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Full text of "The Mississippi bubble : a memoir of John Law"

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JAMES FENIMORE COOPER: 

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( 



THE 



MISSISSIPPI BUBBLE 



A MEMOIR OF 



JOHN LAW. 



BY ^ D O m, 3? H IE THIERS, 

u 
ATWHOR OP "THE CONSULATE AND EMPIRE," ETC. 



TO WHICH ARE ADDED, 



Authentic Accounts of the Darien Expedition, and the South 
Sea Scheme. 



TRANSLATED AND EDITED BY 

FRANK S. FISKE. 



NEW YORK: 

W. A. TOWNSEND & COMPANY. 
1859. 



/r<3" 



07 



PttELAf 

ENTERED according to Act of Congress iu the year 1859, by 
W. A. TOWNSEND & CO., 

In the (Jerk s Office of the Distiict Court of the United States for the Southern District of 
New Yoik. 



W. H. TINSON, Stereotypes 



PEEFACE TO THE FKENCH EDITION. 



WE publish, with the consent of the author, a his 
torical work, clear, distinct and complete, although 
short, upon the system of Law. This work, which first 
appeared in an encyclopedic review about thirty years ago, 
produced a great sensation, and attracted to the then 
young author the attention of thinking men. We have 
reperused it, and it seems t"b us that, notwithstanding numer 
ous volumes have been published before and since upon the 
system of LAW, no one has ever presented, in a more pre 
cise and satisfactory manner, this singular financial 
phenomenon. It also seems to us that no one has so suc 
cessfully and ably deduced the important lessons which it 
contains ; lessons which it is not useless to reproduce to 
day, for the spirit of Law is present in all places and at all 
tunes. We, therefore, offer what appears to us to be a 
desirable edition of the work of M. Thiers ; for it has never 
been printed in a separate volume? and many readers have 
often asked for it in vain both in French and in foreign 
bookstores. We offer it in the form which we think at 
once elegant and convenient, and have submitted the proof 

vii 



774212 



PREFACE. 



sheets to the author, who has had the kindness to go over 
them carefully himself and make some corrections of this 
work of his youth. We hope, then, that this new edition, 
the only one in a separate volume, will be well received 
by an enlightened public, who are always friendly to a 
sound and useful literature. 



CONTENTS. 



CHAPTER I. 

Law s birth, parentage and education His personal appearance 
and qualities His early career in London Duel and its conse 
quences His travels and financial studies on the Continent 
Difference between money and wealth Banks and banking 
Paper money Law not guilty of the errors attributed to him 
His system of a general bank His attempt and failure to estab 
lish a territorial bank in Scotland, 13 

CHAPTER II. 

-/^ 

Law resumes his travels His success at the gaming-table Pro 
poses his system to various governments State of the French 
finances Measures of the Regent Debasing the coin Its effect 
Law offers his plans Objections raised to it Establishment 
of Law s private bank Its favorable reception by the people 
Its benefit to trade Its extension into the provinces Astonish 
ing success, 35 

CHAPTER III. 

Law s scheme of a commercial company The Mississippi company 
Jealousy of, and opposition to, Law He is sustained by tho 



X CONTENTS. 

Kcgent The brothers Paris The anti-system Law initiates a 
speculation in stocks Companies of the East and West Indies 
united Shares rise rapidly The rue Quincampoix Stockbrokers 
Run on the bank Law triumphs over everything, 57 

CHAPTER IV. ^ 

The national debt Law s project for redeeming it Caution neces 
sary in executing the project The collection of the revenue 
granted to Law s company Arrangements for the assumption of 
the national debt by the company General eagerness to subscribe 
for the shares The nobility pay court to Law Rage for specu 
lation begins Stockjobbing operations of the brokers 81 

CHAPTER V. 

Mistake in the details of the execution of Law s project New privi 
leges granted to the company Speculation attracts all classes 
and affects all kinds of business Foreigners arrive Tricks of 
the brokers Fortunes made in a few hours Actual value of the 
shares Law idolized Anecdotes His conversion Courted by 
foreign governments Continued success of the bank Excessive 
luxury of speculators Income of the company, 99 

CHAPTER VI. 

Extravagant prices of goods First decline of shares Drain of specie 
from the bank Forced measures resorted to Attempts to revive 
confidence by adding new functions to the company Letter to a 
creditor Panic increases Odious measures Licentiousness of 
the realizers Bank notes might and should have been discon 
nected from the shares Violent and criminal plan, 125 



CONTENTS. XI 

CHAPTER VII. 

The bank and the company united Price of the shares fixed 
Measures for regulating the exchange of shares Frightful de 
preciation of bank notes Debtors the only persons benefited 
Father betrayed by his son Speculators dispersed by soldiers 
Second "Letter to a Creditor" Ingratitude of the Mississippians 
Murder and robbery by a young nobleman Firmness of the 
Regent, 143 

CHAPTER VIII. 

Circulation of gold prohibited Reduction of the nominal value of 
shares and bank notes Great clamor raised Whole blame of 
the reduction falls on Law Regent yields to the clamor He 
retains Law in his favor Law repeals some of the most obnox 
ious regulations Measures to abolish the System Difficulties in 
carrying them out, 159 

CHAPTER IX. 

"Spoils of the Mississippians" Further efforts to bring in the 
notes Men suffocated in the crowd at the bank Mob pursue 
Law He seeks protection at the palace of the Regent Bank 
closed Tampering with the currency Severities toward the 
Mississippians Final abolition of the System Law quits France 
Confiscation of his property, 179 

CHAPTER X. / 

Recapitulation Comparison between this and other financial catas 
trophes Reflections, 205 



x CONTENTS. 

PAGE 

THE DARIEN EXPEDITION, 231 

Notes to Darien Expedition, 252 

Enthusiasm of the Scotch, 254 

Difficulties at the Start, 254 

Opposition of the English, 255 

Opposition of the Dutch, 256 

Disastrous Result, 257 

THE SOUTH SEA BUBBLE, 261 

Notes to South Sea Bubble, . 333 



CHAPTER I. 

Law s birth, parentage and education His personal appearance 
and qualities His early career in London Duel and its conse 
quences His travels and financial studies on the Continent 
Difference between money and .wealth Banks and banking 
Paper money Law not guilty of the errors attributed to him 
His system of a general bank His attempt and failure to estab 
lish a territorial bank in Scotland. 



JOHN LAW 



AND 



THE MISSISSIPPI BUBBLE, 



CHAPTEK I. 

JOHN LAW was born in Edinburgh, in April, 1671. 
His mother, Jane Campbell, was descended from 
the famous ducal house of Argyle. His father, 
William Law, followed the profession of a gold 
smith, which, by its privileges, its respectability, 
and its riches, was equivalent, at that time, to that 
of the bankers of the present day among commer 
cial nations. William Law acquired a considerable 
fortune, and bought in Scotland the two estates of 
Randleston and of Lauriston. He died very young, 
and left his oldest son, John Law, scarcely fourteen 
years old. 

This son w r as educated with great care, and mam- 
is 



16 MEMOIR OF JOHN LAW. 

fested a singular aptitude for every kind of study. 
He hastened to enjoy the independence of his for 
tune ; did not choose to embrace the profession of 
his father ; and preferred to a sedentary and labo 
rious life, one of pleasure, travel, and the study of 
the liberal sciences. He was handsome, tall, well- 
made, and full of dexterity and grace ; he excelled 
in all bodily exercises, and especially in the tennis 
court, which was then very much in vogue in 
Scotland. His mind was not less distinguished 
than his person; he expressed himself with ease 
and force, and manifested an extraordinary aptness 
for arithmetic and the exact sciences. 

At twenty years of age he left his mother, and 
went from Edinburgh to London. He employed 
his time in gaming, in the society of women, and in 
studying the mysteries of credit and of commerce. 
Endowed with an inquisitive spirit and an impetu 
ous temper, he formed an extensive acquaintance, 
and plunged into great dissipation. Applying a 
scientific calculation to the plays of the gaming 
table, he made, without unfairness, considerable 
sums, but his expenses were still more considerable 
than his gains, and he ended by contracting large 
debts. Constrained by necessity, he wished to dis 
pose of the estate of Lauriston, which had been left 
him by his father. Fortunately for him, Jane Camp- 



17 



bell, wlio watched over him like a tender and pru 
dent mother, came to his aid, paid his debts, and 
saved him his estate of Lauriston. 

The real merits of Law, the charm of his man 
ners, and his fortune, had brought him into intimate 
association with the principal nobility at London. 

A young married lady was the cause of a du?el 
between him and a nobleman, and he was so un 
fortunate as to kill his adversary by running him 
through the body. Arraigned before the royal 
commissioners, he was condemned to death. He 
was pardoned ; but being thrown into prison at the 
demand of the family of his antagonist, he effected 
his escape, and fled to the Continent. (NOTE 1.) 

Law was then twenty-four years old. He trav 
elled through various countries, visited France, still 
brilliant with the prosperity which sprung from the 
administration of Colbert, and repaired to Holland 
to study there the spirit of those proud, rich repub 
licans who had just acquired the inheritance of the 
Venetians and Portuguese, and covered every sea 
with their vessels. 

Amsterdam was at that time the commercial 
metropolis of Europe. The interest on money there 
rarely exceeded two or three per cent. She had a 
Jbank, celebrated and mysterious, whose credit had 
withstood the invasion of Louis XIV., whose trea- 



18 MEMOIR OF JOHN LAW., 

smy seemed inexhaustible, and whose system was 
an enigma even to those who devoted themselves to 
the study of finance. 

Law, in order to investigate more closely the 
mechanism of this bank, became a clerk of the 
English Resident, and in this manner added greatly 
to his knowledge of all subjects connected with 
commerce and finance. 

Law returned to Scotland about the year 1700, 
being then nearly thirty years old, and having 
acquired vast information. He was struck with 
the contrast which his own country presented to 
that which he had just visited. Instead of the 
extended commerce and the great and active traffic 
which he observed in England and Holland, he 
found the country poor and paralyzed by inaction. 

Scotland, mountainous and almost an island, had 
a sufficiently productive soil ; it was inhabited by 
an intelligent and laborious population, but needed 
capital to develop its agriculture and extend its 
commerce and manufactures. The Scotch, like all 
mountaineers, were endowed with active faculties, 
which there was no opportunity to exercise at home, 
and they expatriated themselves to seek their for 
tunes in richer countries. 

Law attributed the languishing condition of Scot 
land to the deficiency of capital. He was undoubt- 



CAPITAL AND CUKBENCY. 19 

edly riglit ; but, confounding capital with currency, 
which is simply a means of exchange, he imagined 
that an abundance of money was the caMse of the 
riches of states whose prosperity money had only 
developed. 

He says to himself : 

" What is wanting to the proprietor to enable 
him to clear up his lands ; to the manufacturer to 
multiply his looms ; to the merchant to extend his 
operations? Advances, that is to say money, to 
pay for the first materials and the manual labor. 

" With a few more millions we could pay the 
laborer who wishes to emigrate, we could retain 
him upon his native soil, and procure all the 
material necessary to occupy his labor. Holland, 
with a sterile soil, whose low banks expose it con 
stantly to the dangers of the flood, is the richest 
country in the world. Why ? Because she over 
flows with money. 

" By what means can money be supplied ? It is 
credit ; it is the establishment of banks which give 
to paper the value and efficiency of specie." 

Law thus involved himself by degrees in an error 
which the appearance of an abundant currency 
often occasions. He thought that the prosperity 
of a country depended upon the amount of money 
in circulation, and that this amount might be 



MEMOIR OF JOHN LAW. 



increased at pleasure. However, money is not food 
which will nourish a man, cloth which will clothe 
him, tools with which he can work ; money is the 
equivalent which, by way of exchange, serves 
to procure all these things ; but the things them 
selves must first exist. Cover a desert isle with all 
the gold of the Americas, or with all the notes of the 
Bank of England, and we should not at once find 
roads, canals, husbandry, manufactures in a word, 
business. If by any means the amount of money 
in a country could be increased without a propor 
tionate increase in the amount of everything else, 
the prices would only be raised without increasing 
actual wealth, because a greater quantity of cash 
would be put in the balance with the same quantity 
of merchantable articles. 

Money, then, is not wealth ; it is the result of 
wealth, and increases gradually with wealth. In 
proportion as business activity increases and indus 
try and commerce become more developed, the 
products, more numerous, must be exchanged more 
frequently and with greater rapidity ; traffic must 
increase in the same proportion as production. 
Then money, the medium of exchange, must become 
more abundant, because it is always attracted 
where it is needed. Soon, to money, a slow and 
expensive means of exchange, must succeed bills, 



BANKS. 21 

a means easy, prompt, and above all, economical. 
Banks will certainly be established : they are the 
result of an anterior prosperity, and serve effectively 
to increase it, but never precede it, because the 
creation of products must precede the demand for 
their circulation. 

If Law, deceived by the first appearances of an 
expanded currency, attributed too great results to 
money alone, he was not mistaken as to the means of 
increasing it by credit. He had explained and de 
veloped, in a remarkable pamphlet, the operation 
of banks better than it had ever been done before. 

There are, as every one knows, banks of deposit 
and lanJcs of discount. One deposits his cash in 
the first, and takes a certificate of deposit, which 
serves the purposes of cash in making payments. 
The advantage of these banks is, that they substi 
tute for coin, paper which represents its value, and 
is at the same time more easily transported and 
counted. The utility of banks of discount is 
entirely different. A bank of this kind examines 
commercial bills, that is, promises to pay, subscribed 
by one person in favor of another, and if it con 
siders them good, it gives for them, in consideration 
of interest, the value in notes which bear its own 
guaranty and are current as money. This is what 
is called discount. Its function is to change com- 



22 MEMOIR OF JOHN LAW. 

mercial bills and notes, which are not current as 
money, into its own notes, which are current, and 
thus enable them to be changed for anything else. 
In order to do this with security, it must have funds 
which are responsible for mistakes which it is liable 
to make in accepting worthless paper. Beside, as 
the notes which it issues depend upon the public 
confidence for their circulation, it must always be 
ready to convert them into coin at the wish of the 
holder, and it is for this purpose that it holds its 
specie reserve. Its funds should always meet the 
losses which it may sustain, and its specie reserve 
should always suffice for the redemption of notes 
which the holders are disposed to present for specie. 
When confidence is established, holders of notes do 
not wish, to exchange them for specie, except when 
they desire smaller sums, or for some purpose 
where specie alone can be used. 

Thus, the specie reserve need be only sufficient 
for the requirements of traffic, in paying sums 
smaller than the notes, or .for meeting certain spe 
cial necessities. A bank of discount, then, effects 
an actual increase of currency, or, in other words, 
increases the facilities of exchange by metamorphos 
ing commercial bills into bank notes circulating as 
readily as coin itself. 

One advantage of the establishment of banks, Law 



PAPER MONEY. 23 

appreciated as much as the increase of currency 
that was the introduction of paper money. Law 
esteemed this of special importance. Paper, in 
fact, can be transported to any distance without 
difficulty ; it is easily counted ; it is not merchan 
dise, like the precious metals, whose value changes 
according to the quantity in the market. For all 
these reasons Law thought it preferable to gold and 
silver for the requirements of business. 

He was right in many respects, and, notwith 
standing his high estimation of the virtues of paper 
money, he did not fall into an error which his com 
mentators and enemies have attributed to him. 

This error, less common now than formerly, con 
sisted in the belief that, as the fixed value of specie 
is ideal, and is useful only to be exchanged for sup 
plying our wants, paper money also, which was 
equally current and could be exchanged for bread, 
meat and clothing, had an intrinsic value as positive 
as that of gold or silver. But Law understood 
perfectly well that specie had an intrinsic value 
which paper money could not have; that coin 
melted down is still valuable as an ingot, while 
paper is worthless when it ceases to be a note, and 
that this intrinsic value of the precious metals 
makes them the most certain and secure medium 
of exchange. He has explained precisely his opin- 



24 MEMOIR OF JOHN LAW. 

ion, on this subject, in a pamphlet still in existence ; 
but he thought that banks could impart a real 
value to paper. In effect, the notes which a bank 
discounts are assignments of an anticipated product ; 
a bank, in accepting them and issuing its own notes 
in their place, guaranties the products. If it mis 
calculates, its capital is responsible. It is an in 
surance fund against its mistakes. Paper money 
thus acquires, by means of banks, the actual value 
of gold. It was upon these conditions, and these 
alone, that Law thought paper money preferable to 
specie. 

By comparing the results of his observations in 
the different countries of Europe, his views were 
remarkably expanded, and he had conceived the 
vastest system of credit that had ever been imagined. 
He had observed that the capitals of some great 
countries had banks, as at London and Amsterdam, 
but that the provinces in England and Holland did 
not participate in the advantages of this system of 
credit. 

He thought that by establishing a general bank, 
which should have its branches in second-rate cities, 
the advantages of paper money would be extended 
throughout an empire, even to the small towns and 
villages. 

If a bank at the capital, with a hundred million 



A NATIONAL BANK. 25 

francs in specie, could issue two hundred millions in 
bills, the general bank which he had planned could, 
he thought, in a country which had a thousand mil 
lion francs in coin, issue two thousand millions in s 
bills, and thus triple the facilities of exchange. In 
this way, the bills being sufficient for the principal 
circulation, all the coin of the country would be a 
specie reserve, except what was necessary for small 
change. This project was well planned and very 
practicable. Only Law exaggerated the possible 
extent of the use of paper money, and had too much 
confidence in the ease with which it might be put 
in circulation in remote districts. 

Law would have a bank of such importance a 
public institution, and the provincial treasuries for 
its corresponding branches. These principles stated, 
he deduced from them immense consequences. In 
the first place, most governments leased the collec 
tion of their revenue to companies of men called 
farmers of the revenue, who reaped therefrom con 
siderable profits, and inflicted outrageous vexations 
upon the taxpayers. 

The collection of the revenue could be confided 
to the general bank, and the profits therefrom saved 
to the state. The payment of the public expenses 
could also be made by the bank, through its corres 
pondence with its branches. It would thus have 

2 



26 MEMOIR OF JOHN LAW. 

the management of all the public money. The 
farmers of the revenue, to whom was leased the im 
post duty, exacted a usurious interest of the state 
when it needed any advances. The new bank 
would discount the impost as it discounted bills of 
exchange ; it would be possible for it to do this at 
a still more moderate charge, as in augmenting the 
amount of specie it would itself have contributed 
to reduce the interest on money. It could also be 
intrusted with the care of the loans, and, in this 
particular, avoid the extortions of the usurers. This 
is not all ; the system of monopolies being generally 
practised in Europe, and the greater part of the 
commerce with remote parts of the world being 
carried on by chartered companies, to whom gov- 
, ernment gave, on certain conditions, exclusive privi 
leges, this same general bank could have the privi 
leges of special lucrative commerce, and join to its 
numerous attributes that of trade. Combining thus 
the profits of a bank of discount with those of the 
administration of the public revenue and those of 
its commerce as a privileged company, it would ne 
cessarily have an immense capital, which it would 
distribute in shares among which would be divided 
its profits. In this manner it would offer its notes 
to those who desired a circulating medium, and its 
shares to those who sought a profitable investment. 



PLAN OF A BANK FOK SCOTLAND. 27 

Such is the ingenious and efficient system con 
ceived by Law, which united and placed on the 
same basis both public and private credit ; which 
reduced the different methods of making payments, 
which, before then, were slow, laborious and com 
plicated, into one only ; which furnished coin for the 
payment of small sums, and bank-notes for that of 
large ; which multiplied capital by simplifying the 
currency; which reduced thenceforth the in 
terest on money, and added to the introduction 
of an abundant and convenient currency the 
creation of a means of investment at once sure and 
profitable. 

Even at the present day we except from this sys 
tem only the leasing of the collection of the public 
revenues, which is no longer permitted, and the 
monopolies, which were required at that time, as 
companies with extraordinary powers were neces 
sary to penetrate unexplored and unfrequented 
parts of the world. 

Full of these views, Law presented a plan adapted 
to the wants of his own country about the year 
1700. This plan was to constitute a company with 
power to collect the public revenue, to carry on 
certain kinds of commerce with exclusive privileges, 
to direct manufactures, certain commercial en 
terprises, the fisheries, etc. His plan, although 



20 MEMOIR OF JOHN LAW. 

rejected, attracted public attention to him, and 
brought him in contact with the principal persons 
in Scotland. 

In 1705 it was proposed to establish a territorial 
bank. Law offered a well-digested plan for one, in 
a very curious pamphlet entitled, " Considerations 
upon Hard Money." Aside from the error which 
we have mentioned, and which was disposed to at 
tribute the prosperity of states exclusively to the 
abundance of money, the means of increasing this 
abundance by banks are clearly explained, and with 
an understanding of the subject very uncommon 
at that time. This new plan of Law was no better 
received than the first. It was rejected, from the 
apprehension, it was said, of giving too much power 
to the court. (NOTE 2.) 



NOTES TO CHAPTER I. 

(1.) LAW S DUEL AND ITS CONSEQUENCES. 

A MRS. LAWRENCE was the occasion of a quarrel 
between him and Mr. Edward Wilson, fifth son of 
Thomas Wilson of Keythorpe, in the County of 
Leicester, which led to a hostile meeting betwixt 
the parties in Bloomsbury Square, 9th April, 1694, 
when Mr. Wilson was killed on the spot. 

Mr. Law was immediately apprehended, and was 
brought to trial before the King and Queen s Com 
missioners, who sat at the Justice Hall in the Old 
Bailey, on the 18th, 19th and 20th of April, 1694. 
In the proceedings published by authority, the 
statement is thus given : John Law, of St. Giles s-in- 
the Fields, gentleman, was arraigned upon an indict 
ment for murder, for killing Edward Wilson, gentle 
man, commonly called Beau Wilson, a person who, 
by the common report of fame, kept a coach and 
six horses, maintained his family in great splendor 
and grandeur, being full of money no one com 
plaining of his being their debtor, yet from whence 



30 MEMOIR OF JOHN LAW. 

he had the effects which caused him to appear in so 
great an equipage is hard to be determined. The 
matter-of-fact was this : some difference happened 
to arise between Mr. Law and the deceased con 
cerning a Mrs. Lawrence, who was acquainted with 
Mr. Law ; upon which, on the 9th of April instant, 
they met in Bloomsbury Square, and there fought 
a duel, in which Mr. Wilson was killed. It was 
made appear also that they had met several times 
before, but had not opportunity to fight; beside, 
there were several letters sent by Mr. Law, or given 
to Mr. Wilson by him, which letters were full of 
invectives and cautions to Mr. Wilson to beware, 
for there was a design of evil against him; and 
there were two letters sent by Mr. Wilson, one to 
Mr. Law, and the other to Mrs. Lawrence. Mr. 
Wilson s man, Smith, swore that Mr. Law came to 
his master s house, a little before the fatal meeting, 
and drank a pint of sack in the parlor ; after which, 
he heard his master say, that he was much surprised 
with something that Mr. Law had told him. Cap 
tain Wightrnan, a person of good information, gave 
an account of the whole matter. He said that he 
was a familiar friend of Mr. Wilson was with him 
and Mr. Law at the Fountain Tavern in the Strand, 
and after they had stayed a little while there Mr. 
Law went away. After this, Mr. Wilson and Cap- 



LAW S DEFENCE. 31 

tain Wightman took coach and were driven* 
toward Bloomsbury, where Mr. Wilson stepped out 
of the coach into the square, where Mr. Law met 
him ; and before they came together, Mr. Wilson 
drew his sword and stood upon his guard. Upon 
which Mr. Law immediately drew his sword and 
they both passed together, making but one pass, by 
which Mr. Wilson received a mortal wound in the 
upper part of the stomach, of the depth of two 
inches, of which he instantly died. The letters 
read in court, were full of aggravations on both 
parts, without any name subscribed to them. There 
were other witnesses that saw the duel fought, who 
all agreed in their depositions that they drew their 
swords, and passed at each other, and presently Mr. 
Wilson was killed. This was the sum of the evi- 
4ence for the crown. 

Mr. Law, in his defence, declared that Mr. Wil 
son and he had been together several times before 
the duel was fought, and no quarrel ever took place 
between them till they met at the Fountain Tavern, 
which was occasioned about the letters ; and that 
his meeting with Mr. Wilson in Bloomsbury was 
merely an accidental thing, Mr. Wilson drawing 
his sword upon him first, by which he was forced 
to stand in his own defence that the misfortune 
did arise only from a sudden heat of passion, and 



32 MEMOIR OF JOHN LAW. 

not from any malice prepense. The court acquainted 
the jury, that if they found Mr. Law and Mr. Wil 
son did make an agreement to fight, though Mr. 
Wilson drew first, that Mr. Law killed him, he was 
by the construction of the law guilty of murder ; 
for if two men suddenly quarrel, and one kill the 
other, this would be but manslaughter: but this 
case seems to be otherwise, for there was a contin 
ual quarrel carried on betwixt them for some time 
before ; therefore, must be accounted a malicious 
quarrel, and a design of murder in the person that 
killed the other. 

The trial lasted long and the prisoner had persons 
of good quality who gave a fair account of his life 
in general, and that he was not given to quarrelling, 
nor a person of ill behavior. The jury having con 
sidered of a verdict very seriously, found that 
Mr. Law was guilty of murder, and sentence of 
death was passed on him, 20th April, 1694. 
WOOD. 

In the London Gazette of Monday, Tth January, 
1695, a reward of fifty pounds was offered for the 
apprehension of Capt. John Law, a Scotchman, 
lately a prisoner in the King s Bench, for murther ; 
who is described as " a very tall, black, lean man, 
well shaped, above six foot high, large pock-holes 



TEEEITOErAL BANK. 33 



in his face, big, high nosed, speaks broad and 
loud." This description, which conveys no very- 
favorable idea of Law s personal appearance, and 
differs from his real portrait, is supposed by 
Mr. Wood to have been drawn up with a view to 
facilitate his escape. The prefix of captain, which 
is otherwise a good travelling title, may also per 
haps be explained on the same hypothesis. Ency 
clopedia J3ritanniea. 

(2.) LAW S TEEEITOEIAL BANK. 

Law s proposal for a territorial bank was, thai 
commissioners, to be appointed by an act, under the 
control of Parliament, should be empowered to 
issue notes, either in the way of loan, at ordinary 
interest, or upon landed security ; the debt not, 
however, to exceed half, or at most, two-thirds of 
the value of the land, or upon land pledges, redeem 
able within a certain period, to the full value of the 
land ; or lastly upon the sale irredeemably to the 
amount of the price agreed upon. Paper money 
thus issued and secured would, he conceived, be 
equal in value to gold and silver money of the same 
denomination, and might even be preferred to these 
metals as not being like them liable to fall in 

value. Encyclopedia Britannica. 

2* 



CHAPTER II. 

Law resumes his travels His success at the gaming-table Pro 
poses his system to various governments State of the French 
finances Measures of the Regent Debasing the coin Its effect 
Law offers his plans Objections raised to it Establishment 
of Law s private bank Its favorable reception by the people 
Its benefit to trade Its extension into the provinces Astonish 
ing success. 



CHAPTEB n. 

THEREUPON, Law left home and recommenced his 
travels, either to gain more knowledge or to present 
his system acceptably to some of the principal states 
on the Continent, ruined by the wars of Louis XIV., 
and very ignorant in all matters connected with 
credit. He went to Brussels, and from Brussels to 
Paris. He gave himself up to gaming at the latter 
capital, and, thanks to his genius for calculation, he 
won large sums. He held the faro bank at the 
house of Duclos, a celebrated courtesan of that 
period, and never commenced playing without a 
hundred thousand francs. 

He even had made some gold counters, worth 
eighteen louis, for greater convenience in counting. 
He established relations with several gentlemen of 
the court, and, above all, with the Duke of Orleans, 
who liked inventive minds, and was disposed to 
adopt his views. It was at the time of the war of 
the succession. Chamillart, overcome by the bur 
den of the finances, was ready to resign the charge 
of them. Law offered his plans, but no one was in 

81 



38 MEMOIR OF JOHN LAW. 

a condition to comprehend them ; besides, he was a 
Protestant, and Louis XIY. would not listen to him. 
Soon, even, suspicions were excited concerning the 
stranger, who displayed the greatest luxury, and 
won large sums from the courtiers ; and the inten- 
dant of the police, M. d Argenson, sent an order to 
Law requiring him to leave Paris within twenty- 
four hours. Law repaired to Italy, and continued 
to game, whether at Genoa or at Yenice, and won 
immense sums. He then went to Turin, where he 
lent money to the famous Yendome, and succeeded 
in having himself presented to Yictor Ame de e, to 
whom he proposed his system of finance. Amedee 
replied that the system was not adapted to a coun 
try in the midst of the Alps, and dismissed him, ad 
vising him to take his plans to France or Germany. 
The Emperor was then occupied in establish 
ing a bank. Law hastened to submit his views 
to him : succeeded no better than with the other 
princes to whom he had presented them, and again 
returned to his own country. It was said that the 
sums which he had won at the gaming table 
amounted to two millions. He transferred these 
two millions to France, and prepared to return there 
himself. The death of Louis XIY., the accession 
to power of the Duke of Orleans, and the deplorable 
state of the French finances, made him hope that, at 



FINANCIAL CONDITION OF FRANCE. 39 

last, lie should find a country disposed to adopt his 
measures. 

The old king had just expired, in 1715. The 
war of the succession was ended. During this 
ruinous war, Demarest, who had succeeded Chamil- 
lart, had had recourse to all expedients for raising 
money. He had frequently renewed the forms of 
the mortgages on the treasury, in order to revive 
the confidence of the usurers. He had issued 
government stocks under every name and form, in 
order to give them a little credit ; but these expe 
dients were exhausted, and the royal stocks were at 
a discount of from 70 to 80 per cent. Demarest pre 
sented, on the 20th of September, a desperate report 
for the year, of which the following is the substance : 
expenses, 148 millions; receipts anticipated, ex 
cept 3 millions ; 710 millions of royal stocks pay 
able during the current year; whole districts 
depopulated, commerce ruined, troops unpaid and 
ready to revolt. In this extremity, bankruptcy was 
proposed to the regent. It was urged that a sove 
reign is not surety for the blunders of his pre 
decessors, and that a severe example would render 
capitalists less ready to lend themselves to the 
caprices of a spendthrift ruler. The courtiers, 
who hoped that the relief of the treasury would 
permit a renewal of favors to them, insisted upon 



40 MEMOIR OF JOHN LAW. 

bankruptcy. The regent spurned so unworthy an 
expedient, and held himself bound by the engage 
ments of the late king. He also refused to give a 
forced credit to stocks already due, for that would 
create a paper money discredited in advance. 
(NOTE 1.) 

He first set himself about paying the troops, and 
the arrearages due on some annuities. In order to 
procure the means, he ordered the revenue of the 
year to be paid into the treasury although pre 
viously mortgaged. This was certainly a partial 
bankruptcy, but it was inevitable. He ordered the 
reduction of many annuities, and of almost all those 
which were at an exorbitant interest; he ordered 
that the stocks already due should be revised and 
reduced, and then be converted into 250 millions o 
notes, in one form called national notes, successively 
redeemable and bearing an interest of 4 per cent. ; 
he established a court for the purpose of prosecut 
ing and fining the brokers who had made disreput 
able fortunes by their traffic in these securities. At 
that time, governments used to take such high 
handed measures ; pressed by imperative necessity, 
they would yield to the hard conditions which 
the usurers imposed upon them ; but, the time of 
distress once passed, they took back, by force, that 
which the usurer had wrung from them by extortion. 



MEASURES OF THE KEGENT. 4:1 

We see that the regent, without consenting to a 
general and absolute bankruptcy, had recourse to 
partial nonpayments, depending upon the import 
ance and character of the debts. , 

As it was impossible to fulfill all the obligations 
contracted in the last reign, he endeavored to make 
the necessary distinctions between them as just as 
possible ; and reducing some and postponing others, 
he failed to meet only the engagements which were 
impracticable. Among the measures which he 
adopted, there was one, however, as dishonest as it 
was impolitic : this was changing the value of the 
coin. The practice of resorting to this measure, 
which prevailed at that period, is the only excuse 
for the regent. 

Governments, for several centuries, forgetting 
that the value of bullion did not depend upon 
their decrees, but upon commerce, recoined money, 
raised it to a fictitious nominal value, and 
poured it into circulation at a price very 
much greater than its actual value. But these 
expedients served only to create a financial 
derangement, without any real advantage to the 
government. 

The overvalued denomination of coins added 
nothing to their real worth ; the price of every 
thing rose in proportion, and the same amount of 



4:2 MEMOIR OF JOHN LAW. 

gold and silver was always necessary to purchase 
the same articles. No one suffered by the wrong 
except such creditors as were compelled by pre 
vious contracts to receive specie at its nominal 
value. The government realized scarcely any 
benefit from the fraud, because counterfeiters 
recoined money themselves, and thus made the 
profit which the reduction in the weight of coin 
offered them. This crime, called uttering de 
based coin, was punished by the severest pen 
alties, in vain. The regent commanded that the 
thousand millions then in circulation in France 
should be converted into twelve hundred millions. 
The government ought thus to have realized a pro 
fit of two hundred millions, as it issued twelve for 
every ten required. But only a small part of the 
thousand millions found its way to the mint ; the 
Dutch and the counterfeiters made most of the il 
legitimate profit. 

But, notwithstanding these measures, the difficul 
ties were only postponed. The annual interest on 
the debt, reduced and readjusted, still amounted to 
eighty millions that is to say, to about one-half the 
revenue. The royal stocks, converted into two hun 
dred and fifty millions of national scrip, continued 
to be at a discount of from seventy to eighty per 
cent. Public and private credit were annihilated. 



The regent, who wished to test the presbysynodic 
system of the Abbe St. Pierre, and divide the ad 
ministration of government among several coun 
cils, had placed the Duke of ISToailles at the head oi 
the Council of Finance. The Duke proposed some 
very wise but very slow plans of economy. The 
exigencies of the situation demanded means for 
more speedy extrication from the immediate diffi 
culties. It was at this moment that Law presented 
his system. Law by no means despaired of France; 
the most fertile and most thickly populated country 
in Europe, as well as the most industrious. Al| 
though in a desperate situation for the moment] 
this beautiful kingdom still had three times thj 
revenue of England. In order to revive industry! 
and relieve the oppressions under which it was readj 
to succumb, it was only necessary, according t4 
Law, to reestablish confidence and a sound cur 
rency by means of a good system of credit. 

