speech, at the opening of the session of 1717, made pointed
allusion to the state of public credit, and recommended that proper
measures should be taken to reduce the national debt. The two great
monetary corporations, the South-Sea Company and the Bank of England, made
proposals to parliament on the 20th of May ensuing. The South-Sea Company
prayed that their capital stock of ten millions might be increased to
twelve, by subscription or otherwise, and offered to accept five per cent
instead of six upon the whole amount. The bank made proposals equally
advantageous. The house debated for some time, and finally three acts were
passed, called the South-Sea Act, the Bank Act, and the General Fund Act.
By the first, the proposals of the South-Sea Company were accepted, and
that body held itself ready to advance the sum of two millions towards
discharging the principal and interest of the debt due by the state for
the four lottery funds, of the ninth and tenth years of Queen Anne. By the
second act, the bank received a lower rate of interest for the sum of
1,775,027l. 15s. due to it by the state, and agreed to deliver up to be
cancelled as many exchequer bills as amounted to two millions sterling,
and to accept of an annuity of one hundred thousand pounds, being after
the rate of five per cent, the whole redeemable at one year's notice. They
were further required to be ready to advance, in case of need, a sum not
exceeding 2,500,000l. upon the same terms of five per cent interest,
redeemable by parliament. The General Fund Act recited the various
deficiencies, which were to be made good by the aids derived from the
foregoing sources.
The name of the South-Sea Company was thus continually before the public.
Though their trade with the South American States produced little or no
augmentation of their revenues, they continued to flourish as a monetary
corporation. Their stock was in high request, and the directors, buoyed up
with success, began to think of new means for extending their influence.
The Mississippi scheme of John Law, which so dazzled and captivated the
French people, inspired them with an idea that they could carry on the
same game in England. The anticipated failure of his plans did not divert
them from their intention. Wise in their own conceit, they imagined they
could avoid his faults, carry on their schemes for ever, and stretch the
cord of credit to its extremest tension, without causing it to snap
asunder.