THE general degeneracy that seemed to have set in with the 18th century manifested itself among other forms in fierce lust of gain, and a wild spirit of speculation. Those financial complications which had hitherto been left to Jews, Venetians, and Genoese began to occupy every one, and the ideas of interest upon capital became universal. Paterson, in the Bank of England, gave the first impulse, but with a sober-minded spirit which made it a success. France, on the other hand, at the opening of the Regency, was in such a state as to be ready to resort to desperate remedies. When the Duke de Noailles presided the treasury was empty, the country exhausted, there was no pay for the troops, and in the provinces there were whole districts going out of cultivation, partly from depopulation through the long wars, partly from the crushing weight of the taxes, imposts, feudal dues of every sort that overwhelmed the peasantry. The Duke de Noailles tried to be economical. He diminished the enormous Royal household, and while reducing the army by 25,000 men, each soldier who should repair a ruined homestead and cultivate its farm was promised freedom from taxes for six years. The accounts were looked into, and the collectors who farmed the revenue were squeezed, so as to deprive them of all the wealth unfairly gained. But this measure was much obstructed. The Parliament, though honest men little favourable to fraud, were jealous of Government interference, and so entirely dulled was public morality in this respect, that the courtiers, ladies, and all took bribes from the threatened financiers to obtain exemption from the inquiry from the easy-going Regent ! Thus there was much less recovered than had been expected, and the deficit in the treasury was terrible. CAMEO XXVI. The Regency in France. 1715. САМЕО XXVI. John Law's Scheme. 1705. Some twenty years before, Paterson had come to the aid of William III. by suggesting the establishment of the Bank of England, and another Scotsman offered to show the Regent the means of freeing himself from his difficulties. John Law, who was born in 1671, was son to a goldsmith in Edinburgh, a profession with which banking was still closely united. He lost his father at fourteen, and soon became a man of pleasure, and was known as Beau Law or Jessemy Law at Edinburgh and in London. He gambled on system, and with such dexterity that he prospered greatly till a love affair caused a duel, in which he killed his opponent, was tried, and sentenced to death, but was reprieved. Hopes were given of a pardon, but the family of the deceased hindered it, and he escaped from prison and repaired to Paris, where after another course of successful gaming, he is said to have eloped with Lady Catherine Knollys, Lord Banbury's sister. At Genoa and Venice he studied banking, and afterwards at Amsterdam. There he conceived a system making Government become a gambler on a large scale, by using paper money instead of metal of intrinsic worth. He offered his plan to the Scottish Parliament in 1705, but it was rejected, and he travelled about to the Courts of Europe trying to get it accepted, and at the same time so continuing his play, that in 1714 his property amounted to £1,100,000. The first person who had believed in his scheme was Victor Amadeus, who, from Duke of Savoy, had been made King of Sicily. "I am not powerful enough to ruin myself," however, was what he said, when urged to make trial of it. However, he recommended Law to repair to France, where he declared the temper of the people was sure to be favourable. So Law went to Paris in 1714. He already knew the Duke of Vendôme and the Prince of Conti, and being a handsome, distinguishedlooking man of good breeding, he made his way in society. In 1716, he obtained permission from the Regent to set up a Bank, where he issued notes, whose value was secured upon his own property and that of his fellow-speculators. It throve extremely, and in the end of 1718, the Duke of Orleans persuaded his colleagues, the Duke of Bourbon and Marshal d'Autin, to convert Law's private Bank into a National Bank, like the Bank of England, issuing notes secured on the Royal property and the taxes, all the payments from Government to the public being made in paper, and difficulties being thrown in the way of changing it into money. Indeed, there was such a quantity of false coin current at the time that the notes were preferred, although the Royal Bank, which had branches at Lyons, Tours, Rochelle, Orleans, and Amiens, never cashed them without a profit, so that they were seldom returned, and their excess of pledges over the sum in hand was not felt. The Parliament, which still had charge of all the finance, however, distrusted it all, and could not endure the promotion of a foreigner. A week before the Bed of Justice, when the edict for the full establishment of the Royal Bank was to be registered, they put forth a decree stopping all the traffic of the Bank, and forbidding all aliens, even when naturalised, to meddle with the administration of the Royal property. They even intended to have Law arrested by their own officers, to hurry over his trial in three days, hang him in their court with closed doors, and then open the gates and display his corpse ! Warning was given to Law, and he took refuge in the Palais Royal, whence he did not emerge till after a Bed of Justice, when Royal authority overruled the Parliament, and gave him security in his position as Director, and he took every means of depreciating the current value of gold and silver in comparison with that of paper, even authorising creditors to receive payment in coin. To enhance their value, as well as for his own profit, Law, that first of the huge modern brood of speculators, set going a great Company, for which, in 1717, he had obtained letters patent. On the conclusion of the Treaty of Utrecht, to France had been ceded the south-eastern portion of North America, where the French had been the first explorers, and had begun a few settlements. The climate was good, and there was much fertile soil around the rivers. The advantages were magnified to the utmost extent, Louisiana, as the country was called, was said to contain gold mines, and a large company was formed expecting to get fabulous profits. It was termed the Company of the West, and commonly known as the Mississippi Scheme. Shares were issued, and money-paper-money, of course-paid down for them; the waste land sold at 30,000 livres for a square league. To people these grounds and bring in these huge profits, the slave trade was actively pursued, orders were sent to the criminal courts to transport the convicted felons, also the Huguenots. The police caught all whom they called vagabonds to deport, among them respectable citizens, who ransomed themselves if they could. Eighty coiners of false money were landed near the mouth of the Mississippi, where they founded New Orleans. The Regent divided on the map the vast