The genius and enterprising spirit of the peoplfr 
rendered them peculiarly fit to adopt a new ani 
grand theory. Eepulsed by the late king, Laf 
flattered himself that he should be well received ty 
the regent. The Duke of Orleans was gifted wit[i 
a keen, bold spirit ; a foe to the prejudices froiji 
which he had suffered oppression in his youth, lie 
had devoted himself to the study of the natural 



I 

14 MEMOIR OF JOHN LAW. 

sciences, of chemistry and of alchemy, to such 
an extent even as to be accused of complicity 
with poisoners. He had studied, above all, the 
principles of government. He knew Law, ap 
preciated his genius, was pleased with his per- 
ion, and admired his theories. A system, the prin 
ciples of which were sound in part, and which 
could do no harm except by a misapplication 
<>f those principles, was certain to catch the adven 
turous spirit of the prince, and it had completely 
seduced him. The increasing independence of 
thought, the taste for novelty, the license of man- 
rers, results of a too sudden emancipation from a 
too rigid constraint, signally favored the experiment 
vliich was to change for a moment, the face of France. 
Law did not propose any half-way measures. He 
offered his project entire; that is to say, a bank 
which should discount, should collect the national 
revenues, should carry on commercial monopolies, 
aid afford, at the same time, a plentiful circulation 
o* paper money and a means of profitable invest 
ment. The council of finance, composed of saga 
cious but timid men, did not comprehend the pro 
ject of Law, or were frightened by it, and decided 
tc reject it. Law then reduced the extent of his 
plans. He proposed simply a bank of discount, and 
eyen offered to establish it at his own expense. He 



OPPOSITION TO LAW S BANK. 45 

presented several memorials on the subject, which 
contain little to instruct us to-day, yet they are 
models of reasoning. He maintained that a bank 
would increase the currency by the issue of its 
notes, would render the remittances from one pro 
vince to another more convenient, would reestablish 
confidence by the creation of money of a fixed 
value bank money y would permit foreigners to 
make their contracts in France with a basis of 
fixed and certain value, and would contribute by 
all these means to the restoration of public and pri 
vate credit. Law wished to make this experiment 
at his own risk and peril, and offered his property 
as a guaranty against any loss which might result. 

A member of the Parliament of Paris, discussing 
Law s project, raised some objections to it, which 
it is interesting to recall, as illustrating the history 
of the stagnating influence of routine. Among 
other inconveniences, he insisted that a bank could 
not redeem its notes if everybody should wish to 
realize them at the same time ; its treasury would 
tempt the rapacity of government ; and, last of all, 
that its bills would incur a danger which attaches 
to paper, viz. that of being more easily lost, stolen, 
or burned than specie. This shows what sort of 
financiers Law had to do with. He answered these 
objections, and succeeded in convincing the regent 



46 MEMOIR OF JOHN LAW. 

His plan of a bank of discount was adopted, and lie 
was authorized to establish one at his own expense. 
The charter was issued by an edict of the second of 
May, 1716. The capital was fixed at six millions 
of francs, and was divided into twelve hundred 
shares of five thousand francs each. He was 
authorized to discount bills of exchange, to keep 
accounts with merchants, by means of what was 
then called a " bank clearing," and to issue notes 
payable to bearer in coin (so said the edict) of the 
weight and denomination of that day. Thanks to 
this last clause, the variations in the value of money 
were no more to be feared by those who should stipu 
late for bank money, since they were certain, thus 
to contract according to the rates of coin on the 2d 
day of May, 1716. Beside, this guaranty offered to 
foreigners, there was another assured them ; the notes 
of the bank and the amounts on deposit were exempt 
ed from the right of confiscation. The offices were 
of, and in, the house of Law. The Duke of Orleans 
accepted the title of patron of the new institution. 
(NOTES 2 and 3.) 

Everything at this time made the necessity of a 
bank of discount apparent, whether it was the high 
rates for money, or the uncertainty in the value of 
coin. Thus the establishment of Law could not fail 
to succeed. The government was the first to make 



4:7 



use of the notes ; it received and disbursed them. 
The holders of the bills having found the greatest 
facility in realizing them at the bank, acquired con 
fidence and diffused it. People began to be proud 
of this paper, so readily converted into specie, and 
were glad to make use of it, on account of the 
promptness of payments which it introduced. It 
had, moreover, an advantage very much felt : that 
was, its redemption in coin of a fixed value. The 
constant variation in the price of coin rendered it 
uncertain upon what basis a contract was made. 
By stipulating for bank notes, it was certain that 
the contract was payable in coin of the weight and 
denomination of the second May, 1Y16. (NOTE 4.) 
This was a powerful reason for everybody to cori- 
tr,act with that stipulation, and even to deposit their 
specie at the bank to obtain the notes. Foreigners, 
who had not dared to trade any more with Paris, on 
account of the uncertainty of values, also contracted 
for bank notes, and resumed the current of their 
business with France. 

The circulation thus, by degrees, became estab 
lished. The moderate charge for discount also had 
a most beneficial influence. Usury diminished ; 
credit revived. On the whole, at the end of one 
year, all the results predicted by Law were, for the 
most part, accomplished. 



4:8 MEMOIR OF JOHN LAW. 

These fortunate beginnings secured for him the 
favor of the public and the entire confidence of the 
regent. Soon this prince gave himself up entirely 
to the Scotch financier, and wished to procure him 
the means of putting all his plans in execution. 

The first thing to do was to extend the connec 
tions of the bank and introduce its notes into the 
provinces, in order to change it from a special to a 
general bank. To accomplish this it was necessary 
that the notes sent into the provinces should there 
be converted into specie, or should be found of suffi 
cient use to be retained there. It was this which 
was effected by the edict of 10th April, 1717, given 
one year after the establishment of the bank. By 
virtue of this edict, the notes could be given in pay 
ment of duties, and the farmers of the revenue and 
their subordinates, the receivers, etc., in a word, all 
the officers of the government treasury, were 
ordered to give receipts for their value in specie 
whenever they were presented. This was the best 
method of aiding the general bank, since the notes 
sent into the provinces could be used there for the 
payment of taxes, or would be at once converted 
into specie. From this moment the bank notes 
were employed for all remittances from Paris to the 
provinces, and from the provinces to Paris. 

It became useless to transport specie, for all of 



CIRCULATION OF THE NOTES. 4:9 

that which used to circulate from town to town was 
deposited either at the bank or the public treasuries, 
and exchanged for bank-notes, which were trans 
mitted in their place. In this manner the general 
reserved fund of the bank was likely to be increased 
by all the specie which its notes would displace, 
and Law saw himself on the point of realizing his 
project of a vast banking establishment, having for 
a reserved fund all the specie of the country. The 
expenses of transportation were saved, circulation 
was accelerated, and Law had devised a very simple 
means of rendering it more safe; it was to have 
the notes indorsed by those who sent them, the 
indorsement not to operate at all as a guaranty. 
This precaution prevented loss or theft, for the 
finder, or thief, could not use them. They imme 
diately began to circulate throughout France in 
considerable sums. They were returned to the 
treasuries at Paris, covered with indorsements, and 
were immediately destroyed to be replaced by 
others. 

The success of this bank was soon astonishing. 
With a capital of "only six millions, it would issue 
fifty or sixty millions of notes, without confidence 
in it being in the slightest degree shaken. On the 
contrary, the demand for the notes increased every 

day, and the deposits of gold and silver increased 

8 



50 MEMOLR OF JOHN LAW. 

perceptibly. If Law had devoted himself entirely 
to this institution, he would be considered one of 
the benefactors of our country, and the originator 
of a magnificent system of credit : but his impetu 
ous nature, joined to that of the people among 
whom he operated, brought about, in a short time, a 
gigantic and disastrous imitation. 

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 lat 
ter were constantly liable to depreciation by the un 
wise 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 con 
sequence 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 



BANK NOTES AT A PREMIUM. 51 

lift up her head, the taxes were paid with greater 
regularity and less murmuring ; and a degree of 
confidence was established that could not fail, if it 
continued, to become still more advantageous. In 
the course of a year, Law s notes rose to fifteen per 
cent, premium, while the billets d etat, or notes 
issued by the government as security for the debts 
contracted, by the extravagance of Louis XIY., 
were at a discount of no less than seventy-eight and 
a half per cent. 

The comparison was so greatly in favor of Law, 
as 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, Kochelle, Tours, Amiens, and Orleans. 



NOTES TO CHAPTEE H. 

(1.) FINANCIAL CONDITION OF FRANCE. 

DURING the fourteen last years of Louis XIY. s 
reign, the expenses had absorbed two billions eight 
hundred millions (francs) ; the actual receipts had 
been only eight hundred and eighty millions. It 
was necessary to borrow about two billions in the 
money of that time, which is equal to about three or 
four billions of our money. This deficit .had been 
consolidated in various ways, so that when the king 
died in September, 1715, there were arrears of 
711 millions ; the deficit of the current year was 
already 78 millions. The treasury was empty. 
People in several provinces refused to pay taxes. 
As to the public distress, it is sufficient to say that 
great numbers died during the ensuing winter in 
Paris from cold and famine. COCHET. 

(2.) 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 coun- 



ORGANIZATION OF LAW S BANK. 53 

try, but no man could be more averse to putting 
his shoulders manfully to the wheel. He disliked 
business, he signed official documents without pro 
per examination, and trusted to others what he 
should have undertaken himself. The cares insepa 
rable 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 vir 
tue enough to sacrifice his ease and his pleasures 
in the attempt. No wonder that, with this charac 
ter, he listened favorably to the mighty projects, 
so easy of execution, of the clever adventurer whom 
he had formerly known and whose talents he appre 
ciated. MACKAY. 

(3.) All persons whatsoever, to be at liberty to 
subscribe for as many shares (in Law s bank) as 
they pleased, and it was declared that the bank 
securities belonging to, as well as the money lodged 
in it by foreigners, should not be subject to any 
confiscation or attachment whatsoever, even in case 
of a war with the nations to which the proprietors re 
spectively belonged. All questions to be determined 
by plurality of votes, those possessing from five to ten 
shares to have one vote ; from ten to fifteen shares to 
have two votes, and so on in proportion ; but those 
who had less than five shares were to be excluded 



54: 



MEMOIR OP JOHN LAW. 



from any share in the management. The accounts 
to be balanced twice a year, viz., from the 15th to 
the 20th of June, and from the 15th to the 20th of 
January. Two general courts to be held yearly, in 
which the state of the company s affairs should be 
discussed, and the dividends settled. The treasurer 
never to have more than 200,000 crowns, nor any 
of the cashiers more than 20,000 in hand at a time ; 
and they were, beside, obliged to find sufficient 
security for their intromissions. The votes to be 
signed by the director, and by one of the proprie 
tors, and to be revised by an inspector appointed by 
the regent. The bank not to undertake any sort 
of commerce whatever, nor to charge itself with the 
execution of any commissions ; the notes to be all 
payable at sight, and no money to be allowed to be 
borrowed by the bank on any pretext whatever. 
Various regulations were added of less importance 
and too long to be enumerated in this place. 
WOOD. 

(4.) The terms in which the notes of the General 
Bank were couched, viz., " The bank promises to pay 

to the bank at sight, the sum of crowns, in coin 

of the weight and standard of this day" (of the date 
of each note), " value received," effectually guarded 
against this contingency. Let us state, by way of 



FIXED VALUE OF THE NOTES. 55 

example, that if one who had paid in, and taken 
out a bank note for 1,000 livres or 25 niarcs, on the 
2d of June 1716, when the standard of the specie 
was settled by law at 40 livres the marc, wanted 
to exchange it at an after period when the standard 
was fixed at 50 livres the marc, he would, on pre 
senting his note, receive 25 marcs or 1,250 livres. 
The bank was in like manner secured from suffer 
ing if the reverse took place. On this account, as 
well as from the quickness and punctuality of the 
payments, and the orders given to the officers of the 
revenue in all parts in the kingdom to receive the 
paper, without discount, in payment of taxes, the 
notes of the General Bank in a short time rose to 
great repute, and were, by many, preferred to 
specie, insomuch that they soon came to pass cur 
rent for one per cent, more than the coin itself. 
WOOD. 



CHAPTER III. 





Law s scheme of a commercial company The Mississippi company 
Jealousy of, and opposition to, Law He is sustained by the 
Regent The brothers Paris The anti-system, Law initiates a 
speculation in stocks Companies of the East and West Indies 
united Shares rise rapidly The rue Quincampoix Stock 
brokers Run on the bank Law triumphs over everything. 



3* 5T 



CHAPTEE II 

LAW was always scheming to concentrate into 
one establishment the bank, the administration of 
the public revenues, and the commercial monopo 
lies. He resolved, in order to attain this end, to 
organize, separately, a commercial company, to 
which he would add, one after another, different 
privileges in proportion to its success, and which he 
would then incorporate with the general bank. 
Constructing thus separately each of the pieces of 
his vast machine, he proposed ultimately to unite 
them and form the grand whole, the object of his 
dreams and his ardent ambition. 

An immense territory, discovered by a French 
man, in the ISTew World, presented itself for the 
speculations of Law. The Spanish had established 
themselves a long time before around the Gulf of 
Mexico, the English along the shores of Carolina 
and Virginia, the French in Canada. But, while 
the southern borders of America were thus occupied 
by Europeans, the interior of this beautiful country 
was unexplored and left to its Indian population. 



60 MEMOIR OF JOHN LAW. 

The Chevalier de Lasalle, the famous traveller of 
the time, having penetrated into America by Upper 
Canada, descended the river Illinois, arrived sud 
denly at a great river half a league wide, and, 
abandoning himself to the current, was borne 
into the Gulf of Mexico. This river was the 
Mississippi. The Chevalier de Lasalle took pos 
session of the country he had passed through 
for the king of France, and gave it the beau 
tiful name of Louisiana. A colony was imme 
diately sent there. A bold trader, named Crosat, 
obtained the privilege of trading there, and 
attempted to found an establishment, which failed 
of success on account of the jealousy of the neigh 
bors, the negligence of the colonists, and the want 
of discipline among the troops. He then demanded 
permission to resign this privilege, which had be 
come a burden. Law conceived the idea of becom 
ing his successor. There was much said of the 
magnificence and fertility of this new country, 
of the abundance of its products, of the richness 
of its mines, which were reported to be much more 
extensive than those of Mexico or Peru. Law, tak 
ing advantage of this current of opinion, projected 
a company which should unite the commerce of 
Louisiana with the fur trade of Canada. The 
regent granted all he asked by an edict given in 



THE WEST INDIA COMPANY. 61 

August, 1717, fifteen months after the first esta 
blishment of the bank. 

The new company received the title of the West 
Indian Company. It was to have the sovereignty 
of all Louisiana on the condition only of liege 
homage to the king of France, and of a crown of 
gold of thirty marcs at the commencement of every 
new reign. It was to exercise all the rights of sove 
reignty, such as levying troops, equipping vessels of 
war, constructing forts, establishing courts, working 
mines, etc. The king relinquished to it the vessels, 
forts and munitions of war which belonged to the 
Crosat Company, and conceded, furthermore, the 
exclusive right of the fur trade of Canada. The 
arms of this sovereign company represented the effigy 
of an old river-god leaning upon a horn of plenty. 

The capital furnished by the stockholders was one 
hundred million francs. It was divided into two 
hundred thousand shares of five hundred francs each. 
These shares were issued in the form of a note to the 
holder, and were transferable by a simple indorse 
ment. To all these arrangements Law added 
another very important one, with the double design 
of insuring a market for the shares and of raising 
the national credit. We have seen that the royal 
stocks of all kinds had been converted into two hun 
dred and fifty millions of state notes, which were at 



62 MEMOIR OF JOHN LAW. 

a discount of seventy or eighty per cent., and that 
it was impossible to pay them from the treasury. 
Law caused to be inserted in the edict a clause by 
which the shareholders were authorized to pay one- 
quarter in money and three-quarters in state notes. 
Twenty-five millions of specie being sufficient for 
the first works of the company, seventy-five mil 
lions of state notes thus found an advantageous out 
let, which could not fail to relieve immediately the 
one hundred and seventy-five millions which 
remained in the market. The treasury would con 
tinue to pay the four per cent, interest allowed on 
state notes, which made three millions payable 
annually by the state to the company. The first 
year these three millions were to be devoted to 
meeting the expenses of the first establishment of 
the company ; the following years they were to be 
divided among the shareholders with the profits of 
the commerce. This combination had the following 
effect : the government abandoned to one part of its 
creditors the sovereignty and commerce of Louisiana 
and Canada, on the condition that they should 
advance twenty-five millions in cash toward the 
establishment of the new colony. 

The shares of the "Western Company did not, at 
first, produce much excitement, except among those 
capitalists who held state notes. The public, gene- 



VALUE OF THE SHARES. 63 

rally, remained indifferent, notwithstanding the 
marvellous things which were related of the terri 
tory which had been ceded to the company. The 
shares were sold below par, which was perfectly na 
tural, as they had been paid for by twenty-five mil 
lions of money and seventy-five millions in notes, 
which were worth at most twenty-five millions the 
whole capital then represented only fifty millions in 
fact, and of course the shares were below par not 
unlike a good deal of our present bank capital, 
which is credit and credit only. However, they had 
contributed to raise the credit of national securities. 
The bank bought a certain number of them, and in 
vested its capital of six millions in shares of the 
"Western Company. 

Law promptly commenced the initiatory steps for 
the establishment projected in America. Vessels 
were armed, troops were embarked, prostitutes and 
vagabonds were collected in order to send them to 
those solitudes which it was attempted to people. 
Grants of land were made, and Law rallied, even 
from the interior of Germany, farmers who went to 
Brest to embark. (JSToTES 1, 2, 3.) 

Law gained daily upon the esteem of the regent, 
a prince passionately fond of everything ingenious 
and brilliant, and reduced by immediate distress 
to sustain himself by a mere chimera. 



64: MEMOIR OF JOHN LAW. 

The Council of Finance witnessed the increasing 
influence of Law with jealousy, and the Duke of 
JSToailles, president of the council, who had always 
advocated economy by opposing the hazardous ex 
periment of a system of credit, gave in his resigna 
tion. He was succeeded by M. d Argenson, former 
chief of police a bold, adroit man, devoted to 
the regent, but- unskilled in financial matters. 
Law encountered still another opposition no lees 
than that of the parliament. This body had 
thought that, with an actual minority, they had yet 
an opportunity to recover the importance which 
they had lost under Louis XIV. It harassed the 
regent by annoyance of every description, and tes 
tified^ above all, the liveliest hostility to the Scotch 
financier.. The hatred of novelties, natural to an 
antiquated body, was not the only cause of this hos 
tility. Law had said openly, that by his credit sys 
tem, he would render the court independent of par 
liaments, by relieving them from the necessity of 
extraordinary taxes. He had even added that he 
would furnish the regent with means of repay 
ing the expenses of the courts. To the views 
of strict prudence, then, were joined some en 
tirely personal motives of hostility to Law, and they 
determined to fulminate a decree against his grow 
ing system. 



HOSTILITY OF PARLIAMENT. 65 

Parliament did not know how to commence pro 
ceedings against the Western Company. There 
were no good reasons against the establishment of 
a commercial company. It decided to strike 
at the bank, against which, however, there was 
much less to say, at least in the condition in which 
it then was. Established in May, 1716, during 
a year and a half it had rendered real service 
to the credit of the state ; having become a 
general bank in April, 1717, it had during five 
months circulated its notes throughout France. It 
was the decree which ordered the receipt of bank 
notes in payment of taxes, and which enjoined all 
the treasurers to pay specie for them at the demand 
of the holders, which parliament resolved to annul. 
By an act of the 18th of August, 1717, it repealed 
the enacting part of the decree, and forbade the 
receiving officers of the government to receive the 
notes of Law s bank. 

The regent, who had many demands to make of 
parliament whether on the subject of the legiti 
mate princes or on that of finances, resolved to sum 
mon them to the royal presence. The infant king 
was brought from Yincennes to Paris and parlia 
ment, obliged to come on foot to the Louvre, 
yielded to everything which the will of the regent 
imposed upon them. The act against the bank was 



66 MEMOIR OF JOHN LAW. 

annulled ; it was decided, besides, that, in future, 
parliament s remonstrance against the royal decrees 
must be made within eight days, after which delay 
the decree should be enrolled and registered. Par 
liament submitted, and Law was at liberty to con 
tinue his operations. During the latter part of the 
year 1717 and the beginning of 1718, everything 
remained in statu quo. The bank continued to ren 
der undisputed services to public and private credit, 
and as to the Western Company, it was making pro 
gress in etablishing itself. The shares of the com 
pany rose slowly, and were still below par ; but it 
was evident that Law, now in high favor, would 
soon make himself absolute master of the finances. 
M. d Argenson, in his turn had become jealous of 
the powerful Scotchman, and he meditated an at 
tack upon the Western Company. At this time 
there were three brothers engaged in commerce 
named Paris, well known by their vast fortune, 
their successful speculations, and their intimate con 
nection with Yoltaire, They were from Grenoble, 
shrewd, active, and universally esteemed. M. d Ar 
genson established a secret alliance with them, and 
they formed what was called the anti-system. The 
collection of one part of the public revenue was 
still leased, consisting of the tax on salt, on the 
registration of laws, on expenditures, etc., etc. ; and 



FARMING THE REVENUE. 67 

it was these different collections united, which had 
been granted to an association of financiers, with 
the title of Farmers General. M. d Argenson put 
them up at auction anew, and had them declared 
to the Paris Brothers, under the name of d Aymard 
Lambert, for the annual sum of forty-eight millions 
five hundred thousand francs. The capital stock 
for this enterprise of collecting the revenues was 
fixed at one hundred millions, like that of the 
Western Company, and divided into shares of the 
same form and value. There was promise of large 
dividends on these shares, for the profits of the col 
lections were estimated at thirteen or fourteen mil 
lions, which would make twelve or fifteen per cent, 
on the capital paid in ; besides, this dividend was 
insured, because it was founded, not upon the con 
tingent successes of commerce, but upon the certain 
collection of the national revenues. In reality these 
shares were more dear, for instead of being payable 
in state notes, which were at seventy-five per cent, 
discount, they were payable in good securities ; but 
their income was so great and so certain that they 
were sure to have the advantage over the Western 
shares. They obtained it, in fact, and soon they 
were in great demand in the market, under the name 
of stock in the anti-system. 
The popularity of the bank continued constantly 



68 MEMOIK OF JOHN LAW. 

to increase, nevertheless ; the shares of the Western 
Company did not rise much, but remained much 
below par, while the shares of the anti-system were 
very much sought. Law* was not discouraged, and 
counted upon the achievement of his plan to 
triumph over the brothers Paris. At first he 
changed the bank from a private to a public esta 
blishment, as he had always intended to do. The 
4th of December, 1718, two years and a half after 
its creation, it was declared to be the Royal Bank. 
Law was appointed director of it; the original 
capital was repaid to the shareholders in specie. In 
January, February, March and April, the increas 
ing demand for notes caused an increase of the issue 
to one hundretl and ten millions. They were dif 
fused throughout France, and, to make the use of 
them" still more universal, the transportation of coin 
between towns where there were offices of the bank 
was forbidden. The remittances between these 
towns must be made in bank notes. This forced 
measure would have been dangerous if confidence 
had not been absolute. It was attributable to the 
impatience for success which characterized the 
disposition of Law. (NOTES 4, 5, 6.) 

Law revolved in his mind many other projects 
relating to his Western Company. He spoke, at 
first mysteriously, of the benefits which he was pre- 



OPERATING FOR A "RISE." 69 

paring for it. Associating with a large number of 
noblemen, whom his wit, his fortune, and the hope 
of considerable gains attracted around him, he 
urged them strongly to obtain for themselves some 
shares, which, he asserted, would soon rise rapidly 
in the market. He was himself soon obliged to buy 
some above par. The par value being five hundred 
francs, two hundred of them represented at par a 
sum of one hundred thousand francs. The price 
for the day being three hundred francs, sixty thou 
sand francs was sufficient to buy two hundred 
shares. He contracted to pay one hundred thou 
sand francs for two hundred shares at a fixed future 
time ; this was to anticipate that they would gain 
at least two hundred francs each, and that a profit 
of forty thousand francs could be realized on the 
whole. He agreed, in order to make this sort of 
wager more certain, to pay the difference of forty 
thousand francs in advance, and to lose the differ 
ence if he did not realize a profit from the proposed 
transfer. This was the first instance of a sale at an 
anticipated advance. This kind of trade consisted 
in giving earnest money, called a premium, which 
the purchaser lost if he failed to take the property. 
He who made the bargain had the liberty of re 
scinding it if he would lose more by adhering to it 
than by abandoning it. No advantage would ac- 



70 



MEMOIR OF JOHN LAW. 



crue to Law for the possible sacrifice of forty thou 
sand francs, unless, at the designated time, the 
shares had not been worth as much as sixty thou 
sand francs, or three hundred francs each ; for hav 
ing engaged to pay one hundred thousand francs for 
what was worth only fifty thousand, for instance, 
he would suffer less to lose his forty thousand francs 
than to keep his engagement. But, evidently, if 
Law did wish by this method to limit the possible 
loss, he hoped nerertheless not to make any loss at 
all ; and, on the contrary, he believed firmly that 
the two hundred shares would be worth at least the 
hundred thousand francs, or five hundred francs 
each, at the time fixed for the expiration of the con 
tract. This large premium attracted general atten 
tion, and people were eager to purchase the Western 
shares. They rose sensibly during the month of 
April, 1719, and went nearly to par. Law disclosed 
his projects; the regent kept his promise, and 
authorized him to unite the great commercial com 
panies of the East and West Lidies. 

The two companies of the East Indies and of 
China, chartered in 1664 and 1713, had conducted 
their affairs very badly : they had ceased to carry 
on any commerce, and had underlet their privileges 
at a charge which was very burdensome to the 
trade. The merchants who had bought it of them 



THE INDIAN COMPANY. 71 

did not dare to make use of their privileges, for 
fear that aeir vessels would be ^seized by the 
creditors of the company. Navigation to the 
East was entirely abandoned, and the necessity of 
reviving it had become urgent. By a decree of 
May, 1719, Law caused to be accorded to the West 
India Company the exclusive right of trading in all 
the seas beyond the Cape of Good Hope. From this 
time it had the sole right of traffic with the islands 
of Madagascar, Bourbon and France, the coast of 
Sofola in Africa, the Red Sea, Persia, Mongolia, 
Siam, China and Japan. The commerce of Senegal, 
an acquisition of the company which still carried 
it on, was added to the others, so that the company 
had the right of French trade in America, Africa 
and Asia. Its title, like its functions, was enlarged ; 
it was no longer called the West Indian Company, 
but the INDIAN Company. Its regulations remained 
the same as before. It was authorized to issue 
another lot of shares, in order to raise the necessary 
funds either to pay the debts of the companies 
which it succeeded or for organizing the proper 
establishments. Fifty thousand of these shares 
were issued at a par of five hundred francs, which 
made a nominal capital of twenty-five millions. 
But the company demanded five hundred and fifty 
francs in cash for them, or a total of twenty-seven 



72 MEMOIR OF JOHN LAW. 

millions two hundred and fifty thousand francs, inas 
much as it esteemed its privileges as very great and 
its popularity certain. It required fifty francs to 
be paid in advance, and the remaining five hundred 
in twenty equal monthly payments. In case the 
payments should not be fully made, the fifty francs 
paid in advance were forfeited by the subscriber. 
It was nothing but a bargain made at a premium 
with the public. 

The prompt realization of the promises of Law, 
the importance and extent of the last privileges 
granted to the company, the facilities accorded to 
the subscribers, everything induced a subscription 
to the new shares. The movement became ani 
mated. One could, by the favorable terms offered, 
by paying out five hundred and fifty francs, obtain 
eleven shares instead of one, and thus, with a little 
money, speculate to a considerable amount. To this 
method of attracting speculators, Law added ano 
ther he procured a decision that no one should 
subscribe for the new shares without exhibiting four 
times as many old ones. It was necessary, there 
fore, to hasten to obtain them, in order to fulfill the 
requisite condition. In a short time they were car 
ried up to par, and far above that. From three 
hundred francs, at which they were at the start, they 
rose to five hundred, five hundred and fifty, six 



EECOINING THE SPECIE. 73 

hundred, and seven hundred and fifty francs that 
is, they gained one hundred and fifty per cent. 
These second shares were called the daughters, to 
distinguish them from the first. 

Law, still entirely absorbed by the desire of van 
quishing the anti-system, thought only of adding 
new privileges to those which the Indian Company 
already enjoyed. There were great profits to be 
made by the recoining of the specie. The reader 
will remember that the regent had ordered the 
recoining of a billion of specie, and the reissue 
of it for twelve hundred millions ; there would be, 
therefore, a gain of two hundred millions. A small 
part of the coin had yet been brought in, and almost 
all the profit still remained to be made, except that 
which was absorbed by the counterfeiters. By a 
new decree of the 25th of August, 1719, Law caused 
to be granted to the Indian Company the coining 
and management of the specie. The company 
paid fifty millions for this new privilege. The 
good natured and prodigal regent needed this sum 
for the expenses of the government and of the 
court. To enable the company to pay for this, it 
was authorized to create fifty thousand more new 
shares, at five hundred francs each, which would 
have produced only twenty-five millions. Never 
theless, depending upon the enthusiasm of the pub- 



MEMOIB OF JOHN LAW. 



lie, they were issued, not for five hundred and fifty 
francs, like the last, but for one thousand francs, in 
order to mako^ip the sum due the government. The 
econd issue of shares was called the daughters ; 
the third was nicknamed the grand-daughters. 

The same precautions were taken to insure their 
uecess. The payments were to be made during 
twenty months. To procure one of the new shares 
it was necessary to have five of the old, and notice 
was given that the subscription books would be 
kept open only twenty days, and that after that 
time all the shares not subscribed for would belong 
to the company. These artifices, entirely novel 
then, produced the greatest excitement. People 
crowded the offices of the company to subscribe for 
the shares at one thousand francs. One circum 
stance contributed very much to excite this eager 
ness. The company announced that it would pay 
semi-annual dividends of six per cent., making an 
annual income of twelve per cent. It was possible 
to fulfill this promise, although it was a very bold 
one. There were two hundred thousand shares of 
the first issue, fifty thousand of the second, and fifty 
thousand of the third, making a total of three hun 
dred thousand. At five hundred francs each they 
formed a nominal capital of one hundred and fifty 
millions. It required eighteen millions to make a 



GKEAT KISE IN THE SHARES. 75 

dividend of twelve per cent, per annum. Now the 
three millions to be paid the company annually, by 
the government, on the seventy-five millions of 
state notes, the probable profit on the coinage, and 
the profits from commerce, might easily produce 
eighteen millions a year. 

The month of August approached. The shares 
rose far above one thousand francs. Those who 
had bought at this price already obtained a con 
siderable advance ; but those who had purchased at 
five hundred, and at three hundred francs, which was 
the case with the first purchasers, gained one and two 
hundred per cent, profit. The creditors of the govern 
ment, who had bought the first shares only to make 
use of their state notes, and who were rejoiced not 
only to recover the whole value of property which 
they had considered lost, but to see it doubled, has 
tened to sell, and to realize their unexpected profit. 
The speculators, more wary, held on to their shares, 
bought instead of sold, and thought in this way to 
lay the foundation of large fortunes. 

There was, between the St. Denis and St. Martin, 
a street named Quincampoix, which had always 
been inhabited by bankers and brokers. There was 
not then at Paris, as at London and Amsterdam, an 
exchange, where business men assembled to trade 
in merchandise or public stocks. People used to 



76 MEMOIR OF JOHN LAW. 

go to the bankers in the rue Quincampoix to nego 
tiate bills and speculate in the different stocks 
issued by the treasury. Since the ruinous wars of 
Louis XIY. had obliged trade to be earned on by 
credit, there had arisen in Paris a class of traders 
in notes accepted by the debtor upon whose obli 
gations they speculated. Needy debtors produce 
usurers in the same way that unpunctual govern 
ments produce stock-jobbers. All doubtful securi 
ties seem most to attract the venturesome speculator ; 
he delights in such hazards, having the morality, as 
well as manners, of the gambler. Paris swarmed 
with these men, of whom some had made fortunes, 
while others were awaiting the opportunity to do 
so, and, while waiting, lived by their wits. As at 
this time there were no professional stock-brokers, 
some of these hucksters had set up counters in the 
rue Quincampoix, and bought and sold the stocks 
in the market on others account. Since the organ 
ization of these new companies the Indian and 
that of Farmers of the Revenue these offices were 
much frequented, and even the speculators, being 
unable to withstand this tendency, had ended by 
resorting to the rue Quincampoix, where they col 
lected in numerous groups. There, newp which 
could affect the rise and fall of stocks was retailed, 
and shares were offered and sought. 



THE " SYSTEM " TRIUMPHANT. 77 

There was a division among these brokers. Some 
pronounced themselves for Law s system, others 
against it. One of the most influential among them, 
named Leblanc, had joined the brothers Paris 
against Law. The Prince of Conti who, at first, 
had been shown partiality in the subscriptions, but 
whom Law had been compelled to deny because of 
his exorbitant demands had joined the opponents 
of what was called the " system." They combined 
their means, procured a large quantity of bank 
notes, and demanded the specie. Law, being 
-warned in season, paid those presented, first, and, 
to evade the others, he had recourse to a violent 
measure, which the dishonorable proceeding of his 
opponents accounts for without justifying. He pro 
cured a decree reducing the value of coin after a 
certain day. Those who hoarded specie, not wish 
ing to submit to this reduction, hastened to deposit 
it in the bank. The entire public declared itself in 
favor of Law, and the Prince of Conti was the 
object of universal condemnation. 



1STOTES TO CHAPTEE HE. 

(1.) THE regions watered by the Mississippi, im 
mense, unknown virgin solitudes which the imagin 
ation filled with riches, was an unlimited field 
offered to charlatanism. The public credulity was 
tested with rare impudence. Large engravings 
were distributed representing the arrival of the 
French at the river, and savages with their squaws 
rushing to meet their new masters with evident res 
pect and admiration. The description set forth 
that there were mountains filled with gold, silver, 
copper, lead and quicksilver. As these metals 
were very common and the savages did not suspect 
their value, they exchanged gold and silver for 
knives, saucepans, brooches, little looking-glasses, 
or even a glass of brandy. One of the peculiarities 
of the engraving was the address to the religious. 
The aborigines were falling at the feet of the Jesuit 
priests and the legend recited that the idolatrous 
Indians eagerly demanded to be baptized. Great 
care was taken to educate their children. One old 
soldier named Cadillac, formerly employed in 

78 



NOTES TO CHAPTER III. 79 

Louisiana, was so imprudent as to say that it was 
all humbug. His silence was secured by sending 
him to the Bastile. COCHUT. 

(2.) Unimproved parts of Louisiana were sold for 
thirty thousand livres the square league. WOOD. 

(3.) In order to make as much as possible out of 
the Mississippi, to say nothing of the jugglery prac 
tised, it was attempted to follow the example of the 
English, and create some efficient establishments in 
those vast regions. To people them, vagabonds, 
stout beggars, male and female, and a quantity of 
" public creatures " were taken from Paris and the 
rest of the kingdom. SAINT SIMON. 

(4.) 1718. The form of the notes was changed to 
"The bank promises to pay the bearer at sight 
livres in silver coin value received," thus mak 
ing their value fluctuate with that of the coin. Law 
opposed this. WOOD. 

(5.) After the success of the bank was established 
the Duke of Orleans took it into his own hands 
against the wishes of Law. The General Bank was 
converted into the Royal Bank (1718) the king be 
coming responsible for the outstanding notes. 
WOOD. 



80 MEMOIR OF JOHN LAW. 

(6.) The conversion of the General Bank into the 
Koyal Bank the first of January 1719, was, said an 
excellent judge, to take away from its engagements 
the limited but real guaranty of an effective capital 
and substitute for it the indefinite and doubtful 
capital of a government very much involved. 

COOHTJT. 



CHAPTER IV. 

The national debt Law s project for redeeming it Caution neces 
sary in executing the project The collection of the revenue 
granted to Law s company Arrangements for the assumption of 
the national debt by the company General eagerness to sub 
scribe for the shares The nobility pay court to Law Rage for 
speculation begins Stockjobbing operations of the brokers. 



CHAPTEK IY. 

LAW contemplated at last the completion of his 
project, by uniting the collection of the revenues 
to the other privileges of the Indian Company, and 
redeeming the national debt. This was the greatest 
and most difficult part of his plan. Of these two 
measures, the first would destroy the anti-system and 
give the indirect administration of the revenues 
to the Indian Company ; the second had been pro 
mised to the regent, and would free the government 
from its overwhelming burdens. 

The national debt was fifteen to sixteen hundred 
millions, partly in contracts for perpetual annuities, 
partly in state notes which would soon be due. The 
interest on the debt was eighty millions, or one half 
the revenue of the government. Some com 
bination was necessary to meet the state notes 
at their maturity, and to reduce the annual 
charges which the public treasury could no longer 
sustain. 

Law conceived the idea of substituting the com 
pany for the government and converting the whole 



84: MEMOIR OF JOHN LAW. 

national debt into shares in the Indian Company. 
To accomplish this, he wished the company to lend 
the Treasury the fifteen to sixteen hundred millions 
which would redeem the debt ; and that, to obtain 
this enormous sum, it should issue shares to that 
amount. In this manner the fifteen or sixteen hun 
dred millions furnished to the government by the 
company, and paid out by the government to its 
creditors, must return to the company by the sale 
of its shares. Let us see the means which Law had 
devised to insure the success of his scheme. The 
government would pay three per cent, interest for 
the sum loaned to it, which would make forty-five 
or forty-eight millions a year. The treasury would 
thus effect an annual saving of thirty-two or thirty- 
five millions in the interest on the debt. In return, 
the collection of the revenue must be transferred to 
the company, notwithstanding that it had been ac 
tually granted to the brothers Paris. The collection 
would pay the collectors a net profit of fifteen or 
sixteen millions. The company, receiving three 
per cent, interest on the capital invested, and reap 
ing from another source a profit of fifteen or sixteen 
millions, would be in a position to pay four per cent, 
on the sixteen hundred millions of the debt con 
verted into shares. 

The profits from commerce and its future success, 



LIQUIDATION OF NATIONAL DEBT. 85 

might soon enable it to increase this dividend. 
According to the prevailing rates of interest, which 
had fallen to three per cent, since the establish 
ment of the bank, this was a sufficient remunera 
tion on the shares. They had, beside, the hope 
of increasing their capital. The shares having, 
in fact, doubled in value during the opposition of 
the anti-system, they ought to increase still more 
rapidly since they were relieved from this opposi 
tion. The expectation that the fifteen or sixteen 
hundred millions of the debt would be invested in 
the shares, was well founded. There was even a 
certainty of it ; for this immense capital, forcibly ex 
pelled from its investment in state securities, could 
find no other place for investment than in the 
company. 

This plan of Law was vast and bold. Its success 
would liquidate the state debt and diminish the an 
nual charges on the treasury, reducing the interest 
from eighty millions to forty-five or forty-eight 
millions. The annual charges, from which the 
treasury was to be relieved, were to be paid from 
the profits on the collection of the revenue, and 
the contingent profits of commerce. The whole 
operation was to pay the creditors of the state 
three per cent, per annum, and the profits and 
monopolies heretofore granted to farmers of the 



86 MEMOIR OF JOHN LAW. 

revenue and commercial companies. This three 
per cent, interest, these profits, and these monopo 
lies, as we shall soon see, might easily amount to 
the sum of eighty millions annually which the 
creditors were formerly paid. Thus far they 
were not defrauded by this forced conversion of 
securities ; a credit entirely new was substituted for 
one which was worn out; an establishment had 
been created, which, combining the functions of a 
commercial bank and the administration of the 
finances, must become the most colossal financial 
power ever known. 

But if this plan offered some indisputable advan 
tages, yet the wisest precautions were necessary in 
the execution of. it. In fact, fifteen or sixteen hun 
dred millions suddenly displaced and transferred 
from the state securities to shares in the Indian Com 
pany must be managed with extreme prudence to 
induce these millions to come to the company, and at 
the same time to prevent all precipitation ; to avoid 
either a reluctance or a too great eagerness to buy. 
We shall see what measures were taken to accom 
plish this operation, the most audacious which had 
ever been attempted in finance. 

By a decree of the 27th of August, 1719, the lease 
of the principal revenues was cancelled. They were 
withdrawn from the brothers Paris and granted to 



CONVERSION OF PUBLIC STOCKS. 87 

the Indian Company, who, instead of forty-five mil 
lions five hundred thousand francs a year, agreed to 
pay into the treasury fifty-two millions a year. The 
company promised to lend the government fifteen 
hundred millions, at three per cent. ; this made, 
consequently, forty-five millions due the company 
annually, which it was authorized to deduct from 
the products of the revenue, so that there only 
remained seven millions a year to be paid to the 
government. 

The payment of the different securities was then 
ordered, each in its separate order. The holders of 
the different titles were invited to present them 
selves at the offices of the treasury, where receipts 
would be given them for the value of their claims, 
which receipts they would then present at the offices 
of the company who would pay the amount of them 
in specie or in bank notes. It had been agreed that 
a sufficient quantity of notes should be manufac 
tured to make these payments, and that they should 
be destroyed immediately when they were received 
back in payment for the shares. The payment of 
the debt must inevitably be effected before it could 
be converted into shares of the Indian Company. It 
was therefore necessary to make the advance. The 
bank, now a royal institution, was commissioned to 
accomplish this by its notes. 



88 MEMOIR OF JOHN LAW. 

Scarcely were these arrangements made public, 
when an extraordinary animation was everywhere 
manifested. The shares of the farmers of the 
revenue and the state notes being about to disap 
pear, the shares of the Indian Company would be 
the only ones remaining for the speculators ; besides, 
as the debt was to be paid, it was evident that they 
offered an investment which would be eagerly 
sought. They rose with singular rapidity. From one 
thousand and fifteen hundred francs each, they rose 
to two, three, and four thousand francs ; that is, to 
four, six, and eight times the original cost. (NOTE 1.) 

The 13th of September, Law commenced the issue 
of the new shares. There were already three hun 
dred thousand shares of a capital of one hundred 
and fifty millions some issued at five hundred 
francs, others at five hundred and fifty, and the last 
at one thousand. A new issue of one hundred 
thousand shares was ordered, at the nominal price 
of five hundred francs, and at a realized price of 
five thousand francs, which made a nominal capital 
of fifty millions and a fund paid in of five hundred 
millions. It was a third of the sum which the 
company was bound to furnish the government. 
The payment was to be made in ten equal install 
ments, payable monthly. The first was the only 
one demanded in cash. 



PREFERENCE GIVEN TO STATE CREDITORS. 89 

The eagerness to subscribe was prodigious. All 
tlie disposable capital, whether in the hands of the 
brokers or in those of the creditors of the state, was 
invested in the subscriptions. Every one foresaw the 
importance of those shares, which were to be the sole 
investment for the fifteen hundred millions, divided 
previously in the public debt into different kinds of 
stock, and people rushed to secure them early, in 
order to make the unfortunate state creditors pay 
dear for them. The acquisition of them in large 
amounts was not difficult, as with five thousand 
francs, ten shares could be subscribed for. (NOTE 2.) 

The creditors, seeing themselves deprived of their 
investment, complained, with reason, that they had 
not the preference over every other class of subscri 
bers. Law, perceiving the mistake he had made, pro 
cured a decree the 26th of September, thirteen days 
after the opening of the subscription books, ordering 
the payment for the shares to be received only in 
state notes or in receipts. This insured the creditors 
the preference, or, what was as well, an advantageous 
sale of their securities to speculators. But this was 
done rather late, as the speculators had already 
secured to themselves a large part of the amount 
issued. This measure, although tardy, had still 
another advantage, it relieved the treasury from 
paying the advance on the redemption of the debt 



90 MEMOIR OF JOHN LAW. 

in bank notes. Instead of exchanging the receipts 
for notes and the notes for shares, the receipts were 
taken directly to the office for receiving sub 
scriptions. The proceeding was thus simplified, 
and the transient issue of an enormous number of 
notes was avoided. 

The first subscription having been taken up in a 
few days, Law opened a new one on the 28th of 
September, for the same amount and on exactly the 
same conditions as the preceding. 

The eagerness of subscribers was the same. The 
creditors passed whole days at the offices of the 
treasury to obtain their receipts, and there were 
some even who had their meals brought to them 
there, so that they might not lose their turn in the 
ranks. The state notes were, of course, much in 
demand, and had rapidly risen to par. They had 
even given rise to a most reprehensible speculation. 
A confidential clerk of Law, the Prussian Yersino- 
bre, having known in advance of the decree regard 
ing the payment, abused his knowledge of the secret, 
and caused to be bought by brokers with whom he 
was associated, a large amount of state notes at fifty 
or sixty per cent, below their nominal value, and 
employed them for the subscriptions when they were 
received at par. When it is considered that the 
subscriptions, already, were sold at a large advance, 



EAGEENESS TO SUBSCRIBE. 91 

and that by means of the state notes they were bought 
at about half price, it will be understood what a 
profit this company of brokers must have realized. 
Those who intended to subscribe had accom 
plished comparatively little by obtaining receipts or 
state notes ; it was still necessary to go to the Hotel 
de Severs, where the subscriptions were received. 
The entrances there were crowded to suffocation. 
The hall servants made considerable sums by sub 
scribing for those who could not get through the 
crowd to the offices. Some adventurers, assuming 
the livery of Law, performed this service, charging 
and obtaining a very large fee. The most humble 
employees of the company became patrons who 
were very much courted. As to the higher officers, 
and Law himself, they received as much adulation 
as if they were the actual dispensers of the favors 
of fortune. The approaches to Law s residence were 
encumbered with carriages. All that was most 
brilliant among the nobility of France came to beg 
humbly for the subscriptions, which were already 
much above the nominal price of shares, and which 
were sure to rise much higher. By a clause of the 
decree creating the company, the ownership of the 
shares entailed nothing derogatory to rank. The 
nobility, therefore, could indulge in this speculation 
without endangering its titles. It was as much iu 



92 MEMOIR OP JOHN LAW. 

debt as the king, thanks to its prodigality and the 
long wars of that century, and it sought to win, at 
least, the amount of its debts by fortunate specula 
tions. It surrounded, it fawned upon Law, who, 
very anxious to gain partisans, reserved very few 
shares for himself, but distributed them among his 
friends of the court. (NOTE 4.) 

The new subscription was also taken up ,in a few 
days. If we reflect that fifty millions in cash was 
sufficient to secure five hundred millions of each 
issue, we shall understand how the state notes which 
remained in the market, and the receipts already 
delivered, would suffice to monopolize the shares 
offered to the public. The creditors who had not 
liquidated their claims, and the greater number had 
not, could not avail themselves of the right to sub- 
scribejbr shares, and were obliged to buy them in 
the market at an exorbitant price. The shares 
subscribed for at the Hotel de Severs for five thou 
sand francs, were resold in the rue Quincampoix 
for six, seven, and eight thousand francs. To the 
need of having some of this investment, was joined 
the hope of seeing the shares rise in the market to 
an indefinite extent, and it is not surprising that 
the eagerness to obtain them soon increased to 
frenzy. In order to satisfy this demand, a third sub 
scription was opened on the second of October, 



MOMENTARY FLUCTUATION. 93 

three days after the second. Similar in every res 
pect to the first two, it ought to bring in a capital 
of five hundred millions and complete the fifteen 
hundred millions which the company needed to 
redeem the public debt. 

The concourse of people was as great as ever at the 
treasury where the receipts were given, and at 
the Hotel de JSTevers, where the applications for 
shares were received. The occasion of this eager 
ness is evident, since that which was obtained 
at the Hotel de Severs for five thousand francs was 
worth seven and eight thousand in the rue Quin- 
campoix. This new issue at five thousand francs 
caused the rates in the rue Quincampoix to dimin 
ish ; in an instant they were below five thousand 
francs even as low as four thousand so blind 
were these movements, and, so to speak, con 
vulsive, doiring this period of feverish excitement. 
There was no possible reason for selling in one place 
for four thousand francs, that for which they 
paid five thousand at another. But this pheno 
menon lasted only a few hours ; the rates rose 
again rapidly, and the subscription being taken 
up, the shares sold again for seven and eight thou 
sand francs. The crafty brokers had already 
had two opportunities of making some profitable 
operations. 



94: MEMOIR OF JOHN LAW. 

Having obtained the state notes at a very 
small price, they procured shares at the most 
moderate rates, between five hundred and a thou 
sand francs ; then they sold them for from 
seven to eight thousand francs; and the second 
of October, the day of the decline, they repurchased 
them for four thousand, to sell them again the next 
day for seven or eight thousand. It will be seen 
how they must have made money, with these op 
portunities. 

It was no longer a few scattered groups which 
were seen in the rue Quincampoix, but a compact 
crowd engaged in speculating from morning till 
night. The subscriptions had been divided into 
coupons, transferable, like notes, to the bearer by 
an indorsement simply formal. During the course 
of October the shares had already risen above ten 
thousand francs, and it was impossible to know 
where they would stop. (NOTE 3.) 



NOTES TO CHAPTER IV. 

SITUATION OF FBANCE. 

(1.) 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 pro 
vide 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 blamable. While the affairs of the bank 

95 



yb MEMOIR OF JOHN LAW. 

were under his control, the issues had never 
exceeded sixty millions. Whether Law opposed 
this 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 
change of system upon the regent. MACKAY. 

(2.) 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. 
MACKAY. 

(3.) The situation of France, in November, 1719, 
is thus described by a contemporary writer : " The 
bank notes were just so much real value which 
credit and confidence had created in favor of the 
state. Upon their appearance, plenty immediately 
displayed herself through all the towns and all the 
country; she relieved our citizens and laborers 
from the oppression of debts which indigence had 
obliged them to contract ; she enabled the king to 
liberate himself from great part of his debts, and to 
make over to his subjects more than fifty-two mil 
lions of livres of taxes which had been imposed in 



PROSPERITY PRODUCED BY BANK. 97 

the years preceding 1719 ; and more than thirty- 
five millions of other duties extinguished during the 
regency. This plenty sunk the rate of interest, 
crushed the usurer, carried the value of lands to 80 
and 100 years purchase, raised up stately edifices 
both in town and country, repaired the old houses 
which were falling to ruin, improved the soil, 
gave an additional relish to every fruit produced 
by the earth. Plenty recalled those citizens whom 
misery had forced to seek their livelihood abroad. 
In a word, riches flowed in from every quarter; 
gold, silver, precious stones, ornaments of every 
kind which contribute to luxury and magnificence, 
came to us from every country in Europe. Whether 
these prodigies or marvellous effects were produced 
by art, by confidence, by fear, or by whim, if you 
please, one must agree, that that art, that confi 
dence, that fear, or that whim, had operated all 
these realities, which the ancient administration 
never could have produced. Thus far the system 
had produced nothing but good; everything was 
commendable and worthy of admiration. WOOD. 



To the eyes of the wondering crowd, the 
author of such prodigies was, during some time, a 
chimerical being, superhuman, a demigod in whose 
honor a sort of worship was cultivated. The Aca- 

5 



98 MEMOIR OF JOHN LAW. 

demy of Science elected him one of its members. 
As lie passed through the streets people cried, 
" Long live the King and Monseigneur Law !" He 
was overwhelmed with supplicating flatteries in 
prose and verse. His very servants were courted, 
and gentlemen assumed his livery to introduce 
themselves into the bank or to have more credit in 
the rue Quincampoix. Women, sad to relate, distin 
guished themselves by their adulations and base 
ness. The regent s mother wrote to a friend that 
" Law was so beset that he had no repose, night or 
day. A duchess kissed his hand before a crowd of 
people. If a duchess will kiss his hand, what will 
not other women kiss ?" Like Midas, whose touch 
converted everything into gold and almost caused 
him to die of hunger, the financier no longer had 
time to live. Badgered in every saloon where he 
showed himself, pursued in the streets, tracked to 
his private apartments by women who intruded 
themselves by force or by fraud, and waited day 
and night till they met their victim, poor Law saw 
countesses and marquesses ready to spring upon 
him at times when decency even required a solitary 
retirement. COCHUT. 



CHAPTER V. 

Mistake in the details of the execution of Law s project New privi 
leges granted to the company Speculation attracts all classes 
and affects all kinds of business Foreigners arrive Tricks of 
the brokers Fortunes made in a few hours Actual value of the 
shares Law idolized Anecdotes His conversion Courted by 
foreign governments Continued success of the bank Excessive 
luxury of speculators Income of the company. 



CHAPTEK Y. 

FEW explanations are necessary to expose the 
mistake committed by Law in the execution of his 
project. Nothing was more admissible or more 
practicable than the conversion of the whole capi 
tal of the public debt from one kind of stock to 
another. The state might make a saving by doing 
so, and the creditors could lose nothing ; but the 
greatest precautions were necessary to accomplish 
this conversion without confusion or disorder. Unfor 
tunately none of these precautions were taken, and 
we are overwhelmed with astonishment at the 
manner in which Law conducted this important 
operation. He had first advertised the redemption 
of the public debt by the Indian Company ; he had 
suffered the shares to rise as high as five thousand 
francs, so that the holders of the first made ten to 
one on their capital, and what they obtained for 
five hundred and a thousand francs the creditors of 
the state paid five thousand for. He had then de 
cided to open new subscriptions, and opened them 
before the creditors had taken their receipts, and 



101 



102 MEMOIR OF JOHN LAW. 

consequently before their securities were in a dis 
posable form. He had then granted such terms 
that those who were* most alert had the advantage 
of the others, and one hundred and fifty millions 
sufficed to engross the stock of fifteen hundred mil 
lions. Then Law had offered the subscriptions at 
three different times, as if he wished to stimulate 
the eagerness to buy by satisfying it only lit 
tle by little. With such management it was 
natural that the subscriptions should be snatched 
at, and that the movement, which should have 
been quiet and steady, became precipitate and 
violent. 

The precautions which ought to have been taken 
are obvious. The shares should not have been suf 
fered to rise to five thousand francs, for this per 
mitted the holders of the first shares to make an 
unfair profit at the expense of the creditors of the 
state. The subsequent subscriptions should not have 
been opened before all the receipts had been deliv 
ered, so that not one of the creditors should have 
cause to complain. It should have been declared 
also, on the first day, that receipts and state notes 
alone would be received in payment for shares, 
so that speculators who had none of the public debt 
should not have the power of taking shares without 
first purchasing securities from the actual creditors 



A GKEAT MISTAKE. 103 

of the state. Lastly, in order to give all the cre 
ditors an opportunity to subscribe, the right of 
paying by installments should not have been 
granted ; this would have prevented the fifteen 
hundred millions of stock being taken up with one 
hundred and fifty millions of capital. 

None of these precautions were taken, as we 
have just seen. The reason assigned for granting 
the right of payment by installments was that the 
claims of creditors could not all be liquidated im 
mediately it must be done gradually. This rea 
son would have been sound if each creditor paying 
for his shares by installments of one-tenth, accord 
ing to the terms of subscriptions, had received his 
receipts in the same proportion. But each creditor 
received the whole of his claim at once, and thus 
the first comer had an advantage. Beside, the 
state notes, all transferable and in the market, had 
an immense advantage over the receipts, which oc 
casioned, as we have seen, some fraudulent transac 
tions. The requirement that the payment should 
be made in receipts, or in state notes, was offered 
in excuse, because it must sooner or later bring the 
shares or their value into the hands of the creditors, 
since the subscribers would be compelled to buy the 
receipts of the creditors at a price proportionate to 
the price of the shares, or to abandon the shares to 



104 MEMOIR OF JOHN LAW. 

them at a reduced rate for want of the necessary 
paper to purchase with. This would be a good ex 
cuse if the provision had been adopted the first day ; 
but when it was thought of, a disordered movement 
was already produced in the price of the shares, 
and there was no means either of arresting or mode 
rating the agitation. 

None of these much-needed precautions were 
taken. Law, absorbed by the obstacle to be over 
come in order to insure the success of his plan, 
aimed only to dazzle the world by a prodigious 
success, and had done everything to stimulate 
subscribers, instead of doing everything to restrain 
them. 

This dangerous success went on constantly in 
creasing to the end of October and beginning of 
November of 1719. Law, carried away as much as 
the public, neglected nothing to enlarge the func 
tions of the company. He had the revenue on 
tobacco assigned to the company for one hundred 
millions in addition to what it had lent to govern 
ment, and which served to redeem four millions of 
pensions secured upon this revenue. The company 
receiving only three per cent., or three millions, it 
was a saving of a million to the government. The 
regent took the occasion of this economy to abolish 
the duties on tallow, oil, fish, etc., which gave great 



EXCITEMENT OF THE PARISIANS. 105 

joy to the people of Paris and singularly increased 
the popularity of the system. 

It was no longer only the professional speculators 
and creditors of the government who frequented 
the rue Quincampoix, all classes of society mingled 
there, cherishing the same illusions noblemen, 
famous on the field of battle, distinguished in the 
government churchmen, traders, quiet citizens, 
servants whom their suddenly acquired fortune had 
filled with the hope of rivalling their masters. All 
the houses in the street had been converted into 
offices by the stock-jobbers ; the occupants gave up 
their apartments, the merchants their shops ; houses 
which had brought a rent of seven or eight hundred 
francs were cut up into some thirty offices, and 
brought fifty or sixty thousand francs ; stock 
jobbing made itself felt in rents as in securi 
ties. A cobbler who had converted his stall into 
an office by placing in it some stools, a table and 
a writing-desk, rented it for two hundred francs 
a day. (NOTES 4, 510.) 

The shops had been changed into cafes and 
restaurants ; a portion of the Parisians had almost 
transferred their residences to this quarter; they 
came there at daybreak, breakfasted there, dined 
there, and, when the fever of speculation had sub 
sided, passed the afternoon at cards. Numerous 

5* 



106 MEMOIR OF JOHN LAW. 

equipages, awaiting their owners, obstructed the 
streets of St. Denis and St. Martin, parallel to the 
rue Quincampoix. 

A large number of provincials and foreigners 
were added to the population of Paris, especially 
those from the important cities of Europe. Many 
did not dare to operate for themselves, either from 
timidity or from want of experience, and they em 
ployed the intrepid brokers formed under the last 
reign to operate for them. These brokers had 
organized themselves into regular swindling com 
panies. They speculated upon the constant rise, 
but more often still upon the fluctuations which 
they had the skill to produce. They ranged them 
selves in a line in the rue Quincampoix, ready to 
act at the first signal. At the sound of a bell in the 
office of a man named Papillon, they offered, all at 
once, the shares, sold them, and effected a decline. 
At a different signal, they bought at the lowest 
price that which they had sold at the highest, and 
in this way brought about a reaction; thus they 
always " sold dear and bought cheap." The fluctua 
tions were so rapid and so considerable, that 
brokers receiving shares to sell had time to make 
large profits by retaining them only one day. One 
is mentioned who, commissioned to sell some shares, 
was absent two days. It- was thought that he had 



A SEA OF SPECULATION. 107 

stolen them. Not at all; lie repaid the price of 
them faithfully, but meanwhile he had made a mil- 
lionfor himself. 

This power which capital had acquired of realiz 
ing such quick profits, had originated a special 
business. Money was lent by the hour and at an 
unexampled interest. The stock-jobbers not only 
found means to pay the interest demanded, but also 
made notable profits for themselves. A million 
francs were sometimes made in one day. It is not 
astonishing, then, that servants became suddenly 
as rich as their masters. One of them, meeting his 
master walking in the rain, stopped his carriage to 
offer him a seat. 

The rue Quincampoix was called the Mississippi. 
Every day industrious mechanics and quiet gentle 
men abandoned their labor or the enjoyment of 
their peaceable competency to embark on this tem 
pestuous sea. Their number constantly increased, 
and in November all were under the fascination of 
this wild illusion. At this time the shares were 
quoted at fifteen thousand francs, or thirty times 
the original price. No one stopped to ask what 
was the foundation of this enormous wealth ; no one 
reflected that paper had no value, except as repre 
senting realities, and that the shares really repre 
sented the following values : 



108 MEMOIR OF JOHN LAW. 

100,000,000 francs for the first issue of shares 

to the number of 200,000 

27,600,000 francs for the second issue of shares 

to the number of 50,000 

50,000,000 francs for the third issue of shares 

to the number of 50,000 

1,500,000,000 francs for the last issue of shares 

to the number of 300,000 



1,677,500,000 francs for the four issues, making 

a total of 600,000 

While the six hundred thousand shares repre 
sented, in fact, the sum of one billion six hundred 
and seventy-seven million five hundred thousand 
francs, they had risen, at the price of fifteen thou 
sand francs, to represent a sum amounting to nine 
billions. Had the commerce of all the Indies ever 
produced profits to justify such a rise in the capital 
and to pay a proportionate interest? Had it, 
for example, produced four hundred and fifty mil 
lions in a year, so as to have paid five per cent., at 
least, upon the capital so suddenly created ? ~No one 
asked himself these questions. Every one seemed 
to think, with Law, that all wealth was in 
money ; that paper could take the place of it, and 
that the shares were really worth their market 
price. 

Law was idolized. The nobility filled his ante- 



UNIVERSAL ENTHUSIASM. 109 

chambers. One of his old friends, being in his pri 
vate apartments, saw him go through some long 
calculations, breakfast, then play at faro, while a 
crowd of noblemen patiently waited for him. There 
was no insolence in this ; but he could not have at 
tended to the indispensable duties of life if he had 
yielded to the universal enthusiasm for him. A 
lady had her carriage overturned beneath his win 
dows to compel him to show himself. Law had 
lost none of his original modesty ; but his wife, less 
intelligent than he, could not conceal the self-con 
ceit of a, parvenu, and manifested impertinently the 
annoyance which the assiduities of her flatterers 
occasioned her. The son of Law was admitted to 
dine with the king, who was the same age; his 
daughter, scarcely eight years old, gave a ball at her 
house. The most brilliant of the nobility sued for 
the honor of an invitation to this fete given by a 
child. The papal nuncio arrived among the first, 
seized the young mistress of the house in his arms, 
and overwhelmed her with caresses. Dukes and 
princes sought the hand of this little girl, scarcely 
out of the cradle. (NOTES 3, T, 8, 9.) 

The regent, charmed like every one else, removed 
M. d Argenson from the Treasury to give it to Law. 
He being a protestant, the Abbe de Tencin was 
commissioned to convert him. The neighboring 



110 MEMOIR OF JOHN LAW. 

governments could not but feel some disquietude at 
the apparent financial power and strength of 
France. England wished to temporize with Law, 
who had retained a lively resentment against his 
own country. The impetuous Stair, the English 
ambassabor, who had offended Law, was recalled. 
Facts like these show the influence which Law com 
manded in France and in Europe. It appears that, 
notwithstanding the superiority of his intelligence, 
he himself shared the general intoxication. He 
purchased estates in France, took no precaution to 
secure a fortune abroad, and there is nothing to 
indicate that he foresaw his sad approaching fate. 
(NOTES 1, 2, 4.) 

While the shares of the company rose so high, 
the notes of the bank had no less success. The 
bank remained still separate from the company. 
The convenience of the notes in the quick transac 
tions of the rue Quincampoix, made them very 
much in demand. Large amounts of gold and sil 
ver were deposited to procure them, and they had 
even come to be worth ten per cent, more than 
coin. The bank had been obliged to issue as much 
as six hundred and forty millions at a time. How 
ever, they were not so generally diffused through 
the provinces as at Paris, because they were not 
needed there for stock-jobbing transactions. Law 



FORCING THE CIRCULATION. Ill 

wished to supply what was wanting to their success 
in the provinces by a decree of the 1st of Decem 
ber, 1719, by which the conversion of gold and 
silver into bank notes was forbidden in Paris and 
authorized in the provinces alone. The revenue 
also must be paid in bank notes, and creditors were 
empowered to insist upon payment in the same 
form. The intention of the edict is apparent; the 
issue of notes being arrested in Paris, where it had 
become excessive, the source from which they were 
obtained was transported to the provinces : beside, 
the collection of the taxes in notes and the power 
given to creditors to demand payment in that money 
must contribute to expand their circulation to the 
remotest extremities of the country. It is true that 
the circulation of the notes was not forced, for that 
would have required every one to receive them ; but 
as they were worth more than specie, the authoriz 
ing everybody to demand them was to oblige every 
body to have them. Thus Law already adopted 
forced measures to extend the success of the bank 
into the provinces. 

The month of December was the time of the 
greatest infatuation. The shares ended by rising to 
eighteen and twenty thousand francs thirty-six 
and forty times the first price. Everything had 
been systematized in the rue Quincampoix. Guards 
were placed at botli extremities of the street; a 



112 MEMOIR OF JOHN LAW. 

commission had been appointed to settle all disputes 
summarily. The concourse of speculators constantly 
increased. People from every quarter rushed to 
this general rendezvous of fortune. Creditors 
brought the sums received from their debtors; pro 
prietors brought the value of their estates, and 
ladies that of their diamonds. The Mississippians 
began to abandon themselves to the pleasures and 
dissipations which attend suddenly acquired fortunes. 
The regent freed from his cares, the nobility believ 
ing itself wealthy, the brokers possessing immense 
quantities of paper, indulged in every kind of 
debauchery. The shops in the rue St. Honore, 
commonly filled with the richest stuffs, were 
emptied ; the cloth of gold had become extremely 
scarce it was seen in the streets worn by all sorts 
of people. An unheard-of number of equipages 
paraded the capital ; the streets St. Denis and St. 
Martin, contiguous to the rue Quincampoix, were 
so blocked up by the carriages of rich Mississip- 
pians that the merchants complained to the regent 
that they seriously interfered with their trade. 
(NOTES 6, 11.) 

So unnatural a state of things could not last long. 
Before Law had made his system complete, before 
he had given the company the last privileges which 
he had designed for it, and had united it with the 
bank, the shares were to suffer a frightful decline. 



FICTION CONTRASTED WITH FACTS. 113 

At the price which they had attained, the six hun 
dred thousand shares represented a capital of ten 
or twelve billions. The only means of sustaining 
this absurd fiction would have been to pay a pro 
portionate interest to the shareholders, and four^ 
&aft millions of income would have been required to 
insure four per cent. only. The income of the com 
pany was as follows : 

From the collection of the national revenue for the 

interest on 1,600,000,000, of the public debt . . 48,000,000 

Profits on farming the revenue 15,000,000 

Profits on the general receipts 1,500,000 

Profits on tobacco 2,000,000 

Profits on coining the money 4,000,000 

Profits from commerce 10,000,000 



Total 80,500,000 

This income would have allowed a dividend of 
five per cent, at most upon the actual capital of one 
billion six hundred and seventy-seven millions. 
How was it possible to provide even a moderate 
income for a capital of ten billions, and thus to give 
it some reality ? 

The exaggeration of the price must cease at the 
moment when the fiction was contrasted with facts, 
and this would be when the shareholders attempted 
to realize their fortune, whether to insure it or to 
enjoy it. 



NOTES TO CHAPTEE Y. 

ANECDOTES OF LAW. 

(1.) Law was now made comptroller general of 
the finances, precisely at the time when it was im 
possible that he could fill the duties of the position ; 
at the period of the subversion of private fortunes 
and the public finances. People saw him converted 
in a short time from a Scotchman to a naturalized 
Frenchman, from a Protestant to a Catholic, from 
a needy adventurer to a lord of magnificent estates, 
from a banker to a minister of state. I have seen 
him arrive in the saloons of the Palais Royal fol 
lowed by dukes, lords, marshals of France and 
bishops. At last, in the same year, Law, loaded 
with public execration, was compelled to fly the 
country which he had wished to enrich and in which 
he had produced such disorders. VOLTAIKE. 

(2.) At this time he was by far the most influen 
tial person of the state. The Duke of Orleans 
had so much confidence in his sagacity and the suc- 

114 



TREATMENT OF THE NOBILITY. 115 

cess of his plans, that he always consulted him upon 
every matter of moment. He was by no means 
unduly elevated by his prosperity, but remained the 
same simple, affable, sensible man that he had 
shown himself in adversity. His gallantry, which 
was always delightful to the fair objects of it, was 
of a nature so kind, so gentlemanly, and so respect 
ful, that not even a lover could have taken offence 
at it. If, upon any occasion, he showed any 
symptoms of haughtiness, it was to the cringing 
nobles who lavished their adulation upon him till it 
became fulsome. He often took pleasure in seeing 
how long he could make them dance attendance 
upon him for a single favor. To such of his own 
countrymen as by chance visited Paris, and sought 
an interview with him, he was, on the contrary, all 
politeness and attention. MACKAY. 