territory into dukedoms and marquisates, which were obtained by favour or purchase, and thus colonised. By a bargain with some of the German Princes, 12,000 of their subjects were to be sent out to Law's own grant, and 4,000 actually went. There was neither order nor preparation for the most part. The unhappy beings were turned loose in the swamps, where many perished in great misery, and it was comparatively a very few of birth and intelligence who went out, with due arrangements, and founded the little colonial châteaux, that long were a feature in these regions, and where they and their descendants lived a joyous, easy, graceful life for full a century. The great proportion of the poor creatures died of fevers, inundations, starvation, mixed with the Indians, or gained an uncertain livelihood by the chase. It was not of the realities of the lives of settlers that the nominal owners thought, but of their shares and dividends, selling and stockjobbing other companies, such as that of the Senegal and of the East Indies existed. These were bought up, and fresh shares created, and there was an absolute frenzy of selling and buying so as to gain on each CAMEO The Mississippi 1717. CAMEO XXVI. Mania at Paris 1718. transaction. Fortunes, at least in name, were made by a few scratches of the pen, and all the world was rushing to profit by them. The Rue Quincampoix, between the streets of St. Denis and St. Martin, contained the Exchange. It was only 150 paces long and five wide, and it was choked by such throngs that each end was necessarily closed by an iron gate, which was opened at six in the morning and shut at nine at night, to the sound of a bell. It was absolutely blockaded, and transactions were going on constantly, not only in the houses but in the street, where a little hunchback made 50,000 francs by letting out his back as a desk to write upon. All ranks and both sexes mixed up together; great ladies, peers, citizens, priests, servants, country-folk, all jostled together asking questions on the one great subject with the easiest familiarity. A footman would set up his own carriage, but from force of habit get up behind. A lady, crazy to speak to Mr. Law, but finding him always too busy, resolved to be upset in her carriage close to him, that he might be forced to pick her up; and when she saw him, she was heard calling out to her coachman, "Versez ! Versez !" Paper could not be made fast enough for the vouchers and bank notes. Law himself purchased fourteen estates with titles annexed, among others the Marquisate of Rosing, the parental estate of the great Sully, whose family had become impoverished. He renounced his Protestanism, and being thus eligible for office, was made Comptroller-General of the Finances. Lady Catherine had a perfect court. The Duke of Orleans wanted a Duchess to take his daughter to Genoa. "Send to Madame Law," said his shrewd old mother. find them all sitting in her drawing-room." "You will He came to Court with a train of Marshals, Dukes, Bishops, and even the Prime Minister Dubois; and no wonder his arrogance swelled, so that he was heard to say before some English, that there was only one great kingdom in Europe, France; one great city, Paris. But this splendour was as brief as it was brilliant. The shrewder persons began to be uneasy at the quantity of paper money which, as they well knew, outran the value it represented, and the directors began to secure, in other countries, the gold that had been given in exchange. The Prince of Conti was one of the first to take alarm, and by actual force and threats, obliged Law to give him three waggon loads of gold and silver representing the value. It made the Regent very angry, and was a great shock to the general credit. There were symptoms of a run on the Bank, which Law thought to remedy by an edict, as Comptroller-General, forbidding the exchange of paper for specie, except for small sums, ten francs in silver or 300 in gold; and as his anxiety increased, he actually used Royal authority to issue an order that all specie should be brought to the Bank, and that what was retained should be confiscated, half being given to the informer. Accusation became a trade, so that even a son denounced his father, and in a month about forty millions were brought in, while every one did what they could. Then Law caused the goldsmiths to stop work, and called in their metal, as well as forbidding the use of diamonds and pearls. At last, he made the worth of the notes in coin only half their nominal value. There was such an outcry that the Regent withdrew the edict. "Since Law has been Comptroller, he has lost his head," he said. That night Law was arrested, but his books were in admirable order, and his plans most plausible, especially as he was no conscious imposter, but implicitly believed in them himself, and he was released; and though deprived of the office of Comptroller-General, continued a director. People trod on one another in the rush to the Rue Quincampoix. In a single day three persons were trampled to death. Moreover, the stock jobbers had to carry such a mass of paper in their portfolios, that in the crowd they became a mark for thieves. A police was established, but could not entirely prevent crime. A young profligate of high rank, only twenty years of age, Count Horn, who, in spite of his connection with princely families, had been prevented by his outrageous debauchery from rising to the rank of captain in the Austrian army, united with a Piedmontese named Millé, and another man of like character. They announced themselves as wanting to buy 100,000 crowns worth of shares, and appointed a meeting with a broker in a little public-house in the Rue Quincampoix. There, after looking over the unfortunate man's papers, they stabbed him with their daggers, and expected to escape by their audacity, but the cries of the landlord brought the police, and Horn and Millé were arrested, though their comrade escaped. For the pride of the blood he had disgraced, half the nobles in Flanders, France, and Germany exerted themselves to save the wretched Horn, and a promise was extorted from the Duke of Orleans that at least he should not be broken on the wheel; but the brokers and stock jobbers were in such a state, that to content them, he did not interfere, and the wretched men both alike suffered the lingering agonies of that atrocious form of execution. It was a sad contrast with the undeserved death of his ancestor under Philip II. After this catastrophe, the Exchange was removed to the Place Vendôme, where there was more room, and the rush went on as much as ever, for still there were shares in the companies to be purchased, and sometimes in a few days sold again for a huge value. The song in the streets went "Lundi, j'achetai des actions; The greediest of the stock jobbers was the Duke of Bourbon, whence the Exchange was called the Camp de Condé ; but a little later the CAMEO XXVI. The Mississippi Bubble. 1790 |