(3.) Peers, whose dignity would have been out 
raged if the regent had made them wait half an 
hour for an interview, were contented to wait six 
hours for the chance of seeing Monsieur Law. 
Enormous fees were paid to his servants, if they 
would merely announce their names. Ladies of 
rank employed the blandishment of their smiles for 
the same object ; but many of them came day after 
day for a fortnight before they could obtain an 



116 MEMOIJK OF JOHN LAW. 

audience. When Law accepted an invitation, lie 
was sometimes so surrounded by ladies, all asking 
to have their names put down in his lists as share 
holders in the new stock, that, in spite .of his well- 
known and habitual gallantry, he was obliged to 
tear himself away par force. MACKAY. 



A British nobleman, who then visited Paris, 
said, in a public advertisement, that Mr. Law 
appeared a minister far above all the past age had 
known, the present could conceive, or the future 
could believe ; that he had established public credit 
in a country that was become a proverb for the 
breach of it ; and that he had shown the French 
people that Louis XIY. was not able, with his 
unlimited authority, to take away more from, than 
he had restored to, them. Madame de la Chaumont 
having been detected in illicit practices against the 
revenue, was drawn out of the scrape by the exer 
tions of one of the contractors for supplying the 
French army with provisions. This acceptable 
piece of service led her to support their interest 
with so much warmth, that she soon found her 
self engaged for them in the sum of 1,400,000 
livres, advanced by herself, and borrowed from 
her relations and neighbors. Coming from Paris 
to solicit payment, she was forced to accept of 



A FRIGHTENED PATIENT. 117 

that sum in billets d etat, although they were 
then at sixty per cent, discount. Unwilling to re 
turn to Namur with less than would satisfy her 
creditors, and resolving to risk everything to accom 
plish that object, she laid out the whole in the pur 
chase of shares of the India Company immediately 
on its institution, which happened just at that 
period, and, consequently, became enriched beyond 
her utmost expectations. 

Mr. Chiral, principal physician to the regent, on 
his way to visit a female patient, having been in 
formed that the price of actions was falling, was so 
affected by that piece of news that he could think 
of nothing else; and, accordingly, while holding 
the lady s pulse, kept exclaiming, " O good God ! it 
falls, it falls !" The invalid, naturally alarmed, 
began to ring the bell with all her force, crying out 
that she was a dead woman, and had almost expired 
with apprehension, till the doctor assured her that 
her pulse was in a very good state, but that his 
mind was so much upon actions, that he came to 
utter the expression that terrified her in reference to 
the fall of their value. That learning herself could 
not shield her votaries from the infection, appears 
from the following circumstance :M.de la Motte 
and the Abb 6 Terrasson, two of the ablest scholars 
in France, conversing together on the madness of 



118 MEMOIR OF JOHN LAW. 

the Mississippi adventurers, congratulated them 
selves on their superiority over all weaknesses of 
that nature ; and indulged themselves in ridiculing 
the folly of the votaries of the fickle goddess. But 
it so happened that they met, not long afterward, 
face to face in the rue Quincampoix ; at first, they 
endeavored to avoid each other, but, finding that 
impracticable, put the best look possible to the 
matter, rallied each other, and separated in order 
to make the most advantageous bargains they 
could. WOOD. 

(5.) The memoirs of the regency (vol. ii. p. 331) 
contain a notice of a hump-back man, who in the 
course of a few days acquired 150,000 livres by let 
ting out his hump as a writing desk to the brokers in 
the rue Quincampoix. A plan of Paris being about 
this time laid before Louis XY., then only ten years 
of age, the young monarch found fault with it ? 
because that street (rue Quincampoix), was not dis 
tinguished from the others by gilding. WOOD. 

(6.) A footman had gained so much that he pro 
vided himself with a fine carriage ; but the first 
day it came to the door, he, instead of stepping into 
the vehicle, mounted up to his old station behind. 
Another, in a similar predicament, brought himself 



A MAGNIFICENT COOK. 119 

well off by pretending he got up only to see if 
there was room on the back for two or three more 
lackeys, whom he was resolved to hire instantly. 
Mr. Law s coachman had made so great a fortune 
that he asked a dismission from his service, which 
was readily granted, on condition of procuring 
another as good as himself. The man thereupon 
brought two coachmen to his master, they were 
both excellent drivers, and desired him to make 
choice of one, at the same time saying that he 
would take the other for his own carriage. One 
night at the opera, a Mademoiselle de Begond, ob 
serving a lady enter magnificently dressed, and 
covered with diamonds, jogged her mother, and 
said, " I am much mistaken if this fine lady is not 
Mary, our cook." The report spread through the 
theatre, till it came to the ears of the lady, who, 
coming up to Madame de Begond, said, "I am 
indeed Mary your cook, I have gained large sums 
in the rue Quincampoix. I love fine clothes and 
fine jewels, and am accordingly dressed in them. 
I have paid for everything, am in debt to nobody, 
and pray what has any person in this place to say to 
this ?" At another time, some persons of quality 
beholding a gorgeous figure alight from a most 
splendid equipage, and inquiring what great 
lady that was, one of her lackeys answered, " A 



MEMOIR OF JOHN LAW 

woman who has tumbled from a garret into a car 
riage." One of these upstarts, finding himself 
enriched beyond his utmost expectations, hastened 
to a coachmaker s and ordered a berlin to be made 
in the finest taste, lined with the richest crimson 
velvet and gold fringe, and went away after leav 
ing 4,000 livres as earnest. The coachmaker run 
ning after him to inquire what arms were to be put 
on the carriage, was answered, " Oh, the finest the 
^nest by all means." A quondam footman sitting 
in a newly acquired carriage, having his way im 
peded by another belonging to an officer, their ser 
vants quarrelled, and the former having made use 
of some improper expressions, the officer obliged 
him to alight and putting his hand to his sword, 
the other took to his heels, crying out, " Brethren 
of the livery, come to my assistance." 

But, perhaps, the drollest circumstance that oc 
curred, was what happened to one Brignaud (son of a 
baker at Toulouse), who being desirous of having a 
superb service of plate, purchased the whole articles 
exposed for sale in the shop of a goldsmith for 
400,000 livres, and sent them home to his wife, with 
orders to set them out properly for supper, to which 
he had invited many persons of distinction. The 
lady, not understanding the business, arranged the 
plate according to her fancy, and without regard to 



NEW WINE IN OLD BOTTLES. 121 

their real use ; so that when supper was announced 
the guests could not forbear from indulging in peals 
of laughter to see the soup served up in a basin for 
receiving the offerings at church, the sugar in a 
censer, and chalices holding the place of salt-cel 
lars, while most of the other articles were more 
suited to a toilet than a sideboard. WOOD. 

(7.) An old lady who wished to obtain the con 
cession of some shares from Law after the subscrip 
tion was closed, said in her eagerness, " Faites moi 
wie conception? (concession) (Make me a concep 
tion). Law replied, " Vous venez i/rop tard^ il rfy a 
pas moyen d present" (You come too late, it is no 
longer possible.) WOOD. 

(8.) Some one directed another, who was inquir 
ing for a certain duchess, to Law s house, where 
all the duchesses were sure to be assembled. 
WOOD. 

(9.) Law was not exalted by the excessive 
adulation he received ; he was simple and un 
ostentatious in his style and habits. WOOD. 

(10.) It may, perhaps, require some explanation 
how so many low persons should acquire large for 
tunes from nothing, in so short a time ; but, inde- 

6 



122 MEMOIR OF JOHN LAW. 

pendent of the rise in the price of actions, various, 
indeed, were the ways of doing so during the Mis 
sissippi contagion. Some, either unable or unwill 
ing to go to the rue Quincampoix to dispose of 
their shares, trusted them to others, who received 
orders to sell for a certain sum. On their arrival, 
they commonly found the price risen, and without 
scruple put the price in their own pockets. A gentle 
man, falling sick, sent his servant to dispose of 250 
shares for 8,000 livres each ; and he sold them at 
the rate of 10,000 livres, making a profit of 500,000 
livres, which he appropriated to himself, and, by 
other lucky adventures, increased that sum to up 
wards of two millions. A person deputed to sell 
200 shares for another, kept himself concealed for 
some days, during which time their price rose so 
high that he cleared near a million of livres of pro 
fit, giving back to his employer, who had been 
hunting him in vain, only the market rate of the 
day on which he was sent to dispose of the actions. 
One De Josier, trusted with the like number of 
shares to sell for 550 livres each, disappeared, but 
coming back when the system was at its height, 
profited immensely. WOOD. 

(11.) The honest old soldier, Marshal Villars, was 
so vexed to see the folly which had smitten his 



MARSHAL VILLAES DISGUSTED. 



123 



countrymen, that he never could speak with tem 
per on the subject. Passing one day through the 
Place Vendome in his carriage, the choleric gentle 
man was so annoyed at the infatuation of the peo 
ple, that he abruptly ordered his coachman to stop, 
and, putting his head out of the carriage window, 
harangued them for full half an hour on their " dis 
gusting avarice." This was not a very wise pro 
ceeding on his part. Hisses and shouts of laughter 
resounded from every side, and jokes without num 
ber were aimed at him. There being at last strong 
symptoms that something more tangible was flying 
through the air in the direction of his head, the mar 
shal was glad to drive on. He never again repeated 
the experiment. MACKAY S Popula/r Delusions. 

(12.) NUMBER AND VALUE OF SHARES ISSUED BY THE COMPANY 
OF THE INDIES. 



Successive emis 
sions. 


Number 
of shares. 


}j 


Total price. 


Actual price 
per share. 


Actual price of 
each emission. 


1st Capital 
1st Subscription.. 
2d 
3d " " 
Supplementary .... 


200,000 
50,000 
50,000 
300,000 
24,000 


500 
500 
500 
500 
500 


100,000,000 
25,000,000 
25,000,000 
150,000,000 
12,000,000 


500 
550 
1,000 
5,000 
5,000 


100,000,000 
27,500,000 
50,000,000 
1,500,000,000 
120,000,000 




624,000 




312,000,000 




1,797,500,000 



Thus the company had issued 624,000 shares at 



MEMOIR OF JOHN LAW. 

500 fraftcs each, representing 312 million francs, 
but profiting by the rise they had sold them 
for 1,797,500,000 francs. For paying a divi 
dend upon this enormous sum, their total probable 
receipts were 82,000,000, which would have given 
130 francs upon a share of 500 francs, a magnificent 
result. But it is to be observed that the greater 
part of the subscribers had paid 5,000 francs for 
their shares and to give a dividend of 4 per cent, 
per annum it was necessary to make a dividend of 
200 francs per share. COCHUT. 



CHAPTER VI. 

Extravagant prices of goods First decline of shares Drain of 
specie from the bank Forced measures resorted to Attempts 
to revive confidence by adding new functions to the company 
Letter to a creditor Panic increases Odious measures Licen 
tiousness of the rcalizers Bank notes might and shotild have 
been disconnected from the shares Violent and criminal plan. 



125 



CHAPTEK VI. 

THE end of the month of December, 1719, was 
the term of this delusion of three months. A cer 
tain number of stock-jobbers, better advised than 
others, or more impatient to enter upon the enjoy 
ment of their riches, combined to dispose of their 
shares. They took advantage of the rage which led 
so many to sell their estates they purchased them, 
and thus obtained the real for the imaginary. They 
established themselves in splendid mansions, upon 
magnificent domains, and made a display of their 
fortunes of thirty or forty millions. They possessed 
themselves of precious stones and jewels, which 
were still eagerly offered, and secured solid value 
in exchange for the semblance of it, which had be 
come so prized by the crowd of dupes. The first 
effect of this desire to realize was a general increase 
in the price of everything. An enormous mass of 
paper being put in the balance with the existing 
quantity of merchandise and other property, the 
more paper there was offered against purchasable 
objects the more rapid the increase became. Cloth, 
which heretofore brought fifteen to eighteen francs 

127 



128 MEMOIR OF JOHN LAW. 

a yard, rose to one hundred and twenty-five francs a 
yard. In a cook-shop, a Mississippian, bidding 
against a nobleman for a fowl, ran the price up to 
two hundred francs. 

From this instant the shares suffered their first 
decline, and a heavy uneasiness began to spread 
abroad. The extent of the fall was not measured 
by those whom it menaced ; but people wondered, 
doubted, and began to be alarmed. The shares 
declined to fifteen thousand francs. However, the 
bank notes were not yet distrusted. The bank was, 
in fact, entirely distinct from the company, and 
their fate, up to this time, appeared in no way 
dependent the one on the other. The notes had not 
undergone any fictitious and extraordinary advance. 
Large amounts had been issued, certainly ; but for 
gold and silver, and upon the deposit of shares. 
The portion which had been issued upon the deposit 
of shares partook of the danger of the shares them 
selves ; but no one thought of that, and the bank 
notes still possessed the entire confidence of the 
public ; only they no longer had the same advan 
tage over specie since the latter had been so much 
sought by the "realizers." The notes already 
began to be presented at the bank for coin, and the 
vast reserve which it had possessed began to 
diminish perceptibly. 



FORCING A CIRCULATION. 129 

Law did then what governments do so often, and 
always with ill success : he resorted to forced mea 
sures. He declared, in the first place, by decree, 
that the bank notes should always be worth five 
per cent, tnore than coin. 

In consideration of this superiority in value the 
prohibition which forbade the deposits of gold and 
silver for bills, at Paris, was taken off, so that notes 
could be procured at the bank for coin. This per 
mission was simply ridiculous, for no one now 
wished to exchange specie for paper even at par. 
But this was not all; the decree declared, that 
thereafter silver should not be used in payments of 
over one hundred francs, nor gold in those over 
three hundred francs. This was forcing the circula 
tion of notes in large payments, and that of specie 
in small, and was designed to accomplish by vio 
lence what could only be expected from the natural 
success of the bank. 

These measures did not bring any more gold and 
silver to the bank. The necessity of using bank 
notes in payments of over three hundred francs, gave 
them a certain forced employment, but did not pro 
cure them confidence. Notes were used for large 
payments, but coin was amassed secretly as a value 
more real and more assured. The creditors of the 

state ceased to carry their receipts to the rue Quin- 

fi* 



130 MEMOIR OF JOHN LAW. 

campoix, because they already distrusted the shares; 
they could not deeide to buy real estate, because 
the price had been quadrupled; they suffered the 
most painful anxiety, and, in their turn, embarrassed 
the holders of shares who needed the receipts to pay 
their installments of one-tenth. The catastrophe, 
approached, and nothing could avert it, unless some 
magic wand could give the company an income of 
four or five hundred millions a year, which was now 
only seventy or eighty millions. 

Law, having been converted by the Abbe* de 
Tencin, had abjured the Protestant religion, and 
been appointed Comptroller-General of the Finances. 
lie was anxious to revive courage, and, during the 
first of January, 1720, he made his appearance in 
the rue Quincampoix, in the full costume of a 
minister, surrounded by a numerous attendance of 
noblemen. His presence inspired a remnant of 
enthusiasm, and revived for a moment all the 
anticipations. His agents spread the intelligence 
that new decrees would be issued in favor of the 
company, that the real value of the shares would 
be augmented, and that they must rise again 
immediately, and that the decline was the result of 
accident. 

In fact, Law added new functions to those which 
the company already exercised. He caused the 



NEW PBOMISES. 131 

burdens of the receivers of public moneys to be re 
funded; lie gave it the receipts-general, and thus 
gave it the entire administration of the public reve 
nue. He reserved for it the profit on the refine 
ment of gold and silver, and ordered the recoining 
of certain coins in order to obtain the opportunity 
for making a new profit. He caused it to be 
announced that considerable capital was to be 
devoted by the company to extend the fisheries, 
and to the erection of new manufactories. He 
accorded to the subscribers a more extended time 
of payment of the installments of one-tenth, which 
reassured many who were embarrassed by the 
maturity of their obligations. He caused the 
directors of the company to advertise that it was 
about to declare a dividend of forty per cent, upon 
its nominal capital of three hundred millions, which 
would, be six or seven per cent, upon its real capital, 
and which would suppose an income of one hun 
dred and twenty millions a year. As has been 
shown, this promise was an imposition, for the in 
come could not much exceed eighty millions. At 
last, as the creditors of the state no longer sought 
a liquidation of their claims, and complained that 
while the shares fluctuated the price of real estate 
had quadrupled, Law issued a new decree, by which 
all those who did not present their claims on 



132 MEMOIR OF JOHN LAW. 

government for liquidation, should suffer a reduction 
on them of two per cent. 

To these rigorous measures toward the creditors 
he added those of persuasion. He published a 
pamphlet entitled "A Letter to a Creditor," in 
which he justified his refunding project. He demon 
strated that the system of perpetual annuities was 
ruinous to the state, and that the abolition of them 
was a politic measure. He reproached the annui 
tants for not having subscribed in season, and for 
not having taken their share of the profits of the 
rise a fault, if it was one, imputable to him rather 
than to them, since he was the author of the pro 
ceedings which had prevented the creditors becom 
ing, directly, the shareholders in the company. 

These measures produced a transient relief in the 
market. The shares, which had declined to twelve 
thousand francs, rose again to fifteen, and it was 
thought for a moment that they had yielded only 
to a panic. Besides, every decline is succeeded, in 
the passion for stock-jobbing, by a reaction, because 
the decline in the market attracts purchasers who 
speculate upon a return of the rise. The creditors 
of the state presented their claims for liquidation, 
but they hesitated, notwithstanding the hopeful 
lights which were displayed so brilliantly before 
them, to invest their money in the rue Quincam- 



DECLINE IN NOTES AND SHARES. 133 

poix, and exchanged their receipts for bank notes, 
which obliged the bank to raise the issue as high as 
a billion. In this manner, the amount of the debt, 
which should have been converted into shares, re 
mained floating in the shape of bank notes. 

So the rise was only momentary. The eagerness 
to sell remained the same; the decline of paper 
money and the increased price of .everything con 
tinued in the same proportion. The shares declined 
to twelve thousand. 

The notes also began sensibly to lose their value 
relative to specie. Their position was, as we have 
said, different from that of the shares. They repre 
sented some commercial funds, some deposits of 
gold and silver, and much of the national debt re 
cently refunded. All these values were real. 
There were only the notes representing the shares 
deposited, which constituted values suspected and 
tainted by misrepresentation. But, although this 
was a good reason for discrediting them, the real 
cause of their decline in value was the increasing 
disposition to realize. Merchants received the 
notes, but it was to take them to the bank. These 
merchants did not wish to realize in Paris all they 
could; they sent quantities of bank notes away 
from Paris to convert them into specie, still suffi 
ciently abundant in the treasurie%of the provinces. 



134 MEMOES OF JOHN LAW 

Law, at the end of his resources, persevered in 
the employment of forced measures. In order to 
oppose some obstacle to the eagerness with which 
people exchanged bank notes for rich ornaments, 
he prohibited, by decree, the wearing of diamonds 
pearls and precious stones. To stop the conversion 
of notes into specie, which the merchants effected 
in the provinces, he prohibited the transportation 
of specie between cities where there were branches 
of the bank. Heretofore he had contented himself 
with enabling creditors to require payment in bank 
notes, and afterward by requiring that all pay 
ments of more than three hundred francs should be 
made in notes, but specie still sufficed for ordinary 
purposes. He settled this difficulty by a decree of 
the 28th of January, giving a forced currency to 
bank notes. Law, at last, had recourse to a new 
alteration of the coin to give a movement to specie 
and bring it back to the bank. After three days, 
gold was to be reduced from nine hundred to eight 
hundred and ten francs to the marc, and silver from 
sixty to fifty-four. The confiscation of all the old 
coin was ordered, the recoinage of which had been 
directed, and which had not been brought to the 
mint. Domiciliary visits were authorized to dis 
cover any infringement of these regulations. 

These odious measures did not arrest the con- 



EXTRAVAGANCE OF THE SUCCESSFUL. 135 

tinued decline of the shares, nor the progressive, 
though less rapid, discredit of the bank notes. The 
shares fell to ten thousand francs. At this time the 
scene was deplorable. The creditors of the state, 
their claims paid, their hands full of bank notes, 
afraid to buy shares, unable to invest in real estate, 
remained in trembling expectation of the catastro 
phe which menaced all paper securities. The spe 
culators who had arrived late (toward the end of 
the rise), having brought to the rue Quincampoix 
the sum total of their property, and exchanged 
their substance for a phantom, were a prey to des 
pair. As to those who had become rich, they 
rushed into those violent pleasures and excesses 
which the soul of a gambler craves ; they displayed 
in their newly-acquired mansions, that barbarous, 
monstrous luxury which signalized the age of 
Roman corruption; furniture of gold and silver, 
dazzling jewels, precious odors, fountains of per 
fumed water, fruits from both continents, monstrous 
fish, marvellous automatons, half-naked courte 
sans this was the display which some of them 
made at their entertainments. Those who, more 
cautious, avoided this licentiousness, committed a 
great wrong toward France, by transferring our 
specie to foreign countries to insure certain and un 
assailable fortunes there. The manners of the peo- 



136 MEMOIK OF JOHN LAW. 

pie were corrupted by these events. The power, 
which all classes had, of enriching themselves with 
out that labor which renders man worthy of wealth 
and temperate in the enjoyment of it, excited 
among the people an immoderate ambition an 
unbridled rage for luxury and raised up a crowd 
of vulgar upstarts, strangers to refined pleasures, 
and abandoned to gross and brutal indulgence. 

In such a situation of affairs, it was necessary to 
take some decided course. It was evident that the 
decline of the shares would continue without inter 
mission ; that soon, a terror seizing upon all minds, 
the discredit would be as exaggerated as the credit 
had been, and that the shares would fall tempor 
arily below what they were actually worth. It was 
necessary to be resigned to this and to submit to the 
consequences of the fault which had been com 
mitted in the conversion of the public debt. It was 
necessary to let the shares fall, the inordinate ad 
vance of which could not be prevented, but to 
hasten to save the bank, an institution vast, useful, 
and become, for the moment, sacred. The notes, in 
fact, had every claim to protection from the shares. 
The speculators in the shares had undoubtedly been 
deceived ; among them many creditors of the state 
had been the victims of deplorable illusions ; never 
theless they had wished to speculate and had 



EFFORTS TO SAVE THE NOTES. 137 

freely taken the chances of fortune. The holders of 
bank notes, on the contrary, were forced to accept 
them by the decrees which refunded the public 
debt, which obliged the payment of all sums over 
three hundred francs in notes, which, at last, gave 
a forced currency to them. The notes were a value 
which the holders had taken without any choice of 
their own, without seeking the chances of fortune, 
by force, in obedience to the law. Unless it would 
subject itself to the charge of actual theft, the law 
ought to guarantee the value of the notes. 

In a word, it was necessary to sacrifice the shares 
to protect the notes. The means of accomplishing 
this were very simple, it was to disconnect the fate 
of the notes from that of the shares. There were 
a billion francs in bank notes in circulation. A 
part of this sum had been issued to discount bills of 
exchange, another part to pay the creditors of the 
state. These were issued upon a solid foundation, 
since they represented commercial bills which were 
soon due, and a part of the public debt. Four 
hundred and fifty millions had been issued upon 
shares deposited. These had no foundation. These 
should have been recalled immediately, by calling 
in the loans, and thus entirely detaching the notes 
from the shares. These would have sunk immedi 
ately. It was necessary to become callous, to sus- 



138 MEMOIR OF JOHN LAW. 

tain many just reproaches and defy the unjust, and 
expiate an exaggerated popularity, by suffering an 
excessive condemnation. The shares would then 
have risen again, but not beyond the limit where 
the certain income of the company would have car 
ried them. It had eighty millions that year to 
divide, it could have one hundred millions the next 
year. This would give a dividend of five per cent., 
and would be sufficient, at the present rates, to 
maintain the total capital at two billions, which 
would give a market price of about three thousand 
francs a share. At this price, the shares would 
again have crept by degrees into favor, and the 
creditors of the state, holders of large sums in bank 
notes, would have employed them sooner or later 
in paying the installments. The company would 
have been saved with the bank, and the system 
itself would have survived the panic. But what 
courage was needed to brave the cries of those of 
the creditors who had been unwittingly led into 
this fatal course ; of that nobility, whose wildest 
hopes had been nourished ; who, in possessing 
shares, thought their hands filled with gold who 
surrounded Law with homage who regarded him 
as a benefactor, and called him the great Law ! 
How dare he betray their hopes, renounce theii 
adorations, and endure their contempt and fury ? 



CONCEALMENT OF COIN". 139 

Law conceived a plan, at once violent and 
criminal, which, had the faults which all those have 
which oppose a necessity, and which risk every 
thing rather than sacrifice anything. He resolved 
to sustain the bank notes by forced measures, and 
to join the fate of the shares to that of the notes at the 
risk of ruining both. Here is his plan in detail. 

We have already seen what he had done to com 
pel the employment of notes, and thus sustain their 
credit. They had been given the currency of coin ; 
they alone could be employed in payments over 
three hundred francs, and in the transfer of funds 
from province to province. To these regulations 
Law added some still more violent. By the decrees 
of the 23d and 25th of February, the notes alone 
could be employed in payments of over one hundred 
francs. Notwithstanding this extension of the 
exclusive use of notes, the concealment of coin con 
tinued. Law forbade the holding of more than five 
hundred francs in specie at a time, by any indi 
vidual, under a penalty of 10,000 francs. Inform 
ers were allowed half the fine, which immediately 
introduced distrust and trouble in families. The 
prevention of the hoarding of coin did not interdict 
all outlets for it except the boxes in the treasury. 
There remained its conversion into furniture and 
plate. Law limited this fabrication by a series of 



140 MEMOIR OF JOHN LAW. 

articles which must be read to enable one to con 
ceive the embarrassments which involve the adoption 
of forced measures. JSTo work in gold was allowed 
to weigh more than an ounce. The manufacture 
of silver plate was still permitted, but the largest 
dishes could not weigh more than ten marcs, a dozen 
plates more than thirty marcs, a sugar bowl more 
than three marcs, candlesticks more than four, etc. 

Many articles of furniture and luxury were 
enumerated, the manufacture of which in gold or 
silver was prohibited. After having prevented the 
hoarding or casting of precious metals, in order to 
oblige them to be brought to the bank, Law resorted 
to a proceeding still more censurable : that of 
another alteration in the value of coin. By the 
same decrees he raised the marc of silver from 
sixty to eighty francs, with the purpose of reducing 
it soon to sixty again. At the moment of the re 
duction the possessors of coin must necessarily bring 
it to the bank, to avoid its decline in their hands ; 
but in this case it was the bank which sustained the 
loss by the reduction, and it attracted coin only by 
sustaining considerable losses, and by disturbing, 
besides, all kinds of transactions by this fluctuation 
in values. The marc being raised from sixty to 
eighty francs, the coin in France was increased from 
twelve to sixteen millions. 



NOTES TO CHAPTER YL 



(1.) A LAST effort was therefore tried to restore 
the public confidence in the Mississippi project. 
For this purpose, a general conscription of all the 
poor wretches in Paris was made by order of gov 
ernment. Upward of six thousand of the very 
refuse of the population were impressed, as if in 
time of war, and were provided with clothes and 
tools to be embarked for ISTew Orleans, to work in 
the gold mines alleged to abound there. They 
were paraded day after day through the streets with 
their pikes and shovels, and then sent off in small 
detachments to the outposts to be shipped for 
America. Two-thirds of them never reached their 
destination, but dispersed themselves over the coun. 
try, sold their tools for what they could get, and 
returned to their old course of life. In less than 
three weeks afterwards, one-half of them were to 
be found again in Paris. The manoeuvre, however, 
caused a triniiig advance in Mississippi stock. 
Many persons of superabundant gullibility believed 
that operations had begun in earnest in the new 

141 



14:2 MEMOIR OF JOHN LAW. 

Golconda, and that gold and silver ingots would 
again be found in France. MACKAY S Popula/r 
Delusions. 

(2.) The vagabonds and refuse of justice having 
produced nothing but disorder in Mississippi, the 
company changed its method of recruiting, and^ 
instead of criminals, those alone whose only crimw 
was poverty were condemned to this exile. 
COCHUT. 



CHAPTER VII. 

The bank and the company united Price of the shares fixed 
Measures for regulating the exchange of shares Frightful de 
preciation of bank notes Debtors the only persons benefited 
Father betrayed by his son Speculators dispersed by soldiers 
Second " Letter to a Creditor" Ingratitude of the Mississippians 
Murder and robbery by a young nobleman Firmness of the 
Regent. 



143 



CHAPTER VII. 

THE bank and the company were at last united, 
which was the essential condition of the general 
plan of Law, but which should not have been 
effected until the company should have escaped 
from its troubles by the reduction of its shares to a 
price proportioned to its actual income. Law 
issued this decree on the 5th of March, which 
achieved the grand object of his desires. This 
decree fixed the price of the shares, for the future, 
at nine thousand francs. It effected nothing to fix 
the price in this arbitrary manner ; the price must 
be assured to those who wished to sell. The same 
decree also ordered the opening of an office at the 
bank for exchanging shares for notes, or notes for 
shares, at pleasure, at the price of nine thousand 
francs a share. By this measure Law thought, or 
pretended to think, that he had definitely fixed the 
condition of the shares. The value of notes being 
assured, according to him, by the different decrees 
he had issued, that of the shares was assured by the 
optional conversion of them into notes. The sys- 

7 145 



146 MEMOIR OF JOHN LAW. 

tern thus tended toward the accomplishment of 
one of its perfections, which was to offer to the 
public, at their option, either a profitable invest 
ment or a sound currency. This combination 
offered a profit calculated with great ingenuity. 
Every share exchanged for notes and deposited in 
the bank ceased to pay a profit to the depositor, 
and, of course, was a profit to the company, which 
received the income on it. In this manner, the 
dividend earned on the deposited shares increased 
that on the shares which were held as an invest 
ment, not having been exchanged for notes. 

This project of a great intellect at bay, contend 
ing against an inevitable catastrophe, has been 
attributed to the ministers of the quadruple alli 
ance by the friends of Law, who have sought to 
excuse his faults. These ministers, say the apolo 
gists of Law, desired to ruin the system, and con 
trived the decree of the 5th of March. The apolo 
gists are mistaken. The decree belonged positively 
to Law ; everything proves it the subtlety of the 
combination, the care taken to adapt it to the 
original plan, and the manifest desire to sustain the 
shares, even at the expense of the notes. 

This disastrous project contained the greatest 
errors at once of principle and of their application. 
In the first place, the value of the notes was far from 



ATTEMPT TO FIX THE PRICE OF SHAKES. 147 

being consolidated by the forced measures which 
had been resorted to ; and had it been, it would 
have been destroyed by the attempt to attach to it 
the value of the shares. Then it was a grave error 
to attempt to fix the price of the shares, even if the 
value had been real and not exaggerated. The 
shares, representing the capital invested in an enter 
prise which could have greater or less success, or 
even no success at all, ought to be uncertain, like 
the result, and lose or gain according to the chances 
of success. It should be thus with all investments. 
The desire to render them more easily disposed of 
by facilitating the exchange of the scrip was com 
mendable, but the liberation of invested capital, so 
as to render it convertible at any moment into a 
fixed sum of money, was to convert it directly into 
nothing less than money itself; and then interest 
upon it was " nonsense," for interest is designed to 
pay for what is not in circulation. It was absurd 
to wish to fix the price of the shares ; moreover, in 
the existing circumstances, it was criminal. A 
large number of shares were exchanged for bank 
notes, and the notes becoming confounded with the 
imaginary capital of the rue Quincampoix, must sink 
with it. At the existing prices, the total number of 
shares was still worth five or six billions, and must 
fall inevitably to two billions or fifteen hundred 



148 MEMOIR OF JOHN LAW. 

millions. The bank-notes must share this bank 
ruptcy, and the involuntary holder of the notes 
must share the ruin of the Mississippia/ns. With 
out having wished to speculate, without having 
taken any of the chances, he was despoiled, he was 
ruined by the law. 

Some other provisions, the necessary consequence 
of the preceding, were contained in the famous 
decree of the fifth of March, 1720. All the sums 
lent upon deposits of shares were to be called in, 
since by the optional conversion a new mode of 
deposit had been instituted. The loans amounted 
to four hundred and twenty-five millions. Many 
of the subscribers not having completed their pay 
ments, because they had not the means, or because 
Vhe creditors no longer brought their receipts to the 
rue Quincampoix, Law obviated the difficulty by 
uniting several shares, the first payments on which 
had been made, to make one share entirely paid in. 
Four of the ten payments on the great subscription 
of fifteen hundred shares had been made ; that is, two 
thousand francs of the five due on each. For these 
two thousand francs and the three still unpaid, 
the subscriber was entitled to one share, the price 
of which was then nine thousand. He paid five 
thousand for what was worth nine thousand; he 
thus gained four thousand ; upon three shares he 



REDUCTION OF SHAKES. 149 

gained twelve thousand francs. In this manner 
there was a profit in reducing several shares to one. 
Three subscriptions, upon which four payments had 
been made, paid for two shares. These three sub 
scriptions, with four payments on each, made six 
thousand francs paid in. The subscriber then had, 
for six thousand francs, two shares at nine thousand 
francs each, or together, eighteen thousand francs. 
He gained twelve thousand francs, all as if there 
had been no confusion. 

The company, having been paid four of the ten 
installments, had received six hundred millions, and 
was to receive nine hundred more to complete the 
amount of fifteen hundred millions. By reducing 
the three hundred shares one-third, which it was 
the original intention to issue, to obtain the fifteen 
hundred millions, it left two hundred thousand in 
the market, and reserved one hundred thousand, 
which, at nine thousand francs, represented the nine 
hundred millions remaining to be collected. By 
this arrangement all the shares issued were wholly 
paid for ; the remainder were simply new shares to 
be sold. The result of this regulation of the ac 
count with the shareholders, was, that a part of the 
shares were retained by the company, which, accord 
ing to the first terms of subscription, the subscribers 
would have been obliged to take. These terms, 



150 MEMOIR OF JOHN LAW. 

moreover, had become illnsory since the establish 
ment of the office for purchase and sale, as ever j one 
was at liberty to return his shares to the company. 
Besides the one hundred thousand shares which 
the company consented to retain, and which repre 
sented the unpaid installments, it took charge of 
another one hundred thousand belonging to the 
royal treasury, which had become a subscriber by 
benevolently taking on its own account the shares 
of a number of noble families, favorites of the 
regent. The company agreed to pay nine hundred 
millions for them, but it was to have three years in 
which to pay it. This precaution was indispensable, 
as otherwise it would have been compelled to issue 
nine hundred millions more of bank notes, and the 
already overburdened circulation could not possibly 
have sustained it. 

As the creditors, forced to accept payment, would 
not take the shares in which they no longer had 
any confidence, and could not buy real estate be 
cause of the excessive exaltation in its price, the 
company was permitted to return to its system of 
pensions, and to create ten millions of them at two 
and a half per cent. This offered an investment 
for those who did not know how to make use of 
their bank-notes, and a method for calling in four 
hundred millions of notes. 



DEPRECIATION OF BANK-NOTES. 151 

These were the measures devised by Law to 
retard the catastrophe which could not be averted. 
The office for the purchase and the sale of shares 
was scarcely opened when the crowd poured into 
it. Four hundred and twenty-five millions of the 
billion of notes issued had been recalled by the re 
vocation of the loans on deposits of shares. 
These had been immediately re-issued to pay for the 
shares presented for exchange. The bank was even 
compelled to issue another billion to satisfy all the 
demands, which raised the total issue to two billions. 

From this moment the depreciation of bank-notes, 
and the appreciation of everything else, was more 
rapid than ever. Heretofore the shares being con 
vertible into notes only by sale in the market, the 
conversion had been little by little, and their value 
had been exchanged slowly for merchandise, real 
estate and all kinds of purchasable property. But 
the power of immediate conversion being given, 
the whole mass of shares could be realized at once. 
There were fifteen or sixteen hundred millions 
realized, as we have just seen. Thus the deprecia 
tion made frightful progress. It was no longer the 
shares which declined, since they could always be 
converted at will for a fixed sum of bank-notes, 
but the notes themselves depreciated. In February 
the notes were at a discount of only ten per cent., 



152 MEMOIR OF JOHN LAW. 

while the shares had fallen one-half. After the 
decree of the 5th of March the shares no longer 
declined, but the notes were at forty or fifty per 
cent, discount. The shares were still quoted at 
nine thousand francs : but nine thousand francs in 
notes were worth only four or five thousand in coin. 
Violent and vexatious as the measures were to sus 
tain the credit of the notes, they were insufficient 
to give them a value which they did not possess. 
No one wished to make use of them ; dishonest 
debtors alone used them to pay their debts. Les 
sees paid their rent in notes, which operation 
relieved many of them who were much involved. 
The nobility, especially, paid all their debts in this 
way, and thus relieved their estates from the mor- 
tages with which they were encumbered. Law 
thus accomplished a part of what he had promised 
them by furnishing them with a means of freeing 
themselves from debt. But if the notes were good 
for defrauding old creditors, they were only worth 
one-half their nominal value for new purchases. 
Coin was secretly used for daily purchases, and was 
concealed with care, to avoid the necessity of taking 
it to the bank. Notwithstanding the prohibition to 
retain more than five hundred francs in coin, and the 
inducements offered to informers, many accumulated 
it clandestinely. It is true that their resistance of the 



EXPOKTATI01I OF SPECIE. 153 

law gave them many pangs. They feared every 
moment a betrayal by their servants, and even by 
their nearest relatives. People saw with indigna- 
nation an unnatural son betray his father. The 
Eegent rendered a judgment full of wisdom against 
the son, and everybody applauded him for it. But 
the system fell into greater contempt than ever. 
A frightened few, however, returned their coin to 
the bank, but the number was small ; the greater 
part buried it in the earth, and the rich reaUzers 
used every artifice to transfer it to foreign coun 
tries. Another portion of our coin left France, and 
although the exportation of specie is not necessarily 
injurious, it was so at this time, since it left behind 
only a false paper currency and an imaginary capi 
tal. 

The rue Quincarnpoix was still frequented, but 
no longer for speculation in shares, but for the ex 
change of notes for every kind of movable and 
immovable property. Law prohibited the assemb 
ling of crowds in this street, because the price of 
shares being fixed, they could no longer be the sub 
ject of bargains. The crowd persisted, none the 
less, in assembling. Then the archers were sent to 
disperse the speculators, and these new rigors in 
creased still more the hatred which the system and 
its author inspired. 

7* 



154 MEMOES OF JOHN LAW. 



Under these circumstances Law published a 
second "Letter to a Creditor of the State" upon 
the whole of his operations. It was dated the llth 
of March, 1720. He was right in the principles 
which he maintained, but he only employed miser 
able sophisms to justify the exaggerated price to 
which he had permitted the shares to rise, and at 
which he had wished to maintain them. All value, 
he argued, was matter of opinion. Only one thing 
is necessary to sustain it, i. e. " do not seek to sell." 
Houses and lands have, indeed, a real value ; never 
theless, if everybody wished to sell them at the 
same time, what would become of it ? It was easy 
to answer this wretched sophism. Lands and 
houses produce something which establishes the 
income which they yield, and is a solid foundation 
of value. On the other hand, it was impossible to 
establish the supposititious income of the shares, be 
cause the business profits could not in any case be 
proportionate to the extravagant price of the capital. 
Notwithstanding the certainty of their income, if 
lands or houses were doubled or tripled in extent or 
number they would immediately depreciate in pro 
portion. Even if the shares had received such an 
income, as unfortunately they did not, the im 
mediate creation of such an enormous investment 
would have caused a depreciation. Were there in 



INGRATITUDE OF THE MISSISSIPPIAJBTS. 155 

all France five or six billions of francs to invest in 
shares bearing interest ? Nothing was more false 
than Law s reasoning. He added to it severe ex 
pressions deserved, but useless against the real- 
izers who precipitated the fall of the system by 
selling their shares. 

His letter did not allay the irritation. He was 
called a miserable sophist, and the rich Mississi/p- 
pians, whom he accused of ruining the system by 
realizing, inveighed against him with a violence 
which was, in them, black ingratitude. Some of 
them exhibited their contempt for paper money by 
lighting with bank-notes the chafing dishes which 
covered their luxurious tables. A frightful incident 
augmented still more the general apprehension. In 
the midst of this delirious cupidity which had 
seized upon all minds, some profligate young noble 
men, who had been unsuccessful in speculation, 
resolved to steal that which they had not the wit to 
win. They formed a plot, it was said, to seize the 
portfolios of the speculators, charging upon them 
sword in hand as they were assembled in the rue 
Quincampoix. A crime committed before the exe 
cution of the plot fortunately rendered it impossible. 
A young roue", the Count de Horn, united with two 
companions of his debaucheries, and with their aid 
seized the person of a rich speculator. They carried 



156 



MEMOIR OF JOHJST LAW. 



Mm to a tavern, where they murdered and then 
plundered him. They succeeded at first in making 
their escape, but, pursued by the clamors of the 
people, they were arrested and confessed their 
crime. The whole of the nobility surrounded the 
Eegent, imploring him to spare the young Count de 
Horn an infamous punishment. The Regent re 
sisted nobly, and answered all that was said on 
behalf of the family with : " The crime makes the 
infamy, not the scaffold." Law insisted that the 
example was indispensable at that time, when 
everybody had their whole fortune in their port 
folios. The Count de Horn expired upon the 
wheel. 



NOTES TO CHAPTEE VH. 



(1.) FROM the conclusion of this letter we learn 
that the cares of his station, the pressure of business, 
or the adulation so lavishly bestowed on him, or per 
haps all these causes combined, had begun to affect 
the minister s brain. " Law s head is so heated that 
he does not sleep at night, and has terrible fits of 
frenzy. He gets out of bed almost every night, 
and runs stark staring mad about the room, making 
a terrible noise, sometimes singing and dancing, at 
other times swearing, staring and stamping, quite 
out of himself. Some nights ago, his wife, who had 
come into the room upon the noise he made, 
was forced to ring the bell for people to come to 
her assistance. The officer of Law s guard was the 
first that came, and found Law in his shirt, who 
had set two chairs in the middle of the room, and 
was dancing round them, quite out of his wits. 
This scene the officer of the guard told Le Blanc, 

157 



158 MEMOIR OF JOHN LAW. 

from whom it came to me by a very sure convey 
ance." HARDWICKE : State Papers. 

(2.) " Since Law is comptroller general his head 
is turned," said the regent. In fact from the very 
day when the author of the system was discon 
certed by the manoeuvre of the realizers, it is very 
difficult to follow his operations they are like the 
nervous incoherent movements of a drowning man 
COCHUT. 



CHAPTER VIII. 

Circulation of gold prohibited Reduction of the nominal value of 
shares and bank notes Great clamor raised Whole blame of 
the reduction falls on Law Regent yields to the clamor He 
retains Law in his favor Law repeals some of the most obnox 
ious regulations Measures to abolish the System Difficulties in 
carrying them out. 



159 



CHAPTER 



LAW, adding measures to measures, at last 
prohibited the circulation of gold, because this 
metal was, by its convenience, a rival of bank-notes 
infinitely more dangerous than silver. He then 
announced an approaching reduction in the value 
of coin, which he had raised by a decree in Febru 
ary, only to reduce it again in a short time. The 
marc in silver, raised from sixty to eighty francs, 
was reduced to seventy on the 1st of April, and 
sixty-five on the 1st of May. But this measure was 
utterly insufficient to bring it to the bank. 

The situation grew worse every day ; the issue of 
notes to pay for the shares presented at the bank 
had risen to two billions, six hundred and ninety- 
six millions ; their depreciation increased, and cre 
ditors of every description being paid in paper 
which was at a discount of sixty per cent., com 
plained bitterly of the theft authorized by law. 

In this juncture there remained but one step to 
be taken. As the necessary sacrifice had not been 

161 



162 MEMO1K OF JOHN LAW. 

made in the first place, and the shares abandoned 
to their fate in order to protect the notes, both 
must now be sacrificed, shares and notes together, 
in order to finish this wicked fiction. The false 
hood of this nominal value, which obliged men to 
receive at par what was depreciated thirty or forty 
per cent, could not be prolonged. The immediate 
reduction of the nominal value of the shares and 
bank-notes was the only resource. Sacrifices can 
not be too hastily made when they are inevitable. 

M. d Argenson, although dismissed from the trea 
sury, still remained keeper of the seals ; he had 
risen in the esteem of the regent, as Law had 
declined, and he advised the reduction of the nomi 
nal value of the shares and notes as an urgent 
necessity. Law, who saw in this reduction an 
avowal of the fiction in the legal values, and a blow 
which must hasten the fall of the system, opposed it 
with his whole strength. Nevertheless, M. 
d Argenson prevailed. On the 21st of May, 1720, 
a decree, which remains famous in the history of 
the system, advertized the progressive reduction in 
the value of shares and notes. This reduction was 
to begin on the very day of the publication of the 
decree, and to continue from month to month until 
the 1st of December. At this last term the shares 
were to be estimated at five thousand francs, and a 



EFFECTS OF THE DECREE. 163 

bank-note of ten thousand francs at five thousand 
one of a thousand at five hundred, etc. The 
notes were thus reduced fifty per cent., and 
the shares only four-ninths per cent. Law, 
although opposed to the decree, consented to pro 
mulgate it. (NOTE 1.) 

Scarcely was it published when a fearful clamor 
was raised on all sides. The reduction was called a 
bankruptcy ; the government was reproached with 
being the first to throw discredit upon the values 
which it had created, with having robbed its own 
creditors, a number of whom had just been paid in 
bank-notes, even as late as the preceding day ; in a 
word, with assailing the fortunes of all the citizens. 
The crowd wished to sack Law s hotel, and to tear 
him in pieces. Nothing that could have happened 
would have produced a greater clamor ; but in 
times like those it was not only necessary not to 
fear these clamors it was even a duty to defy 
them. (NOTES 2, 3.) 

The reply to the complaints would have soon 
been evident to the intelligence of everybody. 
Without doubt the creditors of the state, and some 
private individuals, who had been paid in bank 
notes, were half ruined by the reduction, but this 
was not the fault of the decree of the 21st of May 
the real reduction was long before this ; the decree 



164 MEMOIR OF JOHN LAW. 

only stated a loss already experienced and the 
notes were worth still less than the decree declared. 
Because a number of creditors had been ruined by 
the falsity of nominal values, was it a reason to 
continue the fiction that it might extend the ruin ? 
On the contrary, it was necessary to put an end to 
it, to save others from becoming victims. The 
official declaration of the fact, although it was 
known before, must produce a shock and hasten th<? 
discredit, but it was of little importance that it was 
hastened, since it was inevitable. 

The public thought Law the author of this mea 
sure, advised exclusively by M. d Argenson, and 
he became the sole object of hatred. The parlia 
ment, making common cause with the public, 
thought it a good opportunity to take up arms. It 
did not perceive, in its blind hatred of the system, 
that it was going to render a service to its author, 
and that to declare itself against the reduction of 
the bank-notes was to maintain that the values 
created by Law had a solid foundation. It assem 
bled on the 27th of May to demand a revocation of 
the decree of the 21st. At the very moment when 
it was deliberating, the regent sent one of his offi 
cers to prohibit all discussion, announcing the 
revocation of the decree. 

The regent had the weakness to yield to the pub- 



REVOCATION OF THE DECREE. 165 

lie clamor. Had the decree been bad, its revocation 
would have been worse. To declare that the shares 
and notes were still worth what they purported to 
be, availed nothing; for no one believed it, and 
their credit was not restored b j it. A legal falsehood 
was reaffirmed, and, without rendering any service 
to those who were already ruined, the ruin of those 
who were obliged to receive the notes at their 
nominal value was insured. The decree of the 
21st of May, wise if it had been sustained, became 
disastrous as soon as it was revoked. Its only effect 
was to hasten the general discredit, without the 
essential advantage of reestablishing a real, legal 
value. 

The regent feigned, in public, to attribute all the 
evils of the situation to Law, and to remove him 
from the general control ; but he received him in 
private, and offered him secret consolation for his 
seeming severity. The first irritation of the holders 
being past, he welcomed him publicly again ; he 
even received him in his box at the opera, and gave 
him a guard to protect his house from the attacks 
of the mob. The Cardinal Dubois was indebted to 
the system for considerable benefits, and he united 
with Law in an effort to ruin M. d Argenson, the 
author of the decree of the 21st of May. The 
regent, who, notwithstanding his superiority of in- 



166 MEMOIR OF JOHN LAW. 

tellect and his military courage, lacked resolution, 
suffered himself to be persuaded, took the seals 
from M. d Argenson, and gave them to M. 
d Aguesseau. 

Law and the Chevalier de Conflans hastened to 
Frene in search of M. d Aguesseau, who had the 
weakness to suffer himself to be brought back by 
the author of his first disgrace. Having returned 
to Paris, he suffered in the public estimation, and 
the affairs of the Company underwent no improve 
ment. 

We have seen by what a succession of faults the 
system had been compromised. This conversion of 
the public debt into shares having been managed 
imprudently, the shares had been carried to a price 
absurdly exaggerated. The fault having been com 
mitted, the shares should have been suffered to fall, 
and have been entirely disconnected with the notes, 
in order to save the bank at least, an institution of 
immense utility, if not to save the Indian Company, 
the success of which was of much less importance. 
Instead of this, there was an effort to save the 
shares by means of the notes, which effort compro 
mised both. After this, it was necessary to keep 
pace with the discredit, and to declare it as fast as 
it progressed, so that no one should be compelled to 
accept a false value. But by declaring it, and then 



* RETURN TO GOVERNMENT SECURITIES. 167 

revoking the declaration, everything was at once 
lost. The public, after this, wished to have nothing 
to do either with shares or notes. There was 
nothing left but to withdraw both as promptly as 
possible. A prudent demolition was all that re 
mained to be accomplished. 

Law still presided over financial operations with 
out appearing to control them. He was obliged, on 
the 1st of June, to make a first atonement to the 
public, by revoking the prohibition to retain more 
than five, hundred francs of coin. This was the 
most vexatious measure of the system, and the revo 
cation of it was the most urgent. 

Of the six hundred thousand shares there had 
been three hundred thousand returned to the bank. 
The royal treasury had returned one hundred thou 
sand, which made four hundred thousand which the 
public no longer wanted. In exchange for them 
there were two billions six hundred and ninety-six 
millions four hundred thousand bank-notes in cir 
culation. These rejected shares must be abolished, 
and an investment in government securities offered 
for this mass of notes ; that is to say, a return must 
be made to the old form of the public debt, after 
frightful disasters and thousands of ruined fortunes. 
On the 3d of June the four hundred thousand shares 
in the bank were annulled. The government 



168 MEMOIK OF JOHN LAW. 

voluntarily sacrificed the one hundred thousand 
which it had deposited, and released the Company 
from its debt of nine hundred millions. This left 
two hundred thousand shares in circulation, one- 
third of the whole amount. But, in return, the 
forty-eight millions, which were assigned to the 
Company upon the collection of the revenue, were 
retracted to serve for the creation of the new 
pensions. Of its eighty millions of income, the 
Company thus lost forty-eight, and retained only 
thirty-two. The two hundred thousand shares re 
maining in circulation gained by the annulment of 
the four hundred thousand, since their number was 
reduced two-thirds, while they did not lose two- 
thirds of their income. In consideration of this, 
an assessment of three thousand francs a share was 
asked, which might be paid either in shares or 
notes. If in shares, it would take one in three 
that is, three shares would be exchanged for two. 
It seems from this, that the shares were valued at 
six thousand francs, as one sufficed to pay two 
assessments of three thousand francs. The assess 
ment was not compulsory. The Company promised 
a dividend of two hundred francs upon \\ e shares 
not paying the assessments, and three hi ndred and 
sixty upon the others. It calculated upon an in 
come of forty millions at least, and seventy-two at 



CREATION OF ANNUITIES. 169 

most an entirely exaggerated expectation ; for, by 
tlie withdrawal of the forty-eight millions on the 
collection of the revenue, the income was reduced 
to thirty-two millions. However, by this demand 
for an assessment, six hundred millions of notes 
might be recalled, or the two hundred thousand 
remaining shares might be reduced one-third. 

By decrees of the 10th and 20th of June, the forty- 
eight millions allowed the Company on the collec 
tion of the revenue was again appropriated by the 
government, for the service of the new pensions, 
etc., which it proposed to create. By the decrees 
of the 24th of February and the, 5th of March, a 
subscription had been opened for ten millions per 
petual annuities upon the Company and four mil 
lions of life annuities. Upon these there had been 
subscribed one million of perpetual annuities and 
four millions of life annuities, which made five mil 
lions to deduct from the forty-eight millions re 
assigned to the government. Forty-three millions 
remained to be employed in the creation of new 
annuities. There were twenty-five millions consti 
tuted upon a capital of a billion, which was two 
and a half per cent. There remained eighteen mil 
lions to be disposed of according to circumstances. 

As this investment would not suit those holders of 
notes who were engaged in commerce, accounts cur 

8 



\ 



170 MEMOIR OF JOHN LAW. 

rent were opened with them at the bank on the 13th 
of July, with the double design of offering them a 
suitable employment for their notes, and to keep 
up the exercise of the functions of the bank. The 
money for these current accounts was to be fur 
nished in notes, and not to exceed six hundred mil 
lions. For^this capital the bank undertook to open 
accounts with business men, and to make their pay 
ments through the bank. The billion of annuities 
and the six hundred millions in current accounts 
would reduce the two billions six hundred and 
ninety-six millions of notes which burdened the cir 
culation to about one billion. The assessment de 
manded on the shares, and the eighteen millions 
remaining upon the product of the revenue, were so 
much means of extinguishing this billion. 

Such were the measures taken to abolish the 
system. But the recall of the bank-notes was not 
effected without difficulty. The annuities of two 
and a half per cent, were not subscribed for with 
enthusiasm, because the creditors of the state were 
not contented to receive tha^Jnterest in the place 
of the four per cent, which they received formerly. 
Yet the two and a half per cent, was sufficient ; for, 
according to the then value of the notes, it amounted 
to five per cent. But the importunate creditors, 
who had received the notes at their full value, did 



FAILTJEE OF THE NEW PLAN. 171 

not reason in this manner, and believed that two 
and a half per cent, was all they received, and really 
that was all they obtained on their original capital. 
So they could not readily bring themselves to make 
this grievous sacrifice by subscribing for the newly- 
created annuities. The traders were not more eager 
to open their current accounts, because the bank 
was distrusted, and the established value of money 
was of little use in commercial transactions. Of 
the six hundred millions only two were subscribed. 
The example which Law set, by subscribing five 
millions for annuities and accounts current, had no 
influence. Neither would the holders of the two 
hundred thousand shares pay the requested assess 
ments, because they had no confidence either in the 
dividend of three hundred and sixty francs, or even 
in that of two hundred. 

Although the price of the shares was fixed at six 
thousand francs for the assessment, they were worth 
much less for purposes of traific. Their decline was 
more rapid than that of the notes, and they had 
fallen to five thousand francs. Five thousand francs 
in bank-notes were worth scarcely twenty-five hun 
dred in coin. So the share which was worth 
eighteen thousand francs in November and Decem 
ber, 1719, was worth only twenty-five hundred in 
June, 1720, eight months after. Although the 



172 MEMOIR OF JOHN LAW. 

bank was exempted from paying, at sight, notes of 
above one hundred francs, by the law which prohi 
bited the payment in coin of sums above that 
amount, it was, nevertheless, constrained to pay 
those below that sum. To conceal the exhaustion 
of its treasury it paid very slowly, and often in the 
smallest coin. Its offices were opened late and 
closed early, so that the bills of one hundred francs, 
and less, were far from being equivalent to coin, on 
account of the difficulty of converting them. 

There were in notes of 10,000 francs 1,134,000,000 frs. 

" " " " 1,000 " 1,223,200,000 " 

" " " " 100 " 299,200,000 " 

" " " " 10 " 40,000,000" 



Making a total of 2,696,400,000 " 

The bank being required to pay only notes of one hundred francs 
and ten francs, was obliged to find coin only for the sura (in notes 

of 100 fraucs) of 299,200,000 frs. 

And the sum (in notes of 10 francs) of 40,000,000 " 

Total 339,200,000 " 

This explains the decline in the notes which were not converti 
ble, and the reason why the bank was able, sometimes, to pay on 
demand. 



NOTES TO CHAPTER YHL 

REASONS AND CONSEQUENCES OF THE FAILURE. 

(1.) THERE is abundance of authority that Law 
was opposed to the fatal edict (21st of May) which 
changed the relations of coin to the bank-notes. 
WOOD. 

(2.) Such were the consequences of the fatal edict 
of the 21st of May, a piece of folly hardly to be 
equalled in the annals of any nation, and not easily 
to be accounted for on any other supposition than 
as a contrivance of the French ministry to free them 
selves from a formidable rival, to accomplish which 
object they did not hesitate to bring the kingdom 
to the brink of destruction. But it is by no means 
so easy to account for the regent s giving his con 
sent to a decree that, besides being a breach of 
public faith, was an experiment full of dangers, 
by which neither himself nor any other could pos 
sibly be benefited. Had no such step been taken, 
and his highness allowed the system to go on in the 

173 



174: MEMOIR OF JOHN LAW. 

way supposed to have been at first intended, it is 
not unreasonable to imagine that, infatuated as the 
people were to acquire shares of the India Com 
pany, the sums paid to the national creditors would 
have been retired with the sale of less that 200,000, 
consequently, the public would then have had 
about 400,000 shares in their hands. The Company 
could, in this case, easily have made good their en 
gagement to pay a dividend of 200 livres on each of 
these shares, as we have seen that, on a very mode 
rate computation, they enjoyed an annual revenue 
of about eighty millions, administered by them 
selves, and capable of great increase. By destroy 
ing the notes retired, none would have remained in 
circulation except such as had been issued for value 
by the bank, which could thus have answered all 
demands made upon it. The Company, being 
thereby relieved from every apprehension of suffer 
ing by a run upon them, would have had leisure to 
direct their attention to the improvement, by all 
possible means, of the home revenue, the culture of 
the colonies, and the extension of their commerce. 
In this case, what might not have been expected 
from the exertions of a body of men, possessed of 
almost unlimited credit, whose funds were immense, 
who had in their hands the whole foreign trade and 
possessions, and all the public revenues of the 



FEASIBILITY OF LAW S SCHEME. 175 

kingdom, and who, moreover, enjoyed the declared 
protection of government, and the implicit confi 
dence of the people I The opinion that the system 
was a monstrous and impracticable monopoly ap 
pears to have been taken up without sufficient 
grounds. All preceding attempts to establish a 
flourishing trade to the Indies had failed of success, 
from deficiency of funds in the parties concerned, 
so that it was far from being an improper step to 
endeavor to settle the commerce to these places on 
a solid and extensive basis, the more especially as 
the exclusive privilege of trading thereto was 
granted to the Company only for a limited period. 
With regard to taking the great farms out of the 
hands of the farmers-general, it is apprehended that 
the propriety of that transfer will not be disputed, 
when the enormous profits made by those extrava 
gant and luxurious financiers, and their unwarrant 
able exactions, are considered ; while, on the other 
hand, the superior advantages of assuming these 
favors into the hands of a company, in which no 
person that could command a moderate sum was 
excluded from holding a share, is evident. By 
consolidating into one channel every branch of the 
public revenue, all unnecessary charges of collection 
and mismanagement were avoided and consequently 



176 MEMOIR OF JOHN LAW. 

the taxes must be levied and their amounts remitted 
at the cheapest rate possible. At least it must be 
acknowledged that the idea was truly great ; and 
Mr. Law s being able to carry matters to the length 
he did, will appear astonishing indeed when we con 
sider what reception would in this country await a 
similar attempt to unite the public revenues, the 
mint, the banks, the East India and other privileged 
companies, into the hands of one great association. 
The very low price at which the shares of the India 
Company were originally fixed must however be 
allowed to have been a capital error, though, per 
haps, in some measure necessary to raise the billets 
ffetat from the discredit into which they had fallen. 
WOOD. 

(3.) Among the caricatures that were abundantly 
published, and that showed as 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 " Memoires de la R egence." 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 



CARICATURES. 177 

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 
low according to the turns of the wheel. Upon the 
ground are the merchandise, daybooks 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 por 
tion of the shares which she distributed so bounti 
fully 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 further, and all the crowd along with 
it. Over the first door are the words, " Hopital des 
Foux," over the second, "Hopital des Malades," 
and over the third, " Hopital des Gueux" Another 
caricature represented Law sitting in a large 
caldron, boiling over the flames of popular mad 
ness, surrounded by an impetuous multitude, who 

8* 



178 MEMOIR OF JOHN LAW. 

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. MAOKAY S 
Popular Delusions. 



CHAPTER IX. 

"Spoils of the Mississippians " Further efforts to bring in the 
notes Men suffocated in the crowd at the bank Mob pursue 
Law He seeks protection at the palace of the Regent Bank 
closed Tampering with the currency Severities towards the 
Mississippians Final abolition of the System Law quits France 
Confiscation of his property. 



179 



OHAPTEK IX. 

THE stockjobbers still sought to assemble for 
buying and selling. Driven from the me Quin- 
c^mpoix, they formed groups in the place Yendome. 
The existence of an open office at the bank, for the 
exchange of shares and notes, could no longer be 
an objection to their assembling, so they were 
authorized to assemble. They raised tents in the 
place Yendome on account of the excessive heat in 
July. Under these tents various bargains were 
made shares were sold for notes ; notes for specie 
or merchandise, consisting of jewelry, precious 
stones, ornaments, furniture, and even horses and 
carriages which had belonged to ruined speculators. 
It was a fair where were sold the spoils of the 
Mississippians. The public called it Mississippi 
overthrown. 

Law conceived a new means of insuring the 
return of notes, which had been heretofore neg 
lected. 

The Company had certain privileges for nine 
years only, and others for fifty. Law prepared a 



181 



182 



MEMOIR OF -JOHN LAW. 



decree which secured these privileges to it in per 
petuity, on the condition that six hundred millions 
of notes should be called in. It was a more certain 
method than the assessments on the bank accounts. 
The decree was presented to parliament on the 17th 
of July. 

The same day there occurred a very important 
incident. 

We have just said that the bank was not obliged 
to pay notes of over one hundred francs. It paid 
them slowly, and employed all imaginable artifices 
to avoid the payment of them. Nevertheless, its 
coffers were almost exhausted, and it was necessary 
to authorize it to confine its disbursements to the 
payment of notes of ten francs only. The people 
rushed to the bank in crowds, to realize their notes 
of ten francs, fearing that these would soon share 
the fate of those of one hundred. The pressure 
was so great that three persons were suffocated. 
The indignant mob, ready for any excess, already 
menaced the house of Law. He fled to the Palais 
Royal to seek an asylum near the regent. The 
mob followed him, carrying the bodies of the three 
who had been suffocated. The carriage which had 
just conveyed him was broken to pieces, and it was 
feared that even the residence of the regent would 
not be respected. 



COOLNESS OF THE XJHIEF OF POLICE. 183 

The gates of the court of the Palais Koyal had 
been closed; the Duke of Orleans, with great 
presence of mind, ordered them to be opened. The 
crowd rushed into the court and suddenly stopped 
upon the steps of the palace. Leblanc, the chief 
of police, advanced to those who bore the corpses, 
and said, " My friends, go place these bodies in the 
Morgue, and then return to demand your pay 
ment." These words calmed the tumult; the 
bodies were carried away and the sedition was 
quelled. 

In the midst of these popular tumults, parlia 
ment assembled to act upon the edict which 
accorded to the Company its privileges in per 
petuity. 

The session was a stormy one, and from time to 
time members would ask, in defiance of all 
decency, if Law had not yet been killed by the 
people? They were vexed to learn that he had 
found safety with the regent, and took the 
opportunity to refuse to enregister the edict. 

In order to prevent the recurrence of these 
popular outbreaks, notice was given that the bank 
would be closed for a few days, but, to keep the 
people quiet, money-changers were distributed in 
the principal public places to receive a portion of 
the notes of ten francs. Law remained concealed 



184 MEMOIR OF JOHN LAW. 

at the Palais Royal to avoid the public sentiment, 
and the parliament was exiled to Pontoise. 

After this, measures succeeded each other 
rapidly, designed to call in the paper in circulation 
and hasten the complete abolition of the system. 
Having been unable to reduce the nominal value 
of notes and shares one-half, that of coin was 
doubled. The marc of gold, raised to eighteen hun 
dred francs, and that of silver to one hundred and 
twenty, were both to be reduced, from month to 
month, to their first prices, of nine hundred and of 
sixty. This was done to induce a return of silver 
into circulation. The measure was ruinous to 
creditors, who, having made their bargains when 
the marc of silver was sixty francs, were paid when 
it was one hundred and twenty. 

Decrees were then published with the design of 
withdrawing the bank-notes as fast as possible. As 
the public were not disposed to subscribe for the 
annuities, shares were again resorted to, and fifty 
thousand created in order to withdraw the six hun 
dred millions with which the Company had intended 
to pay for the perpetuity of their privileges. The 
assessments were made compulsory, under penalty 
of annulment of the shares. Eight millions, of two 
per cent, annuities were created to furnish the cre 
ditors in the provinces an opportunity to use their 



FURTHER DECLINE OP THE SHARES. 185 

securities. At last, to put an end to the circulation 
of the notes, it was decided that the notes of ten 
thousand francs and those of one thousand, should 
become preferred shares, with a fixed income of 
two per cent. They were thus condemned to take 
the form of shares, without even having the chance 
of increasing their dividend, if the operations of 
the Company should be fortunate. 

This decree, which announced the approaching 
end of the system, accelerated still more the decline 
of the notes of ten thousand and of one thousand 
francs. The bank, in order to conform to the pro 
gressive depreciation, had been obliged to reduce 
the two hundred millions, furnished for opening the 
accounts current, to fifty millions. The shares now 
sold for only two thousand francs in bills, which 
represented scarcely two hundred in silver, so that 
the shares which had sold for eighteen thousand 
francs, in November, 1719, were worth only two 
hundred in October, 1Y20. 

The market for stocks, which had been transferred 
from the Place Yendome to the Hotel de Soissons, 
was again closed. Sixty brokers were appointed 
to act as agents for sales and purchases, and all 
assembling of speculators in public places was pro 
hibited. 

Severities against the rich Mississippians were 



186 MEMOIK OF JOHN LAW. 

commenced in this same month of October. For a 
long time, it had been suspected that the govern 
ment, following an ancient usage, would deprive 
them, by means of visas and chambres o/rdentes^ of 
what they had acquired by stock-jobbing. A list 
was made of those known to have speculated in 
shares. A special commission arbitrarily placed on 
this list the names of those whom public opinion 
designated as having enriched themselves by spe 
culation in paper. They were ordered to deposit 
a certain number of shares at the offices of the Com 
pany, and to purchase the required number, if they 
had sold their own. The realizers were thus 
brought back by force to the Company which they 
had deserted. Eight days were given to specula 
tors of good faith to make, voluntarily, the prescribed 
deposit. To prevent flight from the country, it was 
prohibited, under pain of death, to travel without a 
passport. 

These measures increased still more the decline 
of the shares. All those whose names were not 
upon the list of rich speculators, and who could not 
tell what would become of the shares not yet de 
posited, hastened to dispose of .all they retained. 

The system wholly disappeared in November, 
1720, one year after its greatest credit. All the 
notes were converted into annuities or preferred 



QUITS PAKIS. 187 



shares, and all the shares were deposited with the 
Company. Then a general Ut oisa" was ordered, 
consisting of an examination of the whole mass of 
shares, with the purpose of annulling the greater 
portion of those which belonged to the enriched 
stockjobbers. (NOTE 1.) 

Law, foreseeing the renewed rage which the visa 
would excite, determined to leave France. The 
hatred against him had been so violent since the 
scene of the 17th of July, that he had not dared to 
quit the Palais Eoyal. The following fact will 
give an idea of the fury excited against him: A 
hackman, having a quarrel with the coachman of a 
private carriage, cried out, "There is Law s car 
riage." The crowd rushed upon the carriage, and 
nearly tore in pieces the coachman and his master 
before it could be undeceived. (JSToTES 2, 3, 4r.) 

Law demanded passports of the Duke of Or 
leans, who granted them immediately. The Duke 
of Bourbon, made rich -by the system, felt under 
obligations to Law, and offered money and the car 
riage of Madame de Prie, his mistress. Law 
refused the money and accepted the carriage. He 
repaired to Brussels, taking with him only eight 
hundred louis. (NOTE 8.) 

Scarcely was he gone when his property, consist 
ing of lands and shares, was sequestrated. 



188 MEMOIR OF JOHN LAW. 

Law had been imprudent, culpable, even, in his 
management of the system, but he thought more of 
carrying out his views than of making a fortune. 
While the rich Mississippicms had acquired for 
tunes of forty or fifty millions, he, possessor of all 
the treasure of the system, had made scarcely ten, 
had invested them in France and had sent nothing 
abroad. Able to draw large sums in coin at the 
bank, he did not even think to procure money for 
his journey, and owed to accident the eight hundred 
louis which served to pay his travelling expenses. 
His property was sequestrated on the pretext of re 
gulating his personal accounts with the Company, of 
which, however, he was the creditor. (NOTES 5, 6, 7.) 

The brothers Paris were charged with the execu 
tion of the "visa" It extended to two billions two 
hundred and twenty-two millions of the paper of 
the system still remaining, and consisted of shares, 
or notes converted into preferred shares. The title 
by which these were held, by those who had 
deposited them, was investigated, and those belong 
ing to lately enriched holders were annulled, which 
reduced the total amount of paper to five hundred 
millions. The public debt was thus changed partly 
into annuities and partly into shares. The capital 
was nearly the same as before the system, but the 
interest was very much diminished. There was but 



RELICS OF LAWS SYSTEM. 189 

little more than thirty-seven millions to pay, instead 
of eighty millions; but a very large number of 
creditors had been completely ruined and the public 
credit was as low as in 1716. The bank was 
abolished the Company, deprived of all its privi 
leges except that of foreign commerce, continued 
to exist under the name of the Indian Company, 
and was all that remained of the vast machine 
which Law had contrived. 




NOTES TO CHAPTER IX. 



LAW S PERILOUS SITUATION. 



(1.) The Yisa appointed to settle this complicated 
and difficult liquidation consisted of fifteen boards, 
composed of Masters of Requests and Counsellors 
of the Great Council, who employed under them no 
less than 800 clerks; and, in order to assist the 
commissioners in their operations, copies of all con 
tracts for the transfer of property entered into 
before notaries, betwixt 1st July, 1719, and 31st 
December, 1720, were directed to be made out. 
The effects, carried to the Yisa by 511,009 indi 
viduals, amounted, as stated by the proprietors, to 
2,222,597,491 livres in contracts for annuities on 
lives, perpetual annuities, etc. And this sum the 
commissioners reduced to 1,676,501,831 livres, the 
interest of which may be computed at forty-eight 
millions a year, partly consisting in life annuities, 
and therefore continually diminishing. The shares 
of the India Company were in like manner reduced 
from 125,024, with a dividend of 36.0 livres per 

190 



NOTES. 191 

annum each, to only 55,316 (afterward increased to 
56,000), each having a dividend of 100 livres the first 
year, and 150 livres every subsequent year, exclu 
sive of their proportion of the profits of the trade. 
Thus, in consequence of these arbitrary proceedings, 
the annual interest payable by the king was dimin 
ished to about fifty-six millions of livres, by which 
his majesty was a gainer of upwards of forty mil 
lions a year, and many of the public creditors were 
reduced to the utmost misery and distress. 
WOOD. 

(2.) In the midst of these disordered movements, 
the situation of Law had become very perilous. 
The Count de Braglie, who affected great frankness, 
had dared to say at the table of the regent, and 
looking the director in the face, that he would die 
on the gallows. Bets were made on the London 
Exchange that he would be hung in September; 
Law, himself, brave as he was, was frightened and 
did not conceal it. He feared that some intrigue 
of the court, or some riot in the street, would put a 
tragic end to his existence. "I am," said he, "like 
the chicken with golden eggs, who was worth no 
more, dead, than a common fowl." COCHUT. 

(3.) The parliament was sitting at the time of this 



192 MEMOIR OF JOHN LAW. 

uproar, and the president took upon himself to go 
out and see what was the matter. On his return, 
he informed the councillors that Law s carriage had 
been broken by the mob. All the members rose 
simultaneously, and expressed their joy by a loud 
shout, while one man, more zealous in his hatred 
than the rest, exclaimed, " And Law himself ^ is he 
torn to pieces?" MACKAY S Popular Delusions. 

(4.) Every epithet that popular hatred could 
suggest was showered upon the regent and the un 
happy Law. Coin, to any amount above five hun 
dred livres, was an illegal tender, and nobody would 
take paper if he could help it. E"o one knew to 
day what his notes would be worth to-morrow. 
" Never," says Duclos, in his " Secret Memoirs of 
the Regency," " was seen a more capricious govern 
ment never was a more frantic tyranny exercised 
by hands less firm. It is inconceivable to those 
who were witnesses of the horrors of those times, 
and who look back upon them now as on a dream, 
that a sudden revolution did not break out that 
Law and the regent did not perish by a tragical 
death. They were both held in horror, but the 
people confined themselves to complaints; a 
sombre and timid. despair, a stupid consternation, 
had seized upon all, and men s minds were too vile 



NOTES. 193 

even to be capable of a courageous crime." There 
was still one more trial left : on the 12th of Novem 
ber, he having appeared at the bank, they called him 
knave and thief to his face. He left, his head high 
and his look disdainful, and only thought to prepare 
for departure. COCHUT. 

(5.) At his last interview with the Due d Orleans, 
it is reported that Mr. Law said, " My Lord, I ac 
knowledge that I have committed great faults ; I 
did so because I am but a man, and all men are 
liable to err ; but I declare to your royal highness 
that none of them proceeded from knavery, and 
that nothing of that kind will be found in the whole 
course of my conduct." 

The absurdity of this last accusation is evident ; 
and with respect to the charge of knavery, a very 
strong proof of the uprightness of his intentions 
arises from the circumstance of vesting his whole 
acquisitions in landed property in France, not re 
mitting any part thereof to foreign countries, which 
could have been done with the utmost facility, and 
obliging his immediate connections, particularly his 
brother William, and his confidential secretary, 
Robert Neilson, to follow the same honorable line 
of conduct. The amount of Mr. Law s fortune at 
the conclusion of the system, will afford another 



194 MEMOIR OF JOHN LAW. 

refutation of the charge. The following enumera 
tion of his purchases in France being stated on the 
authority of his nephew, M. Law de Lauriston : 



Le Marquisat d Effiat (en Auvergne) 800,000 liv. 

La Terre de la Riviere 900,000 " 

Le Marquisat de Toucy 160,000 " 

La Terre de la Marche 120,000" 

La Terre de Roissy 650,000 " 

La Terre de Orcher 400,000 " 

Terre et Bois de Breau 160,000 " 

Marquisats de Charleville et Bacqueville 330,000 " 

La Terre de Beeville 200,000 " 

La Terre de Fontaine Rome. 130,000 " 

La Terre de Lerville 110,000 " 

La Terre d Yrille 200,000 " 

La Terre de la GerpouvUle 220,000 " 

La Terre de Faucarville (en Normandie) 820,000 " 

La Terre de Guermande 160,000 * 

Hotel Mazarin, et Emplacemens Rue Vivienne 1,200,000 " 

Emplaceraens Rue de Varenne 110,000 u 

Emplacemens de la place Louis le Grand 260,000 " 

Partie du fief de la Grange Bateline 150,000 " 

Marais ou Chantiers du Fauxbourg St. Honore 160,000 " 

Maisons, surtout dans Paris 700,000 " 

Le Domain de Bourget 90,000 " 

Quelques petits terres, comme Valan$ay, St. Su- 

plice, etc. 350,000 " 

7,850,000 " 



NOTES. 195 

(6.) Besides the above, it is said that he acquired 
Lislebonne from the Marchioness de Beuveron, at 
the price of 500,000 livres, as also Little Kambouil- 
let at 180,000 livres ; made offer of 1,700,000 livres 
to the Duke de Sully for the Marquisate of Eosny, 
purchased the valuable library of the Abbe" Bignon 
at the price of 180,000 livres, and bought, for 
150,000 livres, the Secretaire du Koi, for the sake 
of the privileges of nobility attached to that office. 
But the making of these purchases was reckoned a 
piece of policy necessary for the support of his own 
credit, and of that of the India Company ; and so 
strict a connection subsisted between these, that it 
was remarked on disposing of part of his landed 
property, people began to speak in very dubious 
terms of his circumstances, and the price of shares 
suffered a depression. WOOD. 

(7.) It would seem that Mr. Law originally pos 
sessed 10,500 shares of the India Company. Of 
these he voluntarily gave up 2,000 to the company 
in October, 1720 ; 3,000 were deposited in security 
of a debt of 96,000 sterling, due from him to the 
Earl of Londonderry, Governor Harrison, and other 
gentlemen ; and 500 were assigned for the liquida 
tion of an unjust claim against him, to be hereafter 
noticed. 



196 MEMOIR OF JOHN LAW. 

The deficiency of eight shares of the remaining 
5,000, appears to have been owing to the following 
circumstance : Soon after his elevation to the office 
of Comptroller-General he made his appearance in 
the Rue Quincampoix ; during the confusion occa 
sioned by the crowd pressing to see him, and crying 
out Vive le Roi et Monsieur Law, a lady had her 
pocket picked of near 100,000 livres in notes. On 
being informed thereof, Mr. Law generously pre 
sented her with shares to the amount of what she 
had lost. WOOD. 

(8.) Mr. Law arrived at Brussels in the morning 
of the 22d December, 1720, passing under the 
name of M. Du Jardin ; but as soon as it was known 
who he really was, General Wrangle the governor, 
the Marquis de Pancalliers and several of the prin 
cipal persons in that city went to pay their respects 
to him. He waited on the Marquis de Prie the 
same afternoon at five o clock, and afterwards 
accompanied Madame de Pancalliers to the theatre 
where a vast concourse of people were assembled 
to behold so extraordinary a character. Next day, 
the 23d, the Marquis de Prie, returning Mr. Law s 
visit in great state, brought him home in his coach 
to a most sumptuous entertainment, at which were 
present several persons of the highest quality. 



NOTES. . 197 

That evening Mr. Law went again to the play, and, 
after it was over, supped with the Marquis 
d Esquiblache. On the 24th he dined a second 
time with the Marquis de Prie, to whom, having 
notified his intention of leaving Brussels the same 
evening, that nobleman ordered passports to be got 
ready ; and Mr. Law accordingly set out at nine at 
night, accompanied by his son. 

He came to Yenice early in January, 1721, still 
passing under the name of Mr. Du Jardin, and con 
tinued in that city two months, partaking of all the 
pleasures the Carnival afforded, and living on 
terms of intimacy with the imperial and French 
Ambassadors. The famous cardinal Alberoni, the 
Spanish minister, coming there in February, had an 
interview with Mr. Law ; and it was reported that 
the Chevalier de St. George also arrived incognito 
and had a conference with these ministers, in the 
Capuchin monastery. "Whether this last particular 
was true or not, cannot now be certainly known ; 
only it seems that at this period the chevalier was 
not seen publicly at Rome for several days, and 
when he appeared again he looked so well, that 
little credit was given to the report that had been 
circulated of his indisposition. In the meantime, 
the most extraordinary stories were told of Mr. 
Law, tending to impress people with an idea of his 



198 MEMOLB OF JOHN LAW. 

being possessed of immense wealth. It was said 
that 160,000 pistoles had been lodged on his 
account in the bank of the Holy Ghost at Kome 
by some persons unknown ; that he had offered a 
vast sum to be admitted into the order of Yenetian 
nobility ; and that his son was to be married to a 
daughter of the Due de Cesarini, who had a fortune 
of 100,000 crowns ; and that he had drawn bills of 
exchange to the amount of 250,000 pistoles. While 
such reports were spread, Mr. Law found himself 
under the necessity, in order to secure himself 
against the claims of pretended creditors, of having 
his name enrolled in the list of Roman citizens, it 
being one of the privileges t)f that body to be 
exempted from arrest and prosecution from debt, at 
the suit of any other than a fellow burgher. 
Having taken this necessary precaution, he left 
Venice on the 15th of March, for Ferrara, on* his 
way to Rome, but receiving intelligence that some 
of his creditors had assigned their debts to a 
Roman citizen, who had concerted measures to 
have him arrested immediately on his arrival, he 
judged it advisable to return to Yenice. After 
some stp-y there he travelled through Bohemia and 
Germany to Hanover, where he had the honor of 
an audience of Prince Frederick, and then pro 
ceeded to Copenhagen. During his residence at 



FAVORABLE RECEPTION OF LAW. 199 

this place, having received an invitation from the 
British Ministry to return to his native country, he 
embarked on board the Baltic squadron, com 
manded by Sir John Norris, being accommodated 
in that admiral s own ship. Landing at the Nore, 
20th of October, 1721, he proceeded to London, was 
presented to King George I., by Sir John, and took 
a house in Conduit street, where he was daily 
visited by numbers of persons of the first quality 
and distinction. 

The favorable manner in which Mr. Law was 
received, occasioned no small umbrage to the anti- 
ministerial party, and was judged of sufficient im 
portance to occupy the attention of Parliament. 
For when the House of Lords met on the 26th of 
October, Earl Coningsby represented to that august 
assembly how dangerous it might be on several 
accounts to entertain and countenance such a man 
as Mr. Law, and desired that a day might be 
appointed for taking this matter into consideration. 
Their lordships having appointed the 9th Novem 
ber for the discussion of this business, Earl 
Coningsby on that day resumed his argument, say 
ing that for his part he could not but entertain 
great jealousy of a person who had done so much 
mischief in a neighboring kingdom, and who, being 
so immensely rich as he was reported to be, might 



200 MEMOIR OF JOHN LAW. 

do a great deal more hurt here by tampering with 
many who were grown desperate by being involved 
in the calamity occasioned by the fatal imitation of 
his pernicious projects ; that this person was the 
more dangerous, in that he had renounced not only 
his natural affection to his country and his allegi 
ance to his lawful sovereign, by being naturalized 
in France, and openly countenancing the 
Pretender s friends ; but, which was worst of all, 
and weighed most with him, that he had also 
renounced his God by turning Roman Catholic; 
concluding, that their lordships ought to inquire 
whether Sir John Norris had orders to bring him 
over. To this last part of the earl s speech, Lord 
Carteret answered in substance, that Mr. Law had, 
many years ago, the misfortune to kill a gentleman 
in a duel, but that, having received the benefit of 
the king s clemency, and the appeal lodged by the 
relatives of the deceased being taken off, he was 
come over to plead his majesty s gracious pardon ; 
that there was no law to keep an Englishman out 
of his own country ; and as Mr. Law was a subject 
of Great Britain, it was not even in the king s power 
to hinder him from coming home if he thought fit. 
To this Lord Trevor replied, that Mr. Law was 
indeed a subject of Great Britain, and, therefore, as 
such, had an undoubted right to come into the 



LETTER TO MRS. HOWARD. 201 

kingdom ; but that the circumstance of a person of 
his character being brought on board of an English 
Admiral, and at this juncture, might deserve the 
consideration of the House. Earl Cowper spoke 
much to the same effect; but the matter was 
suffered to drop ; and Mr. Law, on the 28th of 
November following, pleaded at the bar of the 
King s Bench, his majesty s pardon for the murder 
of Mr. Edward Wilson in 1694, being attended, on 
this occasion, by the Duke of Argyle, the Earl of 
May, and several other friends. 

Among the letters to and from the Countess of 
Suffolk is one from Mr. Law to her, then Mrs. 
Howard, dated Tuesday, of this tenor : " Can you 
not prevail on the duke to help me something more 
than the half year ? or is there nobody that could 
have good nature enough to lend me one thousand 
pounds ? I beg that if nothing of this can be done, 
that it may only be betwixt us two, as I take you 
as my great friend ; and I am very well assured of 
it by the honor I had done me yesterday at court 
by the king. I had another letter yesterday from 
France with the same thing over again. Excuse 
this, dear madam, and only put yourself in my 
place and know at the same time that you are the 
only friend I have." WOOD. 

9* 



MEMOIR OF JOHN LAW. 

(9.) "When I retired to Guermande, I had no 
hopes that the regent would have permitted me to 
leave the kingdom ; I had given over all thoughts 
thereof when your highness sent to inform me of 
his intention to accord that permission, and, the 
next day, immediately on receiving the passports I 
set off. Consider, my lord, if, being in the country, 
removed from my papers and books, it was in my 
power to put in order affairs that required not 
only leisure, but also my presence in Paris, to 
arrange properly ; and if it is not a piece of great 
injustice for the India Company to wish to take 
advantage of the condition to which I was re 
duced, and of the dishonest conduct of clerks, in 
requiring from me payment of sums I do not, in 
fact, owe, and which, even though I had been 
owing, were, as I have shown, expended for their 
service, and payable in actions or notes, of which 
effects belonging to me they at that time had, and 
still have, on their books to the amount of double 
or treble the sum they demand. No, my lord, I 
cannot bring myself to accuse the Company of so 
much as the intention to injure me. That Company 
owes its birth to me. For them I have sacrificed 
everything, even my property and my credit, being 
now bankrupt, not only in France, but also in all 
other countries. For them I have sacrificed the 



LAW S DISINTERESTEDNESS. 203 

interests of my children, whom I tenderly love, and 
who are deserving of all my affection ; these child 
ren, courted by the most considerable families in 
France, are now destitute of fortune and of esta 
blishments. I had it in my power to have settled 
my daughter in marriage in the first houses of Italy, 
Germany, and England ; but I refused all offers of 
that nature, thinking it inconsistent with my duty 
to, and my affection for, the state in whose service 
I had the honor to be engaged." WOOD. 




CHAPTER X. 

Recapitulation Comparison between this and other financial catas 
trophes Reflections. 



s 



IEX70N HOUSE 



CHAPTEE X. 

LET us recapitulate the events of the system, in 
order to review the whole and understand more 
clearly the causes of its downfall. 

A Scotchman, going from a poor country into the 
midst of a rich one, had been struck with the spec 
tacle of an extensive circulation, and had been led 
to think that all prosperity originated in an abun 
dance of money. Perceiving that banks had the 
means of increasing the amount of money by giving 
to paper the currency of coin, he conceived the plan 
of a general bank, uniting commercial enterprises 
with the administration of the public revenue, issu 
ing paper money for large payments, coin being 
reserved for the smaller; thus joining to the crea 
tion of an abundant circulation that of a convenient 
and profitable investment. 

Repulsed in different countries, this Scotchman 
was listened to in France, where he found a govern 
ment reduced to expedients and inclined to adopt 
new ideas. He established, at first, a private bank, 

207 



208 MEMOIR OF JOHN LAW. 

which the need of an institution for credit caused to 
succeed. He then established, but entirely distinct 
from the bank, a commercial company, to which he 
granted privileges very different in their nature, 
designing to unite it with the bank eventually, and 
complete the vast system which he had projected. 
The first shares of the company were delivered to 
holders of different government securities which re 
presented the floating debt, so that the creditors of 
the Treasury were paid with the privileges which 
constituted the fortune of the company. Soon, Law 
transferred to this company the principal leases of 
the revenue, on the condition that it should assume 
the funded debt, amounting to sixteen hundred mil 
lions. In this way all the creditors of the state 
were gradually to become shareholders in the com 
pany, and although they received only three per 
cent, on their capital, they would find their income 
increased by the profits of an immense enterprise. 
The project was accomplished : the sixteen hundred 
millions were transferred; but, managed without 
proper caution, they were precipitated upon the 
shares by the apprehension of the public that the 
investment would be taken up immediately. The 
shares rose to thirty-six times their cost, and the 
debt which, transformed into shares, should have 
been two billions at the utmost, rose to eight or ten. 



RECAPITULATION. 209 

A universal intoxication seized the imagination of 
everybody. People hastened no longer to seek an 
investment, but to make a fortune by the marvel 
lous rise in the value of capital. A crowd of landed 
proprietors sold their estates, which did not increase 
in value, to purchase this imaginary property, 
which increased in value hourly. Then the holders 
of the shares, better informed than those who came 
later, hastened to dispose of them for wealth which 
was real. This example was followed, and every 
one wished to realize. From this moment, the fic 
titious being contrasted with the real, the illusion 
ceased, and the decline of the shares soon became 
rapid. Those who had seen the fictitious capital 
rise to ten billions, now saw it fall to eight, and 
then to six billions, and gave themselves up to de 
spair. It was proper to lament this depreciation, 
but not to attempt to prevent a catastrophe which 
had become inevitable. Law, who had permitted 
people to idolize him for this sudden creation of 
wealth, committed the fault of attempting to main 
tain it, and he conceived the unfortunate plan of 
uniting the shares to the bank-notes. He attempted 
to establish the value of the notes by obliging the 
use of them in all payments above one hundred 
francs, and prohibiting the possession of more than 
five hundred francs in coin at a time. He then 



210 MEMOIR OF JOHN LAW. 

fixed the value of the shares in notes, and ordered 
that a share should be received at the bank for nine 
thousand francs in notes. Immediately, the shares 
were exchanged for this forced money, and for all 
kinds of property which could be bought. What 
followed ? The imaginary capital declined in the 
form of notes as rapidly as it would have done in 
the form of shares ; only the notes, which might 
have been saved, were sacrificed. Every one who 
had anything to sell refused the notes in payment, 
or demanded four times the value of their property. 
Only creditors, who were bound by their contracts, 
were forced to accept the notes at their full nomi 
nal value, and they were ruined. There was an 
attempt to reduce the nominal value on the 21st of 
May, in order to end this financial fiction ; but a 
violent clamor arose, the attempt was abandoned, 
and the fiction was suffered to continue. The ruin 
of the system was none the less inevitable, for so 
monstrous an imposition could not maintain itself. 
The system must be abolished, the shares and notes 
converted into government securities, and the old 
form of the public debt resumed, after the most 
frightful disorders, and the ruin of so many fortunes. 
Such was the system of Law, and its sad results. 

If this financial catastrophe is compared with 
that of the " assignors" and of the Bank of Eng- 



COMPARISON WITH OTHER CRISES. 211 

land in the present century, a remarkable re 
semblance will be seen in the events of a credit 
system, and useful lessons can be drawn from the 
comparison. 

Credit always anticipates the future, by employ 
ing values yet to be produced and using them as 
already existing. 

Law, anticipating the success of a vast com 
mercial enterprise, represented the profits of it by 
shares, and used them to pay the public debt. 

The French revolution wished to pay for the eccle 
siastical offices which had been abolished, the debt of 
the monarchy and the expenses of a universal war, 
with the national property ; this property not being 
disposable, on account of its quantity and the want of 
confidence, it anticipated the sale and represented 
the results by papers called " assignats" (NOTE.) 

The Bank of England, by discounts and by loans 
to government, anticipated and accepted as real 
two kinds of values ; commercial bills, which repre 
sented immense quantities of colonial produce, dif 
ficult to define, and the obligations of the govern 
ment, values infinitely fluctuating and depending 
upon the success of war and policy. 

In these three cases there was a supposititious 
value ; the shares of Law represented commercial 
successes and fiscal products, which were very un- 



212 MEMOIR OF JOHN LAW. 

certain; the assignats represented the price of 
goods, which would perhaps be diverted from their 
revolutionary destination; the notes of the Bank 
of England represented obligations which the 
government might not be able to fulfill. 

The crisis produced by loss of confidence differed 
in the three cases according to the difference of cir 
cumstances. The prestige of a newly discovered 
country, the sudden displacement of an enormous 
sum, caused the shares of Law to rise in an ex 
travagant manner. But a blind confidence must 
soon lead to a blind despair. It is well founded 
confidence, based upon the real success of labor, 
slow in its progress, which alone is exempt from 
these sudden reverses which resemble tempests. 
The assignats could not be ruined in the same 
manner. They could not rise, because they repre 
sented the value of land, which is not susceptible 
of increase. But as the success of the revolution 
began to be distrusted, and doubts arose as to the 
maintenance of the national sale, they declined ; 
and as they declined, the government, to supply 
the deficiency in value, was obliged to double the 
issue, and the repletion contributed, with the dis 
trust, to depreciate them. The notes of the Bank 
of England, based upon merchandise which might 
depreciate, and upon engagements of the govern- 



COMPARISON CONTINUED. 213 

ment, which the victories of France caused to 
dimmish in value, suffered a decline, but compara 
tively a moderate one, because only one part of the 
property pledged was destructible. 

In the three cases, the authorities wishing to 
compel confidence, met with a failure proportioned 
to the doubtful value of the securities, the reality of 
which it attempted to establish by violent measures. 

Law fixed the value of the shares in notes, and 
attempted to fix the value of the notes themselves, 
by rendering the acceptance of them compulsory at 
a determined rate. 

The revolutionary French government gave a 
forced currency to the assignats, and punished with 
death those who refused to take them at their 
nominal value. 

The Bank of England was authorized to refuse to 
pay its notes at sight. 

The result of these different measures was a 
deplorable disturbance in every kind of exchange. 
All those making bargains would not accept the 
depreciated money at its nominal rate, and de 
manded double or triple price, according to the 
degree of depreciation ; but those who were obliged 
to accept payment on a previous bargain in a 
word, all creditors were ruined, because they were 
obliged to accept a value purely nominal. 



214: MEMOIR OF JOHN LAW. 

In proportion as the resistance to the oppression 
increased, the authorities became more tyrannical, 
because they invaded domestic life. Law forbade 
the possession of more than five hundred francs in 
coin, and authorized informations. The revolution 
ary government, more violent and extreme in 
everything, established a maximum and regulated 
the rate of all exchanges, but succeeded no better. 
The Bank of England, more moderate, because the 
values which it proclaimed as certain were nearer 
the true standard, threw itself upon the patriotism 
of the London merchants, who assembled and de 
clared that they would receive the notes in pay 
ments. The notes continued to circulate at a 
moderate discount. 

But forced measures cannot prevent the fall of 
what must inevitably perish. The eight or ten bil 
lions of Law did not fall below what they were really 
worth. The assignats, issued beyond all proportion 
to the property which they represented, became 
utterly worthless. The Bank of England notes de 
clined twelve and fifteen per cent., and rose again 
after the general peace, when specie payment was 
resumed, but they would have succumbed if Napo 
leon had employed the infallible aid of time against 
the English policy. 

Certain general truths appear from these facts. 



FORCED CREDIT. 215 

Credit ought to represent positive values, and 
should be at most a very limited anticipation of 
these values. 

As soon as values become uncertain, force can 
accomplish nothing to sustain them. 

Forced values are refused by all who are at 
liberty to refuse them, and ruin those who, by pre 
vious contracts, cannot refuse them. 

Thus falsehood, oppression, spoliation, destruc 
tion of all fortunes, these are the ordinary result of 
a false credit soon followed by a forced credit. The 
least deplorable of these experiences, which caused 
but a momentary embarrassment, that of the Bank 
of England, owed its safety to a successful battle. 
The entire wealth of a country should never depend 
upon the deceitful favors of fortune. 

Law, unhappy man, after having made Europe 
resound with the name of himself and of his sys 
tem, travelled through different countries, and at 
last took up his residence at Yenice. Notwith 
standing the capital which he had taken to France 
and that which he had left there, he ended his life 
in poverty. 

Continuing in correspondence with the Duke of 
Orleans, and afterward with the Duke of Bourbon, 
he never ceased to claim that which the French 
government had the injustice to refuse him. He 



216 MEMOIR OF JOHN LAW. 

wrote to the Duke of Bourbon, " ^Esop was a model 
of disinterestedness, however, the courtiers accused 
him of keeping treasure in a trunk which he visited 
often ; they found there only the garment which he 
possessed before he became a favorite of the prince. 
If I had saved my garment, I would not change 
condition with those employed in the highest 
places ; but I am naked ; they require that I shall 
subsist, without having any property to maintain 
me, and that I shall pay my debts when I have no 
money." Law could not obtain the old garment 
which he demanded. A few years after his depar 
ture from France, in 1729, he died at Venice, 
destitute, miserable and forgotten. 



NOTES TO CHAPTEE X. 



LAW S CHARACTER CIRCUMSTANCES IN HIS CAREER. 



(1.) 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 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 in 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 jewelry, 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 

10 21T 



318 MEMOIR OF JOHN LAW. 

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. MACKAY. 

(2.) The scandal of the time accused the regent 
of having absorbed the money of the kingdom to 
promote his own ambitious views, and it is certain 
that he died seven millions in debt. Law Was 
accused of having transferred property from France 
to foreign countries on his private account. He 
lived some time in London on the liberality of the 
Marquis of Lassay, and died in Yenice in 1729, in 
a condition but little removed from indigence. I 
saw his widow at Brussels as humble as she had 
been proud and triumphant at Paris. Such revolu 
tions are not the least useful subjects of history. 
VOLTAIRE, 

(3.) It was imagined in France that he had car 
ried away with him a large treasure. Dubois, who 
had become his enemy, sent a certain Abbe La 
Riviere with instructions .to watch the slightest 
movements of the ex-Comptroller of the Finances. 
The spy could discover nothing unfavorable to him. 
The fact is, that Law resumed the old occupation 



NOTES. 219 

to which he owed his first wealth, and lived by 
gaming, which was not discreditable at Yenice. 
COCHUT. 



He was so little attached to his property, 
that he offered it for distribution among those who 
had lost by his operations, and only wished to retain 
an income of 30,000 francs. This offer was ad 
mired and rejected, because people had less desire 
to aid the unfortunate than to destroy him. 
COCHUT. 

(5.) Lady Law would not quit Paris until she 
had paid all the tradesmen s bills which the family 
owed. WOOD. 

(6.) "When Law was at the height of his power 
he showed most the qualities of a good minister. 
He abolished vexatious taxes, modified the tariff 
and the excise on articles where it was most 
burdensome to the people, recalled, by the en 
couragements offered by government, many French 
men who had been forced to expatriate themselves, 
liberated prisoners for d.bt, communicated to in 
dustry almost too great activity, undertook public 
works of great utility, reclaimed lands, took mea 
sures to relieve the poor all this while the system 



MEMOIR OF JOHN LAW. 

was in greatest vogue, and he was most caressed 
and flattered. 

Another real benefit, proceeding from the same 
inspirations, was the establishment of gratuitous 
instruction in the University of Paris. The Parisians 
were so touched by this liberality that they wished 
to celebrate it by a grand procession, in which all 
classes should be represented, even to the most 
humble artisan. These generous efforts, coincident 
with the first successes of the system, explain the 
infatuation of the nation, and justify its enthusiasm 
of a moment for the strange and powerful man who 
had produced so many phenomena. COCHUT. 

(7.) He wrote, " I do not assume to myself any 
merit from this conduct, and I never so much as 
spoke upon the subject to the regent. But I can 
not help observing, that this mode of behavior is 
diametrically opposite to the idea my enemies wish 
to impress to me ; and surely all Europe ought to 
have good opinion of my disinterestedness, and of 
the condition to which I am reduced, since I no 
longer receive any proposals of marriage for my 
children. My lord, I conducted myself with a still 
greater degree of delicacy, for I took care not to 
have my son or my daughter married even in 
France, although I had the most splendid and 



NOTES. 221 

advantageous offers of that kind. I did not choose 
that any part of ray protection should be owing to 
alliance, but that it should depend solely upon the 
intrinsic merits of my project." WOOD. 

(8.) To his moral character no compliments can 
be paid. His uncommon personal endowments 
generally insured him success in affairs of gallantry, 
and to these unworthy pursuits he devoted too much 
of his time. Lockhart Carnwath relates that even 
before he left Scotland, he was " nicely expert in 
all manner of debaucherie." It is said that he lived 
several years in a course of adultery with an English 
lady, whom he had persuaded to elope from her 
husband, and to accompany him in his rambles 
abroad ; and the Due de Eichelieu speaks in very f 
plain terms of the attachment the Duchess Dowager ^ 
of Orleans had for Mr. Law. The excess to which 
he carried the destructive vice of gambling has. 
been already noticed. 

Mr. Law married Lady Catharine Knollys, third 
daughter of Nicholas third Earl of Banbury, by his 
second wife Anne, daughter of William Lord She- 
rard. Lady Catherine, who was first married to a 
gentleman of the name of Lenor, by whom it does 
not appear she had any issue, was born 1669, and 
died 1747, according to the following pedigree, 



222 MEMOIR OF JOHN LAW. 

communicated by the late Earl of Wiltshire and 
Banbur y : 

Thomas Boleyn, Earl of Wiltshire and Ormond. 



Lady Anne Boleyn, Lady Mary Boleyn, 

married to King Henry VIII. married to William Carey. 

Elizabeth, Queen of England. Catherine Carey, married to 

Sir Francis Knollys, K. G. 

William, Earl of Banbury. 
Nicholas, Earl of Banbury. 

Lady Catherine Knollys, 
born 1669, died 1747. 
WOOD. 

(9.) Dying, he left only a few pictures, and the 
ring worth 10,000 (ante, NOTE 1) francs, which he 
used to pawn when the fortune of the gaming-table 
was unfavorable to him. 

After his departure, the following genealogy of 
the System was posted on the walls of the streets of 
Paris: Belzebub begat Law Law begat Missis 
sippi Mississippi begat the System the System 
begat Paper Paper begat the Bank the Bank be 
gat Bank-notes Bank-notes begat Shares Shares 
begat Stockbrokerage Stockbrokerage begat the 
Register the Register begat the Account the Ac 
count begat the general Schedule the Schedule 
begat Zero from whom all power of reproduction 
was taken away. COOHUT. 



NOTES. 223 

(10.) Assignat was the name given to a peculiar 
species of paper money issued during the first 
French revolution. The influence of the system, 
operating along with the other attempts to regulate 
trade, forms a prominent feature in the calamitous 
history of the epoch. The share borne in it by the 
assignats is at the same time a memorable instance, 
for the use of the economist and financier, of the 
hopelessness of projects for creating or preserving 
national wealth by an issue of paper money, not the 
representative of available wealth and real business 
transactions. The first issue of assignats was made 
in the security of the forfeited ecclesiastical pro 
perty, and was adopted as a preferable alternative 
to throwing the forfeited lands on the market, 
which it was no doubt judiciously believed that so 
large an amount of property would glut. The 
holder of the assignats might use them as money or 
claim the land which they represented. As more 
forfeitures occurred, the issue of assignats increased. 
But it soon ceased to be measured by property and 
was enlarged according to the exigencies of the 
revolutionary government. The paper money fell 
to half, then to a sixth part of the value of the same 
denomination in silver, and sinking rapidly through 
successive grades of decrease, silver held at last the 
value of one hundred and fifty times its denomina 
tion in paper. In August of 1793, 3,776 millions 
of francs were thus put in circulation ; and virtu 
ally, the assignats became worthless. 



224 MEMOIR OF JOHN LAW. 

(11.) " The cupidity which it (speculation) ex 
cited among all classes of people, from the very 
lowest up to magistrates, bishops, and even princes, 
distracted all attention from public affairs, and all 
minds from political ambitious schemes, by filling 
them with the fear of losing and avidity of gain. 
It was a new and prodigious game in which all citi 
zens bet, one against another. Desperate gamblers 
will not quit their cards to annoy the government. 
It happened, from a series of causes perceptible only 
to the most experienced and most sagacious under 
standing, that a system entirely chimerical created 
a real commerce and revived the Indian Company, 
formerly established by the celebrated Colbert, and 
ruined by the wars. In fine, although there were 
many private fortunes ruined, the nation soon be 
came more commercial and more rich. This system 
quickened the intelligence as civil war arouses the 
courage of a nation. 

" The fury for speculation was an epidemic dis 
order which spread into Holland and England. It 
merits the attention of posterity, for it was not the 
political interests of two or three princes which dis 
tracted nations. The people precipitated themselves 
into this folly, which enriched a few families and 
which reduced so many others to beggary." 



NOTES. 



225 



Historians are divided in opinion as to whether 
they should designate Law as 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, mo re 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 cal 
culate upon the avaricious frenzy of a whole nation ; 
he did not see that confidence, like mistrust, could 
be increased almost ad injmitum, 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 

lo* 



226 MEMOIR OF JOHN LAW. 

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 the tide of de 
struction ; and when he endeavored 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. 



THE DARIEN EXPEDITION 



PREFACE 

TO 

THE DARIEN EXPEDITION 

AND 

SOUTH SEA SCHEME. 



IT seems to us appropriate, to add to the history of the Missis 
sippi Bubble, brief accounts of the Darien Expedition and the South 
Sea scheme, which were nearly contemporaneous with it, resembled 
it in many particulars of their progress, and afford a similar illustra 
tion of the speculative fury which, at that epoch, in their respective 
countries, intoxicated all classes alike, noble and humble, rich and 
poor, learned and ignorant. 

They are unique in history for the magnitude and extent of their 
enterprise, for the effect they produced upon the manners and 
habits of the people, and for the wide-spread ruin in which they 
terminated ; a result immediately disastrous to a prodigious num 
ber of individuals, but ultimately beneficial to the nation. Specula 
tion has never, before or since, led people into such violent 
excesses, or brought ruin to such a number of persons of all ages, 
sexes and conditions ; yet the same spirit pervades all countries 
and all times. The experience of the last thirty years in our own 
country, with its numerous crises, affords ample evidence of its pre 
sence here, and we hope that a history of its most remarkable 
manifestations in other countries may be found interesting and 
suggestive. 



230 INTRODUCTION. 

The account of -the Darien Expedition is taken from the " Encyclo 
paidia Britannica," and is the most complete and authentic which 
has yet been published. The history of the South Sea scheme is 
taken from Mackay s "Memoirs of Extraordinary Popular 
Delusions," which contains, also, a list of the numerous absurd and 
monstrous projects which were eagerly embraced during the 
delirium of that financial fever. 



THE DARIEN EXPEDITION. 



OF the rise, progress, and catastrophe of this 
ill-fated undertaking, Sir John Dalrymple, in the 
second volume of his Memoirs of Great Britain 
and Ireland, has given a very interesting account, 
authenticated in every particular by unquestion 
able documents. The projector and leader of the 
Darien Expedition was a clergyman of the name 
of Paterson, who, having a strong desire to see 
foreign countries, made his profession the means 
of indulging it, by going to the western world on 
the pretence of converting the Indians to the reli 
gion of the old. During his residence there, he 
became acquainted with Captain Dampier and Mr. 
Wafer, who afterward published, the one his voy 
ages, the other his travels in the region where the 
separation is narrowest between the Atlantic and 
the Pacific oceans ; and both of whom appear to 



THE DAKIEN EXPEDITION. 

have been men of considerable observation. But 
he obtained much more knowledge from men who 
could neither . read nor write, by cultivating the 
acquaintance of some of the old buccaneers, who? 
after surviving their glories and their crimes, still, 
in the extremity of age and misfortune, recounted 
with transport the ease with which they had 
passed and repassed from one sea to the other, 
sometimes in hundreds together, and driving strings 
of mules before them loaded with the plunder of 
friends and of foes. Paterson having examined 
the places, satisfied himself that on the Isthmus 
of Darien there was a tract of country running 
across from the Atlantic to the Pacific, which the 
Spaniards had never possessed, and inhabited by a 
people continually at war with them; that along 
the coast, on the Atlantic side, there lay a string of 
islands called the Sambaloes, uninhabited, and full 
of natural strength and of forests, from w r hich last 
circumstance, one of them was called the island of 
the pines; that the seas there were filled witlT 
turtle and the manati or sea cow ; that midway 
between Porto-Bello and Carthagena, but nearly 
fifty leagues distant from either, at a place called 
Acta, in the mouth of the Darien, there was a 
natural harbor, capable of receiving the greatest 
fleets, and defended from storms by other islands 



THE DAEIEN EXPEDITION. 233 

which covered the mouth of it, and from, enemies, 
by a promontory which commanded the passage, 
and by hidden rocks in the passage itself; that, on 
the other side of the isthmus, and in the same tract 
of country, there were natural harbors, equally 
capacious and well defended ; that the two oceans 
were connected by a ridge of hills, which, by their 
height, created a temperate climate in the midst of 
the most sultry latitudes, and were sheltered by 
forests, but not rendered damp, because the trees 
grew at a distance from each other, and had very 
little underwood ; that, contrary to the usual barren 
nature of hilly countries, the soil was of a black 
mold, two or three feet deep, and producing spon 
taneously the fine tropical fruits and plants, roots 
and herbs ; that roads might be formed with ease 
along the ridge, by which mules, and even car 
riages, might pass from one sea to the other in the 
space of a day ; and consequently, that this passage 
seemed to be pointed out by nature as a common 
centre to connect together the trade and intercourse 
of the universe. 

Paterson knew that ships which stretch in a 
straight line from one point to another, and with 
one wind, run less risks \nd require fewer hands, 
than ships which pass through many latitudes, 
follow the windings of many coasts, and require 



234: THE DAEIEN EXPEDITION. 

many winds ; that vessels of seven or eight hundred 
tons burden are often to be met in the South Sea, 
navigated by not more than eight or ten hands, 
because these hands have little else to do than set 
their sails when they begin their voyage, and to 
take them in when they end it; that as soon as 
ships from Britain should get so far south as to 
reach the trade-wind, which seldom varies, that 
wind would carry them to Darien, and the same 
wind would carry ships from the Bay of Panama, 
on the opposite side of the isthmus, to the East 
Indies; that as soon as ships coming from the East 
Indies to the Bay of Panama got so far north as 
the latitude of 40, to reach the westerly winds, 
which about that latitude blow almost as regularly 
from the west as the trade-winds do from the east, 
these winds would carry them in the track of the 
Spanish Acapulco ships to the coast of Mexico, 
whence the land-wind, which blows forever from 
the north to the south, would carry them along the 
coast of Mexico into the Bay of Panama. Thus, 
in going from Britain, ships would encounter 
no uncertain winds except during their passage 
south into the latitude of the trade- wind; and in 
coming from India to the Bay of Panama they 
would meet no uncertain winds, except in their 
passage north to the latitude of the westerly winds, 



THE DAKIEN EXPEDITION. 235 

and in going from the other side of the isthmus to 
the east, with no uncertain wind whatsoever. Gold 
was seen by Paterson in some places on the isthmus ; 
and hence, an island on the Atlantic side was called 
the Gold Island, and a river on the side running to 
the Pacific was called the Golden Elver; but these 
were objects which he regarded not at that time, 
because far greater were in his eye, namely, the 
shortening of distances, the drawing of nations 
nearer to each other, the preservation of the valu 
able lives of seamen, and the saving in freight and 
in time, so important to merchants, and to an 
animal whose life is of so short duration as that of 
man. (NOTE 1.) 

By this obscure Scotchman a project was formed 
to settle, on this neglected spot, a great and power 
ful colony ; not as other colonies have, for the most 
part, been settled, by chance, and unprotected by 
the country whence they proceeded ; but by system, 
upon foresight, and to receive the ample protection 
of those governments to whom he was to offer his 
project. And certainly no greater idea has been 
formed since the time of Columbus. 

Paterson s original intention was to submit his 
project to England, as the country which had most 
interest in it, not only from the benefit common to all 
nations, of shortening the length of voyages to the 



236 THE DABIEN EXPEDITION. 

East Indies, but by the effect which it would have 
had in connecting the interest of her European, West 
Indian, American, African, and East Indian trade. 
Paterson, however, having few acquaintances, and 
no protection in London, thought of drawing the 
public eye upon him, and ingratiating himself with 
moneyed men and with great men, by assisting them 
to model a project, which was at that time in embryo, 
for erecting the Bank of England. But that hap 
pened to him which has happened to many project 
ors in his situation ; the persons to whom he applied, 
made use of his ideas, took the credit of them to 
themselves, were civil to him for a while, and 
neglected him afterward. He therefore communi 
cated his project of a colony only to a few persons 
in London, and these few discouraged him. 

He next submitted his project to the Dutch, the 
Hamburgers, and the Elector of Brandenburg; 
because, by means of the passage of the Ehine and 
Elbe through their states, he thought that the great 
additional quantities of East Indian and American 
goods which his colony would export to Europe 
would be distributed throughout Germany. The 
Dutch and Hamburg merchants, although they had 
most interest in the project, heard him with indiffer 
ence ; while the elector, who had very little inte 
rest in it, received him with honor and kindness ; 



THE DAEIEN EXPEDITION. 237 

but court arts and false reports soon lost him even 
that prince s favor. Paterson, on his return to 
London, formed a friendship with Mr. Fletcher, of 
Saltown, whose mind was inflamed with the love 
of public good, and all whose ideas to procure it 
had a sublimity about them. Fletcher brought 
Paterson down to Scotland, presented him to the 
Marquis of Tweeddale, then minister for that 
country ; and thereafter, with that power which a 
vehement spirit always possesses over a diffident 
one, persuaded the marquis, by arguments of 
public good and the honor which would redound to 
his administration, to adopt the project. Lord 
Stair and Mr. Johnston, the two secretaries of 
state, patronized those abilities in Paterson which 
they possessed in themselves ; and the lord advo 
cate, Sir James Stuart, the same person who had 
adjusted the Prince of Orange s declaration at the 
revolution, and whose son had married a niece 
of Lord Stair, went naturally along with his con 
nections. These persons, in June, 1695, procured 
a statute from parliament, and afterward a charter 
from the crown in terms thereof, " for creating a 
trading company to Africa and the New World, 
with power to plant colonies and build forts, by 
consent of the inhabitants, in places not possessed 
by other European nations." 



238 THE DAKIEN EXPEDITION. 

Peterson, now finding the ground firm under him, 
and that he was supported by almost all the power 
and talents of his country, the character of Flet 
cher, and the sanction of an act of parliament and 
royal charter, threw his project boldly before the 
public, and opened a subscription for a company. 
The frenzy of the Scotch nation to sign the Solemn 
League and Covenant never exceeded the rapidity 
with which they ran to subscribe to the Darien 
Company. The nobility, the gentry, the merchants, 
the people, the royal burghs, without the exception 
of one, and most of the other public bodies, sub 
scribed. Young women threw their little fortunes 
into the stock ; and widows sold their jointures to 
get the command of money for the same purpose. 
Almost immediately 400,000 were subscribed in 
Scotland, although there was not at that time above 
800,000 of cash in the kingdom. The famous 
Mr. Law, then a youth, afterward confessed that 
the facility with which he saw the passion of specu 
lation communicate itself, satisfied him of the pos 
sibility of producing the same effect by means of 
the same cause, but upon a larger scale, when the 
Duke of Orleans engaged him against his will to 
turn his bank into a bubble. Paterson s project, 
which had been received by strangers with fears 
when opened to them in private, filled them with 



THE DARIEN EXPEDITION. 239 

hopes when it came to them upon the wings of 
public fame ; for Colonel Erskine, son of Lord Card- 
rose, and Mr. Heldane of Gleneaghs, the one a 
generous branch of a generous stem, and the other 
a country gentleman of fortune and character, 
having been deputed to receive subscriptions in 
England and on the continent, the English sub 
scribed 300,000, and the Dutch and Hamburgers 
200,000. (NOTE 2.) 

In the meantime, the jealousy of trade, which 
lias done more mischief to the commerce of England 
than all other causes put together, created an alarm 
in England ; and the Houses of Lords and Com 
mons, without previous inquiry or reflection, on the 
13th of December, 1695, concurred in a joint 
address to the king against the establishment of the 
Darien Company, as detrimental to the interest of 
the East India Company. Soon afterward the 
Commons impeached some of their own country 
men for being instrumental in erecting the com 
pany, and also some of the Scotch nation, one of 
whom was Lord Belhaven ; that is to say, they 
arraigned the subjects of another country for 
making use of their own laws. Among six hun 
dred legislators, not one had the sense, not to say 
genius, to propose a committee of both parliaments 
to inquire into the principles and consequences of 



24:0 THE DAKIEN EXPEDITION. 

the establishment; and if these should, upon 
inquiry, be found sound and beneficial, that the 
advantage should be communicated, by a participa 
tion of rights, to both nations. The king s answer 
was, that he had been ill-advised in Scotland. He 
soon afterward changed his Scottish ministers, and 
sent orders to his residents at Hamburg to present 
a memorial to the senate, in which he disowned the 
company, and warned them against all connections 
with it. The senate transmitted the memorial to 
the assembly of merchants, who returned it with the 
following spirited answer : " We look t. pon it as a 
very strange thing, that the king of Britain should 
oifer to hinder us, who are a free people, to trade with 
whom we please ; but are amazed to think that he 
would hinder us from joining with his own subjects 
in Scotland, to whom he had lately given such large 
privileges, by so solemn an act of parliament." 
But the merchants, seeing the scheme discouraged 
by their governments, were soon intimidated ; and 
the Dutch, Hamburg, and London merchants with 
drew their subscriptions. (NOTES 3 and 4.) 

The Scotch, not discouraged, were rather ani 
mated by this oppression ; for they converted it into 
a proof of the envy of the English, and of their con 
sciousness of the great advantages which were to 
flow to Scotland from the colony. The company 
proceeded to build six ships in Holland, from thirty- 



THE DAKIEN EXPEDITION. 241 

six to sixty guns, and they engaged 1,200 men for the 
colony ; amongst whom were younger sons of many 
of the noble and ancient families of Scotland and 
sixty officers who had been disbanded at the peace, 
who carried with them such of their private men, 
generally raised on their own or the estates of their 
relations, as they knew to be faithful and brave, 
most of them being Highlanders. The Scotch par 
liament, on the 5th of August, 1698, unanimously 
addressed the king to support the company. The 
lord president, Sir Hugh Dalrymple, brother of 
Lord Stair, and head of the bench, and the lord 
advocate Sir James Stuart, head of the bar, jointly 
drew up memorials to the king, able in point of 
argument, information, and arrangement, in which 
they defended the rights of the company upon the 
principles of constitutional and of public law ; and 
neighboring nations, with a mixture of surprise and 
respect, saw the poorest kingdom of Europe send 
ing forth the most gallant and the most numerous 
colony which had ever set out from the old to the 
new world. On the 26th day of July, 1698, the 
whole city of Edinburgh poured down to Leith to 
see the colony depart, amidst the tears, and prayers, 
and praises of relations, and friends and country 
men. Many seamen and soldiers, whose services 
had been refused, because more had offered them- 

11 



242 THE DAKIEN EXPEDITION. 

selves than were needed, were found hid in the 
ships, and, when ordered ashore, clung to the ropes 
and timbers, imploring to go without reward along 
with their companions. Twelve hundred men sailed 
in five stout ships, and arrived at Darien in two 
months, with the loss of only fifteen of their peo 
ple. At that time it was in their power, most of 
them being well born, and all of them hardily bred 
and inured to the fatigues and dangers of the late 
war, to have marched from the northmost part of 
Mexico to the southmost point of Chili, and to have 
overturned the whole empire of Spain in South 
America. But, modest respecting their own and 
their country s character, and afraid of its being 
alleged that they had plunder, and not a settle 
ment in view, they began with purchasing lands 
from the natives, and sending messages of amity to 
the Spanish governors within their reach ; and then 
fixed their station at Acta, calling it New St. 
Andrew, from the name of the titular saint of Scot 
land, and the country itself New Caledonia. One 
of the sides of the harbor being formed by a long 
narrow neck of land which ran into the sea, they 
cut it across so as to. join the ocean and harbor. 
Within this defence they erected their fort, planting 
upon, it fifty pieces of cannon. On the other side 
of the harbor there was a mountain about a mile in 



THE DARIEN EXPEDITION. 243 

height, on which they placed a watch-house, which, 
in the rarefied air within the tropics, so favorable 
for vision, gave them an immense range of pros 
pect, in order to prevent all surprise. To this 
place it was observed that the Highlanders often 
repaired to enjoy the cool air, and to talk of their 
friends whom they had left behind on their native 
hills. The first public act of the colony was to 
publish a declaration of freedom of trade and reli 
gion to all nations. This luminous idea originated 
with Paterson. 

But the Dutch East India Company having 
pressed the king, in concurrence with his English 
subjects, to prevent the settlement at Darien, orders 
had been sent from England to the governors of 
the West Indian and American colonies, to issue 
proclamations against giving assistance, or even 
holding correspondence with the colony ; and these 
were more or less harshly expressed, according to 
the temper of the different governors. The Scotch, 
trusting to far different treatment and to the sup 
plies which they expected from these colonies, had 
not brought sufficient provisions along with them, 
and fell into diseases from bad or inadequate food ; 
but the more generous savages, by hunting and 
fishing for them, afforded them that relief which 
fellow Britons had refused. They lingered eight 



244 THE DARIEN EXPEDITION. 

months, waiting in vain for assistance from Scot 
land and almost all of them either died out or 
quitted the settlement. Paterson, who had been 
the first to enter the ship at Leith, was the last to go 
on board at Darien. 

During the space of two years, while the estab 
lishment of his colony had been in agitation, Spain 
had made no complaint to England or Scotland 
against it. The Darien council even averred in 
their papers, which are in the Advocates Library, 
that the right of the company was debated before 
the king, in presence of the Spanish ambassador, 
ere the colony left Scotland. But now, on the 3d 
of May, 1698, the Spanish ambassador at London 
presented a memorial to the king, in which he com 
plained of the settlement at Darien as an encroach 
ment on the rights of his master. (KOTES 5, 6 and 7.) 

The Scotch, ignorant of the misfortunes of their 
colony, but provoked at this memorial, soon after 
ward sent out another colony of 1,300 men, to sup 
port an establishment which was now no more ; 
but this last proved unlucky in its passage. One 
of the vessels was lost at sea, many men died on 
board, and the rest arrived at different times, bro 
ken in their health, and disappointed when they 
heard the fate of those who had gone before them. 
Added to the misfortunes of the first colony, the 



THE DAEIEN EXPEDITION. 245 

second had a misfortune peculiar to itself. The 
General Assembly of the church of Scotland sent 
out four ministers, with orders to take charge of the 
souls of the colony, and to erect a presbytery, with 
a moderator, clerk, and record of proceedings ; to 
appoint ruling elders, deacons, overseers of the 
manners of the people, and assistants in the exer 
cise of church discipline and government, and to 
hold regular kirk-sessions. When they arrived, the 
officers and gentlemen were occupied in building 
houses for themselves with their own hands, because 
there was no assistance to be got from others ; yet 
the four ministers complained grievously that the 
council did not order houses to be immediately built 
for their accommodation. They had not had the 
precaution to bring with them letters of recom 
mendation from the directors at home to the coun 
cil abroad; and on these accounts, not meeting 
with all the attention they expected from the higher, 
they paid court to the inferior ranks of the colo 
nists, and by this means sowed divisions in the 
colony. They exhausted the spirits of the people, 
by requiring their attendance at sermon four or five 
hours at a time, relieving each other by preaching 
alternately, but allowing no relief whatever to their 
hearers. The employment of one of the days set 
aside for religious exercise, which was Wednesday 



246 THE DAEIEN EXPEDITION. 

they divided into three parts ; thanksgiving, humi 
liation, and supplication, in which three ministers 
followed one another. And as the service of the 
church of Scotland, consists of a lecture with a 
comment, a sermon, two prayers, three psalms, and 
a blessing, the work of the day, upon an average of 
the length of the service in that age, could not 
occupy less than twelve hours, during which time 
the colony was collected, and kept crowded together 
in the guard-room which was used as a church, in a 
tropical climate, and in a sickly season. The 
preachers presented a paper to the council, which 
they took care to make public, requiring them to 
set aside a day for solemn fasting and humiliation ; 
and, under pretence of enumerating the sins of the 
people, they poured out abuse on their rulers. They 
damped the courage of the people by continually 
representing hell as the termination of life to most 
men, because most men are sinners. Carrying the 
presbyterian doctrine of predestination to an 
extreme, they put a stop to all exertions, by show 
ing that the consequences of these depended not on 
the individuals by whom they were made, but on 
an all-controlling and irresistible power, by which, 
independently of human efforts and volitions, every 
thing was necessarily determined. They converted 
the numberless accidents to whicli soldiers and sea- 



THE DARIEN EXPEDITION. 247 

men are exposed into immediate judgments of God 
against their sins ; and having resolved to quit tne 
settlement, they, in excuse for doing so, wrote bit 
ter letters to the general assembly against the 
characters of the colonists, and the advantages of 
the colony itself. 

One of these men, in a kind of history of the 
colony which he published, exulted with a savage 
triumph over the misfortunes of his countrymen. 
" They were such a rude company," said he, " that 
I believe Sodom never declared such impudence in 
sinning as they. An observant eye might see that 
they were running the way they went ; hell and 
judgment was to be seen upon them, and in them, 
before the time. Their cup was full ; it could hold 
no more : they were ripe ; they must be cut down 
with the sickle of the wrath of God." The last 
party which joined the second colony at Darien, 
after it had been three months settled, was Captain 
Campbell of Finab, with a company of the people 
of his own estate, whom he had commanded in 
Flanders, and whom he carried to Darien in his 
own ship. On their arrival at New St. Andrew, 
they found that intelligence had been received that 
a Spanish force of 1,600 men, which had been 
brought from the coast of the South Sea, lay 
encamped at Tubucantee, waiting there till a 



248 



THE DARIEN EXPEDITION. 



Spanish squadron of eleven ships which was ex 
pected should arrive, when they were jointly to 
attack the fort. The military command was offered 
to Captain Campbell, in compliment to his reputa 
tion and to his birth as a descendant of the families 
Broadalbane and Athol. In order to prevent a 
joint attack, he resolved to attack first; and there 
fore on the second day after his arrival, he marched 
with two hundred men to Tubucantee, before his 
approach could be known to the enemy, stormed 
the camp in the night-time, dissipated the Spanish 
force with much slaughter, and returned to the fort 
the fifth day. But he found the Spanish ships off 
the harbor, their troops landed, and almost all hope 
of aid or of provisions cut off; yet he stood a siege 
of nearly six weeks, until almost all the officers had 
died. The enemy, by their approaches, had cut off 
his well, and his ammunition had been so far ex 
pended that he was obliged to melt the pewter 
dishes of the garrison into balls. The garrison then 
capitulated, and obtained not only the common 
honors of war and security for the property of the 
company, but as if they had been conquerors, even 
exacted hostages for the performance of the condi 
tions. Captain Campbell alone desired to be 
excepted from the capitulation, saying that he was 
sure the Spaniards would not forgive him the 



THE DAETEN EXPEDITION. 249 

mischief which he so lately had done them. But 
the brave, by their courage, often escape that death 
which they seem to provoke. Captain Campbell 
made his escape in his vessel, and arrived safely at 
JN~ew York, whence he proceeded to Scotland, 
where the company presented him with a gold 
medal, in which his bravery was duly commemo 
rated. The lord-lyon king-at-arms, whose office it 
is in Scotland to confer badges of distinction upon 
honorable actions according to the rules of heraldry, 
also granted him a Highlander and an Indian as 
supporters to his coat of arms. 

But a harder fate attended those whom. Captain 
Campbell had left at Darien. They were so weak 
in their health as not to be able to weigh up the 
anchors of the Rising Sun, one of their ships, which 
carried sixty guns; the generous Spaniards, how 
ever, assisted them. In going out of the harbor 
the vessel ran aground. The prey was tempting ; 
and, to obtain it, the Spaniards had only to stand 
by and look on ; but they showed that mercy to the 
Scotch in distress, which- one of their own country 
men, General Elliot, afterward returned to the 
posterity of these Spaniards at the siege of Gibral 
tar. The Darien ships being leaky and weakly 
manned, were obliged in their voyage to take 
shelter in different ports belonging to Spain and 

11* 



250 THE DARIEN EXPEDITION. 

England. But the Spaniards in the new world 
treated them with uniform kindness, while the 
English governments showed them none ; and one 
of their ships was seized and detained. In fact, 
only Captain Campbell s ship and another small 
one were saved. The Rising Sun was lost on 
the bar of Charlestown ; and of the colony, 
not more than thirty, saved from war, ship 
wreck, or disease, ever returned to their native 
country. (^OTE 8.) 

Paterson, who had withstood the blow, could not 
endure the reflection of misfortune. He was seized 
with a lunacy in his passage home, after the ruin 
of the first colony ; but he recovered in his own 
country, where his spirit, still ardent and unbroken, 
presented a new plan to the company, founded on 
the idea of King William, that England should 
have the joint dominion of the settlement with 
Scotland. He survived many years in Scotland, 
pitied, respected, but neglected. After the union 
of the two kingdoms, he claimed reparation of 
his losses from the equivalent money obtained by 
England to the Darien Company, but was paid 
nothing; because a grant to him from a public 
fund would have been only an act of humanity, 
and not a political job. Thus ended the colony of 
Darien ; an adveature which, in its disastrous 



THE DABIEN EXPEDITION. 251 

* 

results, inflicted a severe blow upon Scotland, and 
excited feelings of deep hostility toward the 
English government and nation, which half a 
century was scarcely sufficient to extinguish. 



NOTES TO DAKIEN EXPEDITION. 

(1.) THE time and expense of navigation to 
China, Japan, the Spice Islands, and the far great 
est part of the East Indies, will be lessened more 
than half, and the consumption of European com 
modities and manufactures will soon be more than 
doubled. Trade will increase trade, and money 
will beget money, and the trading world shall need 
no more to want work for their hands, but will 
rather want hands for their work. Thus, this door 
of the seas, and the key of the universe, with any 
thing of a reasonable management, will, of course, 
enable its proprietors to give laws to both oceans and 
to become arbitrators of the commercial world, with 
out being liable to the fatigues, expenses, and dan 
gers, or contracting the guilt and blood of Alexander 
and Caesar. In all our empires, tfcat have been 
anything universal, the conquerors have been 
obliged to seek out and court their conquests from 
afar ; but the universal force an d influence of this 
attractive magnet is such, as can much more effect- 



NOTES. 253 

ually bring empire home to its proprietors doors. 
But, from what hath been said, you may easily 
perceive that the nature of these discoveries is such 
as not to be engrossed by any one nation or people, 
with exclusion to others; nor can it be thus 
attempted without evident hazard and ruin, as we 
see in the case of Spain and Portugal, who, by their 
prohibiting any other people to trade, or so much 
as go to or dwell in the Indies, have not only lost 
that trade they were not able to maintain, but have 
depopulated and ruined their countries therewith ; 
so that the Indies have rather conquered Spain and 
Portugal than they have conquered the Indies ; for, 
by their permitting all to go out, and none to come 
in. they have not only lost the people which are 
gone to these remote and luxuriant regions, but 
such as remain are become wholly unprofitable and 
good for nothing. Thus, not unlike the case of the 
dog in the fable, they have lost their own coun 
tries, and yet not gotten the Indies. People and 
their industry are the true riches of a prince or 
nation ; and in respect to them, all other things are 
imaginary. This was well understood by the 
people of Home, who, contrary to the maxims of 
Sparta and Spain, by general naturalizations, 
liberty of conscience, and immunity of government, 
far more effectually and advantageously conquerea 



254 DARIEN EXPEDITION. 

and kept the world than ever they did, or possibly 
could have done, by the sword. DALRYMPLE S 
Extracts from Patersorfs own Papers. 

ENTHUSIASM OF THE SCOTCH. 

BJ 

(2.) That extraordinary projector (Paterson) had 
transported the ordinary cool and calculating Scots 
almost out of their senses. From high to low, all 
his countrymen were visited by day-dreams of 
sudden and enormous wealth, by visions of gold, 
and of nothing but gold. The new company, 
which included some of the noblest and most 
intellectual of the Scottish nation, had caused six 
stout ships to be built in Holland, and many of the 
aristocracy had embarked their younger sons, con 
fident that they were putting them on the sure road 
to wealth and distinction. Several lords denuded 
their estates to send out their vassals and tenantry ; 
and many officers who had been disbanded by the 
late peace had ventured their persons and their 
little property. Pict. Hist, of Eng., vol. iv. p. 95. 

DIFFICULTIES AT THE START. 

(3.) The clamor in Scotland increased against the 
ministry, who had disowned their company, and in 
a great measure defeated their design, from which 



NOTES. 255 

they had promised themselves such heaps of trea 
sure At Madeira they took in a supply 

of wine, and then returned to Crab Island, in the 
neighborhood of St. Thomas, lying between Santa 
Cruz and Porto Eico. Their design was to take 
possession of this little island; but when they 
entered the road, they saw a large tent pitched 
upon the strand, and the Danish colors flying. 
Finding themselves anticipated in this quarter, 
they directed their course to the coast of Darien. . . . 
SMOLLETT. 

OPPOSITION OF THE ENGLISH. 

(4.) They represented that, in consequence of the 
exemption from taxes, and other advantages granted 
to the Scottish company, that kingdom would 
become a free port for all East and "West India 
commodities; that the Scots would be enabled to 
supply all Europe at a cheaper rate than the Eng 
lish could afford to sell their merchandise for ; 
therefdre, England would lose the benefit of its 
foreign trade ; besides, they observed that the Scots 
would smuggle their commodities into England, to 
the great detriment of his majesty and his customs. 
Hid. 

(5.) But there was another cause more powerful 



256 DARIEN EXPEDITION. 

than the remonstrances of the Spanish court, to 
which this colony fell a sacrifice ; and that was, the 
jealousy of the English traders and planters. . . . 
The English apprehended that their planters would 
be allured into this new colony by the double 
prospect of finding gold and plundering the Span 
iards, and that the settlement would produce a 
rupture with Spain; in consequence of which, the 
English effects in that kingdom would be confis 
cated. Ibid. 

OPPOSITION OF THE DUTCH. 

(6.) The Dutch, too, are said to have been 
jealous of the company, which, in time, might 
have proved their competitors in the illicit com 
merce to the Spanish main, and to have hardened 
the king s heart against the new settlers. Tbid. 

(7.) It was further given out, to raise the national 
disgust yet higher, that the opposition the king 
gave to the Scotch colony flowed neither from a 
regard to the interests of England, nor to the 
treaties with Spain, but from a care of the Dutch, 
who, from Curaeoa, drove a coasting trade among 
the Spanish plantations with great advantage ; 
which, they said, the Scotch colony, if once settled, 
would draw only away from them. BUKNET. 



NOTES. 257 



DISASTROUS RESULT. 

(8.) Thus vanished all the golden dreams of the 
Scottish nation, which had engaged in this design 
with incredible eagerness, and even embarked a 
greater sum of money than ever they had advanced 
upon any other occasion. They were now not only 
disappointed in their expectations of wealth and 
affluence, but a great number of families were 
absolutely ruined by the miscarriage of the design, 
which they imputed solely to the conduct of King 
William. The whole kingdom of Scotland seemed 
to join in the clamor that was raised against their 
sovereign, taxed him with double-dealing, inhu 
manity, and base ingratitude, to a people who had 
lavished their treasure and best blood in support 
of his government and in the gratification of his 
ambition ; and had their power been equal to their 
animosity, in all probability a rebellion would have 
ensued. SMOLLETT. 



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. 



259 



THE SOUTH SEA BUBBLE. 

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 in 
terest of six per cent. To provide for this interest, 
amounting to 600,000 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 in 
corporated by act of parliament, assumed the title 
by which it has ever since been known. The minis 
ter 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." 

261 



THE SOUTH SEA BUBBLE. 

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. Everybody 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 con 
cede four ports on the coasts of Chili and Peru for 
the purposes of traffic, increased the general confi 
dence, and for many years the South Sea Com 
pany s stock was in high favor. 

Philip Y. of Spain, however, never had any in 
tention 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 latfer 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, 



THE SOUTH SEA BUBBLE. 263 

who were reminded much oftener than they found 
agreeable, of the 

"Parturiunt montes, nascitur ridiculus mus." 

But the public confidence in the South Sea Com 
pany 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 harbors of these coasts were pom 
pously set forth as open to the trade of Great Bri 
tain. 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 pub 
lic 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 pro 
posals 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 advan 
tageous. The House debated for some time, and 



264: THE SOUTH SEA BUBBLE. 

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 Com 
pany were accepted, and that body held itself 
ready to advance the sum of two millions toward 
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 inte 
rest for the sum of 1,775,027 15s. due to it by 
the state, and agreed to deliver up to be cancelled 
as many exchequer bills as amounted to .two mil 
lions 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 
2,500,000 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 



THE SOUTH SEA BUBBLE. 265 

was in high request, and the directors, buoyed up 
with success, began to think of new means for ex 
tending 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 con 
ceit, they imagined they could avoid his faults, 
carry on their schemes forever, and stretch the cord 
of credit to its extremest tension, without causing 
it to snap asunder. 

It was while Law s plan was at its greatest height 
of popularity, while people were crowding in thou 
sands to the rue Quincampoix, and ruining them 
selves with frantic eagerness, that the South Sea 
directors laid before parliament their famous plan 
for paying off the national debt. Visions of bound 
less wealth floated before the fascinated eyes of the 
people in the- two most celebrated countries of 
Europe. The English commenced their career of 
extravagance somewhat later than the French; but 
as soon as the delirium seized them they were de 
termined not to be outdone. Upon the 22d of Jan 
uary, 1720, the House of Commons resolved itself 
* into a committee of the whole House, to take into 

consideration that part of the king s speech at the 

12 



266 THE SOUTH SEA BUBBLE. 

opening of the session which related to the public 
debts, and the proposal of the South Sea Company 
toward the redemption and sinking of the same. 
The proposal set forth at great length, and under 
several heads, the debts of the state, amounting to 
30,981,712, which the company were anxious to 
take upon themselves, upon consideration of five 
per cent, per annum, secured to them until Mid 
summer, 1727 ; after which time, the whole .was to 
become redeemable at the pleasure of the legisla 
ture, and the interest to be reduced to four per 
cent. The proposal was received with great favor ; 
but the Bank of England had many friends in the 
House of Commons, who were desirous that that 
body should share in the advantages that were 
likely to accrue. On behalf of this corporation it 
was represented, that they had performed great 
and eminent services to the state in the most diffi 
cult times, and deserved, at least, that if any ad 
vantage was to be made by public bargains of this 
nature, they should be preferred before a company 
that had never done anything for the nation. The 
further consideration of the matter was accordingly 
postponed for five days. In the meantime a plan 
was drawn up by the governors of the bank. The 
South Sea Company, afraid that the bank might 
offer still more advantageous terms to the govern 



THE SOUTH SEA BUBBLE. 267 

ment than themselves, reconsidered their former 
proposal, and made some alterations in it, which 
they hoped would render it more acceptable. The 
principal change was a stipulation that the govern 
ment might redeem these debts at the expiration of 
four years, instead of seven, as at first suggested. 
The bank resolved not to be outbidden in this sin 
gular auction, and the governors also reconsidered 
their first proposal, and sent in a new one. 

Thus, each corporation having made two pro 
posals, the House began to deliberate. Mr. Eobert 
Walpole was the chief speaker in favor of the 
bank, and Mr. Aislabie, the Chancellor of the Ex 
chequer, the principal advocate on behalf of the 
South Sea Company. It was resolved, on the 2d 
of February, that the proposals of the latter were 
most advantageous to the country. They were 
accordingly received, and leave was given to bring 
in a bill to that effect. 

Exchange Alley was in a fever of excitement. 
The company s stock, which had been at a hundred 
and thirty the previous day, gradually rose to three 
hundred, and continued to rise with the most aston 
ishing rapidity during the whole time that the bill 
in its several stages was under discussion. Mr. 
Walpole was almost the only statesman in the 
House who spoke out boldly against it. He warned 



\ 

s 
x 



THE SOUTH SEA BUBBLE. 

them, in eloquent and solemn language, of the evils 
that would ensue. It countenanced, he said, " the 
dangerous practice of stock-jobbing, and would 
divert the genius of the nation from trade and 
industry-. It would hold out a dangerous lure to 
decoy the unwary to their ruin, by making them 
part with the earnings of their labor for a prospect 
of imaginary wealth. The great principle of the 
project was an evil of first-rate magnitude; it was 
to raise artificially the value of the stock, by excit 
ing and keeping up a general infatuation, and by 
promising dividends out of funds which could never 
be adequate to the purpose." In a prophetic spirit 
he added, that if the plan succeeded, the directors 
would become masters of the government, form a 
new and absolute aristocracy in the kingdom, and 
control the resolutions of the legislature. If it 
failed, which he was convinced it would, the result 
would bring general discontent and ruin upon the 
country. Such would be the delusion, that when 
the evil day came, as come it would, the people 
would start up, as from a dream, and ask them 
selves if these things could have been true. All 
his eloquence was in vain. He was looked upon as 
a false prophet, or compared to the hoarse raven-, 
croaking omens of evil. His friends, however, 
compared him to Cassandra, predicting evils which 



THE SOUTH SEA BUBBLE. 269 

would only be believed when they came home to 
men s hearths, and stared them in the face at their 
own boards. Although, in former times, the House 
had listened with the utmost attention to every 
word that fell from his lips, the benches became 
deserted when it was known that he would speak 
on the South Sea question. 

The bill was ^;wo months in .its progress through 
the House of Commons. During this time every 
exertion was made by the directors and their friends, 
and more especially by the chairman, the noted 
Sir John Blunt, to raise the price of the stock. 
The most extravagant rumors were in circulation. 
Treaties between England and Spain were spoken 
of, whereby the latter was to grant a free trade to 
all her colonies ; and the rich produce of the mines 
of Potosi-la-Paz was to be brought to England until 
silver should become almost as plentiful as iron. 
For cotton and woollen goods, which could be sup 
plied to them in abundance, the dwellers in Mexico 
were to empty their golden mines. The company 
of merchants trading to the South Seas would be 
the richest the world ever saw, and every hundred 
pounds invested in it would produce hundreds per 
annum to the stockholder. At last the stock was 
raised by these means to near four hundred ; but, 
after fluctuating a good deal, settled at three hun- 



270 THE SOUTH SEA BUBBLE. 

dred and thirty, at which price it remained when 
thq bill passed the Commons by a majority of 172 
against 55. (ISToTE 1.) 

In the House of Lords the bill was hurried 
through all its stages with unexampled rapidity. 
On the 4th of April it was read a first time ; on 
the 5th, it was read a second time ; on the 6th, it 
was committed ; and on the 7th, was read a third 
time and passed. 

Several peers spoke warmly against the scheme ; 
but their warnings fell upon dull, cold ears. A 
speculating frenzy had seized them as well as the 
plebeians. Lord North and Grey said the bill was 
unjust in its nature, and might prove fatal in its 
consequences, being calculated to enrich the few 
and impoverish the many. The Duke of "Wharton 
followed ; but, as he only retailed at second-hand 
the arguments so eloquently stated by Walpole in 
the Lower House, he was not listened to with even 
ihe same attention that had been bestowed upon 
Lord North and Grey. Earl Cowper followed on 
the same side, and compared the bill to the famous 
horse of the siege of Troy. Like that, it was 
ushered in and received with great pomp and accla- 
mations of joy, but bore within it treachery and 
destruction. The Earl of Sunderland endeavored 
to answer all objections ; and on the question being 



THE SOUTH SEA BUBBLE. 271 

put, there appeared only seventeen peers against, 
and eighty-three in favor of the project. The very 
same day on which it passed the Lords, it received 
the royal assent, and became the law of the land. 

It seemed at that time as if the whole nation had 
turned stock-jobbers. Exchange Alley was every 
day blocked up by crowds, and Cornhill was impass 
able for the number of carriages. Everybody 
came to purchase stock. " Every fool aspired to be 
a knave." In the words of a ballad published at 
the time, and sung about the streets,* 

" Then stars and garters did appear 

Among the meaner rabble ; 
To buy and sell, to see and hear 
The Jews and Gentiles squabble. 

"The greatest ladies thither came, 

And plied in chariots daily, 
Or pawned their jewels for a sum 
To venture in the Alley." 

The inordinate thirst of gain that had afflicted 
all ranks of society was not to be slaked even in 
the South Sea. Other schemes, of the most extra 
vagant kind, were started. The share-lists were 
speedily filled up, and an enormous traffic carried 

=* A South-Sea Ballad ; or, Merry Remarks upon Exchange- Alley 
Bubbles. To a new tune called " The Grand Elixir ; or, the Philo 
sopher s Stone discovered." 



272 , THE SOUTH SEA BUBBLE. 

on in shares, while, of course, every means were 
resorted to to raise them to an artificial value in 
the market. 

r Contrary to all expectation, South Sea stock fell 
when the bill received the royal assent. On the 
7th of April the shares were quoted at three hun 
dred and ten, and on the following day at two hun 
dred and ninety. Already the directors had tasted 
the profits of their scheme, and it was not likely 
that ttrey should quietly allow the stock to find its 
natural level without an effort to raise it. Imme 
diately their busy emissaries were set to work. 
Every person interested in the success of the pro 
ject endeavored to draw a knot of listeners around 
him, to whom he expatiated on the treasures of the 
South American seas. Exchange Alley was crowd 
ed with attentive groups. One rumor alone, 
asserted with the utmost confidence, had an imme 
diate effect upon the stock. It was said that Earl 
Stanhope had received overtures in France from the 
Spanish government to exchange Gibraltar and 
Port Mahon for some places on the coast of Peru, 
for the security and enlargement of the trade in the 
South Seas. Instead of one annual ship trading to 
those ports, and allowing the king of Spain twenty- 
five per cent, out of the profits, the company might 
build and charter as many ships as they pleased, 



THE SOUTH SEA BUBBLE. 273 

and pay no percentage whatever to any foreign 
potentate, 

" Visions of ingots danced before their eyes," 

and stock rose rapidly. On the 12th of April, five 
days after the bill had become law, the directors 
opened their books for a subscription of a million, 
at the rate of 300 for every 100 capital. Such 
was the concourse of persons of all ranks, that this 
first subscription was found to amount to above two 
millions of original stock. It was to be paid in five 
payments, of 60 each for every 100. In a few 
days the stock advanced to three hundred and forty, 
and the subscriptions were sold for double the price 
of the first payment. To raise the stock still higher, 
it was declared, in a general court of directors, on 
the 21st of April, that the midsummer dividend 
should be ten per cent., and that all subscriptions 
should be entitled to the same. These resolutions 
answering the end designed, the directors, to im 
prove the infatuation of the moneyed men, opened 
their books for a second subscription of a million, 
at four hundred per cent. Such was the frantic 
eagerness of people of every class to speculate in 
these funds, that in the course of a few hours no 
less than a million and a half was subscribed at 
that rate. (NOTES 7, 8.) 

12* 



274: THE SOUTH SEA BUBBLE. 

In the meantime, innumerable joint-stock com 
panies started up everywhere. They soon received 
the name of Bubbles, the most appropriate that 
imagination could devise. The populace are often 
most happy in the nicknames they employ. None 
could be more apt than that of Bubbles. Some of 
them lasted for a week or a fortnight, and were no 
more heard of, while others could not even live out 
that short span ^of existence. Every evening pro 
duced new ^chemes, and every morning new pro 
jects. The highest of the aristocracy were as eager 
in this hot pursuit of gain as the most plodding job 
ber in Cornhill. The Prince of Wales became 
governor of one company, and is said to have 
cleared 40,000, by his speculations.* The Duke 
of Bridgewater started a scheme for the improve 
ment of London and Westminster, and the Duke of 
Chandos another. There were nearly a hundred 
different projects, each more extravagant and 
deceptive than the other. To use the words of the 
" Political State," they were " set on foot and pro 
moted by crafty knaves, then pursued by multi 
tudes of covetous fools, and at last appeared to be, 
in effect, what their vulgar appellation denoted them 
to be bubbles and mere cheats." It was com- 

* Coxe s "Walpole," Correspondence between Mr. Secretary 
Craggs and Earl Stanhope. (NOTE 5.) 



THE SOUTH SEA BUBBLE. 275 

puted that near one million and a half sterling was 
won and lost by these unwarrantable practices, to 
the impoverishment of many a fool, and the enrich 
ing of many a rogue. 

Some of these schemes were plausible enough, 
and, had they been undertaken at a time when the 
public mind was unexcited, might have been pur 
sued with advantage to all concerned. But they 
were established merely with a view of raising the 
shares in the market. The projectors took the first 
opportunity of a rise to sell out, and next morning 
the scheme was at an end. Maitland, in his " His 
tory of London," gravely informs us, that one of 
the projects which received great encouragement, 
was for the establishment of a company " to make 
deal boards out of saw-dust." This is no doubt in 
tended as a joke ; but there is abundance of evidence 
to show that dozens of schemes, hardly a whit more 
reasonable, lived their little day, ruining hundreds 
ere they fell. One of them was for a wheel for per 
petual motion capital one million ; another was 
" for encouraging the breed of horses in England, and 
improving of glebe and church lands, and repairing 
and rebuilding parsonage and vicarage houses." 
Why the clergy, who were so mainly interested in 
the latter clause, should have taken so much in 
terest in the first, is only to be explained on the 



276 



THE SOUTH SEA BUBBLE. 



supposition that the scheme was projected by a 
knot of the fox-hunting parsons, once so common 
in England. The shares of this company were 
rapidly subscribed for. But_thejmost ajbsurd and 
preposterous of all, and which showed, more com 
pletely than any other, the utter madness of the 
people, was one started by an unknown adventurer, 
entitled, " A company for carrying on an under 
taking of great advantage^ ~but nobody to know what 
it is." Were not the fact stated by scores of credi 
ble witnesses, it would be impossible to believe that 
any person could have been duped by such a pro 
ject. The man of genius who essayed this bold 
and successful inroad upon public credulity, merely 
stated in his prospectus that the required capital 
was half a million, in five thousand shares of 100 
each, deposit 2 per share. Each subscriber, pay 
ing his deposit, would be entitled to 100 per annum 
per share. How this immense profit was to be 
obtained, he did not condescend to inform them at 
that time, but promised that in a month full parti 
culars should be duly announced, and a call made 
for the remaining 98 of the subscription. Next 
morning, at nine o clock, this great man opened an 
office in Cornhill. Crowds of people beset his door, 
and when he shut up, at three o clock, he found 
that no less than one thousand shares had been sub- 



THE SOUTH SEA BUBBLE. 277 

scribed for, and the deposits paid. He was thus, 
in five hours, the winner of 2,000. He was philoso 
pher enough to be contented with his venture, and 
set off the same evening for the Continent. He 
was never heard of again. 

Well might Swift exclaim, comparing Change 
Alley to a gulf in the South Sea : 

" Subscribers here by thousands float, 

And jostle one another down, 
Each paddling in his leaky boat, 
And here they fish for gold and drown. 

"Now buried in the depths below, 

Now mounted up to heaven again, 
They reel and stagger to and fro, 

At their wits end, like drunken men. 

" Meantime, secure on Garraway cliffs, 

A savage race, by shipwrecks fed, 

Lie waiting for the foundered skiffs, 

And strip the bodies of the dead." 

Another fraud that was very successful was that 
of the "Globe Permits" as they were called. 
They were nothing more than square pieces of play 
ing-cards, on which was the impression of a seal, 
in wax, bearing the sign of the Globe Tavern, in 
the neighborhood of Exchange Alley, with the in 
scription of " Sail-Cloth Permits." The possessors 

8* 



278 THE SOUTH SEA BUBBLE. 

enjoyed no other advantage from them than per 
mission to subscribe at some future time to a new 
sail-cloth manufactory, projected by one who was 
then known to be a man of fortune, but who was 
afterward involved in the peculation and punish 
ment of the South Sea directors. These permits 
sold for as much as sixty guineas in the Alley. 

Persons of distinction, of both sexes, were deeply 
engaged in all these bubbles ; those of the male sex 
going to taverns and coffee-houses to meet their 
brokers, and the ladies resorting for the same pur 
pose to the shops of milliners and haberdashers. 
But it did not follow that all these people believed 
in the feasibility of the schemes to which they sub 
scribed ; it was enough for their purpose that their 
shares would, by stock-jobbing arts, be soon raised 
to a premium, when they got rid of them with all 
expedition to the really credulous. So great was 
the confusion of the crowd in the Alley, that shares 
in the same bubble were known to have been sold 
at the same instant ten per cent, higher at one end 
of the alley than at the other. Sensible men be 
held the extraordinary infatuation of the people 
with sorrow and alarm. There were some both in 
and out of parliament who foresaw clearly the ruin 
that was impending. Mr. Walpole did not cease 
his gloomy forebodings. His fears were shared by 



THE SOUTH SEA BUBBLE. 279 

all the thinking few, and impressed most forcibly 
upon the government. On the llth of June, the 
day the parliament rose, the king published a 
proclamation, declaring that all these unlawful pro 
jects should be deemed public nuisances, and .prose 
cuted accordingly, and forbidding any broker, 
under a penalty of five hundred pounds, from buy 
ing or selling any shares in them. Notwithstanding 
this proclamation, roguish speculators still carried 
them on, and the deluded people still encouraged 
them. On the 12th of July, an order of the Lords 
Justices assembled in privy council was published, 
dismissing all the petitions that had been presented 
for patents and charters, and dissolving all the bub 
ble companies. The following copy of their lord 
ships order, containing a list of all these nefarious 
projects, will not be deemed uninteresting at the 
present time, when, at periodic intervals, there is 
but too much tendency in the public mind to in 
dulge in similar practices : 

" At the Council Chamber, Whitehall, the 12th day 
of July, 1T20. Present, their Excellencies the 
Lords Justices in Council. 

" Their Excellencies the Lords Justices, in coun 
cil; taking into consideration the many inconve- 



280 THE SOUTH SEA BUBBLE. 

niences arising to the public from several projects 
set on foot for raising of joint-stock for various 
purposes, and that a great many of his majesty s 
subjects have been drawn in to part with their 
money on pretence of assurances that their 
petitions for patents and charters to enable them to 
carry on the same would be granted : to prevent 
such impositions, their excellencies this day ordered 
the said several petitions, together with such reports 
from the Board of Trade, and from his majesty s 
attorney and solicitor-general, as had been obtained 
thereon, to be laid before them ; and after mature 
consideration thereof, were pleased, by advice of 
his majesty s privy council, to order that the said 
petitions be dismissed, which are as follow : 

" 1. Petition of several persons, praying letters 
patent for carrying on a fishing trade by the name 
of the Grand Fishery of Great Britain. 

" 2. Petition of the Company of the Royal 
Fishery of England, praying letters patent for such 
further powers as will effectually contribute to carry 
on the said fishery. 

" 3. Petition of George James, on behalf of 
himself and divers persons of distinction concerned 
in a national fishery, praying letters patent of in 
corporation, to enable them to carry on the same. 

"4. Petition of several merchants, traders, and 



THE SOUTH SEA BUBBLE. 281 

others, wliose names are thereunto subscribed, 
praying to be incorporated for reviving and carry 
ing on a whale fishery to Greenland and elsewhere. 

" 5. Petition of Sir John Lambert and others 
thereto subscribing, on behalf of themselves and a 
great number of merchants, praying to be incorpo 
rated for carrying on a Greenland trade, and par 
ticularly a whale fishery in Davis s Straits. 

" 6. Another petition for a Greenland trade. 

" 7. Petition of several merchants, gentlemen, 
and citizens, praying to be incorporated for buying 
and building of ships to let or freight. 

" 8. Petition of Samuel Antrim and others, pray 
ing for letters patent for sowing hemp and flax. 

"9. Petition of several merchants, masters of 
ships, sail-makers, and manufacturers of sail-cloth, 
praying a charter of incorporation, to enable them 
to carry on and promote the said manufactory by a 
joint-stock. 

" 10. Petition of Thomas Boyd and several hun 
dred merchants, owners and masters of ships, sail- 
makers, weavers, and other traders, praying a 
charter of incorporation, empowering them to 
borrow money for purchasing lands, in order to the 
manufacturing sail-cloth and fine holland. 

" 11. Petition on behalf of several persons in 
terested in a patent granted by the late King Wil- 



282 THE SOUTH SEA BUBBLE. 

Ham and Queen Mary for the making of linen and 
sail-cloth, praying that no charter may be granted 
to any persons whatsoever for making sail-cloth 
but that the privilege now enjoyed by them may 
be confirmed, and likewise an additional power 
to carry on the cotton and cotton-silk manufac 
tures. 

" 12. Petition of several citizens, merchants and 
traders in London, and others, subscribers to a 
British stock for a general insurance from fire in 
any part of England, praying to be incorporated 
for carrying on the said undertaking. 

" 13. Petition of several of his majesty s loyal 
subjects of the city of London and other parts of 
Great Britain, praying to be incorporated for carry 
ing on a general insurance from losses by fire within 
the kingdom of England. 

" 14. Petition of Thomas Burges and others his 
majesty s subjects thereto subscribing, in behalf of 
themselves and others, subscribers to a fund of 
1,200,000 for carrying on a trade to his majesty s 
German dominions, praying to be incorporated by 
the name of the Harburg Company. 

" 15. Petition of Edward Jones, a dealer in tim 
ber, on behalf of himself and others, praying to be 
incorporated for the importation of timber from 
Germany. 



THE SOUTH SEA BUBBLE. 283 

"16. Petition of several merchants of London, 
praying a charter of incorporation for carrying on 
a salt-work. 

" 1Y. Petition of Captain Macphedris, of London, 
merchant, on behalf of himself and several mer 
chants, clothiers, hatters, dyers and other traders, 
praying a charter of incorporation empowering them 
to raise a sufficient sum of money to purchase lands 
for planting and rearing a wood called madder, for 
the use of dyers. 

"18. Petition of Joseph Galendo, of London, 
snuff-maker, praying a patent for his invention to 
prepare and cure Virginia tobacco for snuff in 
Virginia, and making it into the same in all his 
majesty s dominions." 

LIST OF BUBBLES. 

The following Bubble-Companies were by the 
same order declared to be illegal, and abolished 
accordingly : 

1. For the importation of Swedish iron. 

2. For supplying London with sea-coal. Capital, 
three millions. 

3. For building and rebuilding houses through 
out all England. Capital, three millions. 

4. For making of muslin. 



284 THE SOUTH SEA BUBBLE. 

5. For carrying on and improving the British 
alum-works. 

6. For effectually settling the island of Blanco 
and Sal Tartagus. 

7. For supplying the town of Deal with fresh 
water. 

8. For the importation of Flanders lace. 

9. For improvement of lands in Great Britain. 
Capital, four millions. 

10. For encouraging the breed of horses in Eng 
land, and improving of glebe and church lands, and 
for repairing and rebuilding parsonage and vicar 
age houses. 

11. For making of iron and steel in Great Britain. 

12. For improving the land in the county of 
Flint. Capital, one million. 

13. For purchasing lands to build on. Capital, 
two millions. 

14. For trading in hair. 

15. For erecting salt-works in Holy Island. Capi 
tal, two millions. 

16. For buying and selling estates, and lending 
money on mortgage. 

IT. For carrying on an undertaking of great 
advantage, but nobody to know what it is. 

18. For paving the streets of London. Capital, 
two millions. 



THE SOUTH 8EA BUBBLE. 285 

19. For furnishing funerals to any part of Great 
Britain. 

20. For buying and selling lands and lending 
money at interest. Capital five millions. 

21. For carrying on the royal fishery of Great 
Britain. Capital ten millions. 

22. For assuring of seamen s wages. 

23. For erecting loan offices for the assistance 
and encouragement of the industrious. Capital, 
two millions. 

24. For purchasing and improving leasable lands. 
Capital, four millions. 

25. For importing pitch and tar, and other naval 
stores, from North Britain and America. 

26. For the clothing, felt and pantile trade. 

27". For purchasing and improving a manor and 
royalty in Essex. 

28. For insuring of horses. Capital, two mil 
lions. 

29. For exporting the woollen manufacture, and 
importing copper, brass, and iron. Capital, four 
millions. 

30. For a grand dispensary. Capital, three mil 
lions. 

31. For erecting mills and purchasing lead-mines. 
Capital, two millions. 

32. For improving the art of making soap. 



THE SOUTH SEA BUBBLE. 

33. For a settlement on the island of Santa Cruz. 

34. For sinking pits and smelting lead ore in 
Derbyshire. 

35. For making glass bottles and other glass. 

36. For a wheel for perpetual motion. Capital, 
one million. 

37. For improving of gardens. 

38. For insuring and increasing children s for 
tunes. 

39. For entering and loading goods at the Cus 
tom-house, and for negotiating business for mer 
chants. 

T 

40. For carrying on a woollen manufacture in 
the north of England. 

41. For importing walnut-trees from Virginia. 
Capital, two millions. 

42. For making Manchester stuffs of thread and 
cotton. 

43. For making Joppa and Castile soap. 

44. For improving the wrought-iron and steel 
manufactures of this kingdom. Capital, four mil 
lions. 

45. For dealing in lace, hollands, cambrics, 
lawns, etc. Capital, two millions. 

46. For trading in and improving certain com 
modities of the produce of this kingdom, etc. 
Capital, three millions. 



THE SOUTH SEA BUBBLE. 287 

47. For supplying the London markets with 
cattle. 

48. For making looking-glasses, coach-glasses, 
etc. Capital, two millions. 

49. For working the tin and lead mines in Corn 
wall and Derbyshire. 

50. For making rape-oil. 

51. For importing beaver fur. .Capital, two mil 
lions. 

52. For making pasteboard and packing-paper. 

53. For importing of oils and other materials 
used in the woollen manufacture. 

54. For improving and increasing the silk manu 
factures. 

55. For lending money on stock, annuities, tal 
lies, etc. 

56. For paying pensions to widows and others, 
at a small discount. Capital, two millions. 

57. For improving malt liquors. Capital, four 
millions. 

58. For a grand American fishery. 

59. For purchasing and improving the fenny 
lands in Lincolnshire. Capital, two millions. 

60. For improving the paper manufacture of 
Great Britain. 

61. The Bottomry Company. 

62. For drying malt by hot air. 



288 THE SOUTH SEA BUBBLE. 

63. For carrying on a trade in the river Oro 
nooko. 

64. For the more effectual making of baize, in 
Colchester and other parts of Great Britain. 

65. For buying of naval stores, supplying the 
victualling, and paying the -wages of the workmen. 

66. For employing poor artificers, and furnishing 
merchants and others with watches. 

67. For improvement of tillage and the breed of 
cattle. 

68. Another for the improvement of our breed 
in horses. 

69. Another for a horse-insurance. 

70. For carrying on the corn trade of Great 
Britain. 

71. For insuring to all masters and mistresses the 
losses they may sustain by servants. Capital, three 
millions. 

72. For erecting houses or hospitals for taking in 
and maintaining illegitimate children. Capital, 
two millions. 

73. For bleaching coarse sugars, without the use 
of fire or loss of substance. 

74. For building turnpikes and wharfs in Great 
Britain. 

75. For insuring from thefts and robberies. 

76. For extracting silver from lead. 



THE SOUTH SEA BUBBLE. 

77. For making china and delf ware. Capital, 
one million. 

78. For importing tobacco, and exporting it 
again to Sweden and the north of Europe. Capi 
tal, four millions. 

79. For making iron with pit coal. 

80. For furnishing the cities of London and 
Westminster with hay and straw. Capital, three 
millions. 

81. For a sail and packing-cloth manufactory in 
Ireland. 

82. For taking tip ballast. 

83. For buying and fitting out ships to suppress 
pirates. 

84. For the importation of timber from "Wales. 
Capital, two millions. 

85. For rock-salt. 

86. For the transmutation of quicksilver into a 
malleable fine metal. 

Besides these bubbles, many others sprang up 
daily, in spite of the condemnation of the govern 
ment and the ridicule of the still sane portion of 
the public. The print-shops teemed with carica 
tures, and the newspapers with epigrams and 
satires, upon the prevalent folly. An ingenious 
cardmaker published a pack of South-Sea playing- 
cards, which are now extremely rare, each card 

13 



290 THE SOUTH SEA BUBBLE. 

containing, besides the usual figures of a very small 
size, in one corner, a caricature of a bubble com 
pany, with appropriate verses underneath. One of 
the most famous bubbles was " Puckle s Machine 
Company," for discharging round and square can 
non-balls and bullets, and making a total revolution 
in the art of war. Its pretensions to public favor 
were thus summed up on the eight of spades : 

" A rare invention to destroy the crowd 
Of fools at home instead of fools abroad. 
Fear not, my friends, this terrible machine, 
They re only wounded who have shares therein." 

The nine of hearts was a caricature of the 
English Copper and Brass Company, with the 
folio wing epigram : 

" The headlong fool that wants to be a swopper 
Of gold and silver coin for English copper, 
May, in Change Alley, prove himself an ass, 
And give rich metal for adultrate brass." 

ue eight of diamonds celebrated the company 
i jr the colonization of Acadia, with this doggerel : 

" lie that is rich, and wants to fool away 
A good round sum in North America, 
Let him subscribe himself a headlong sharer, 
And asses ears shall honor him or bearer." 

And in a similar style every card of the pack 



THE SOUTH SEA BUBBLE. 291 

exposed some knavish scheme, and ridiculed the 
persons who were its dupes. It was computed that 
the total amount of the sums proposed for carrying 
on these projects was upwards of three hundred 
millions sterling. 

It is time, however, to return to the great South 
Sea gulf, that swallowed the fortunes of so many 
thousands of the avaricious and the credulous. On 
the 29th of May, the stock had risen as high as five 
hundred, and about two-thirds of the government 
annuitants had exchanged the securities of the 
state for those of the South Sea Company. During 
the whole of the month of May the stock continued 
to rise, and on the 28th it was quoted at five hun 
dred and fifty. In four days after this it took a 
prodigious leap, rising suddenly from five hundred 
.and fifty to eight hundred and ninety. It was now 
the general opinion that the stock could rise no 
higher, and many persons took that opportunity of 
selling out, with a view of realizing their profits. 
Many noblemen and persons in the train of the 
king, and about to accompany him to Hanover, 
were also anxious to sell out. So many sellers, and 
so few buyers, appeared in the Alley on the 3d of 
June, that the stock fell at once from eight hundred 
and ninety to six hundred and forty. The directors 
were alarmed, and gave their agents orders to buy. 



292 THE SOUTH SEA BUBBLE. 

Their efforts succeeded. Toward evening, confi 
dence was restored, and the stock advanced to 
seven hundred and fifty. It continued at this 
price, with some slight fluctuation, until the com 
pany closed their books on the 22d of June. 

It would be needless and uninteresting to detail 
the various arts employed by the directors to keep 
up the price of stock. It will be sufficient to state 
that it finally rose to one thousand per cent. It 
was quoted at this price in the commencement of 
August. The bubble was then full-blown, and 
began to quiver and shake preparatory to its 
bursting. (NOTE 2.) 

Many of the government annuitants expressed 
dissatisfaction against the directors. They accused 
them of partiality in making out the lists for shares 
in each subscription. Further uneasiness was occa 
sioned by its being generally known that Sir John 
Blunt, the chairman, and some others, had s6ld out. 
During the whole of the month of August the 
stock fell, and on the 2d of September it was quoted 
at seven hundred only. 

The state of things now became alarming. .To 
prevent, if possible, the utter extinction of public 
confidence in their proceedings, the directors sum , 
moned a general court of the whole corporation, to 
meet in Merchant Tailors Hall on the 8th of Sep - 



THE. SOUTH SEA BUBBLE. 293 

tember. "By nine o clock in the morning, the room 
was filled to suffocation ; Cheapside was blocked 
up by a crowd unable to gain admittance, and 
the greatest excitement prevailed. The direc 
tors and their friends mustered in great numbers. 
Sir John Fellowes, the sub-governor, was called to 
the chair. He acquainted the assembly with the 
cause of their meeting; read to them the several 
resolutions of the court of directors, and gave them 
an account of their proceedings ; of the taking in 
the redeemable and unredeemable funds, and of 
the subscriptions in money. Mr. Secretary Craggs 
then made a short speech, wherein he commended 
the conduct of the directors, and urged that nothing 
could more effectually contribute to the bringing 
this scheme to perfection than union among them 
selves. He concluded with a motion for thanking 
the court of directors for their prudent and skillful 
management, and for desiring them to proceed in 
such manner as they should think most proper for 
the interest and advantage of the corporation. Mr. 
Hungerford, who had rendered himself very con 
spicuous in the House of Commons for his zeal in 
behalf of the South Sea Company, and who was 
shrewdly suspected to have been a considerable 
gainer by knowing the right time to sell out, was 
very magniloquent on this occasion. He said thai 



294: THE SOUTH SEA BUBBLE. 

he had seen the rise and fall, the decay and resur 
rection of many communities of this nature, but 
that, in his opinion, none had ever performed such 
wonderful things in so short a time as the South Sea 
Company. They had done more than the crown, the 
pulpit, or the bench could do. They had reconciled 
all parties in one common interest ; they had laid 
asleep, if not wholly extinguished, all the domestic 
jars and animosities of the nation. By the rise of 
their stock, moneyed men had vastly increased 
their fortunes; country gentlemen had seen the 
value of their lands doubled and trebled in their 
hands. They had at the same time done good to 
the church, not a few of the reverend clergy having 
got great sums by the project. In short, they had 
enriched the whole nation, and he hoped they had 
not forgotten themselves. There was some hissing 
at the latter part of this speech, which, for the 
extravagance of its eulogy, was not far removed 
from satire ; but the directors and their friends, and 
all the winners in the room, applauded vehemently. 
The Duke of Portland spoke in a similar strain, and 
expressed his great wonder why anybody should be 
dissatisfied ; of course, he was a winner by his 
speculations, and in a condition similar to that of 
the fat alderman in Joe Miller s Jests, who, when 
ever he had eaten a good dinner, folded his hands 



THE SOUTH SEA BUBBLE. 295 

upon his paunch, and expressed his doubts whether 
there could be a hungry man in the world. 

Several resolutions were passed at this meeting, 
but they had no effect upon the public. Upon the 
very same evening the stock fell to six hundred and 
forty, and on the morrow to five hundred and forty. 
Day after day it continued to fall, until it was as 
low as four hundred. In a letter, dated September 
13th, from Mr. Broderick, M.P., to Lord Chancellor 
Middleton, and published in Coxe s " Walpole," the 
former says: " Various are the conjectures why the 
South Sea directors have suffered the cloud to 
break so early. I made no doubt but they would 
do so when they found it to their advantage. They 
have stretched credit so far beyond what it would 
bear, that specie proves insufficient to support it. 
Their most considerable men have drawn out, 
securing themselves by the losses of the deluded, 
thoughtless numbers, whose understandings have 
been overruled by avarice and the hope of mak 
ing mountains out of mole-hills. Thousands 
of families will be reduced to beggary. The 
consternation is inexpressible the rage beyond 
description, and the case altogether so desperate, 
that I do not see any plan or scheme so much as 
thought of for averting the blow ; so that I cannot 
pretend to guess what is next to be done." Ten 







THE SOUTH SEA BUBBLE. 



days afterward, the stock still falling, he writes: 
" The company have yet come to no determination, 
for they are in such a wood that they know not 
which way to turn. By several gentlemen lately 
come to town, I perceive the very name of a 
South Sea-man grows abominable in every country. 
A great many goldsmiths are already run off, and 
more will, daily. I question whether one-third, nay, 
one-fourth of them can stand it. From the very 
beginning, I founded my judgment of the whole 
affair upon the unquestionable maxim, that ten 
millions (which is more than our running cash) 
could not circulate two hundred millions beyond 
which our paper credit extended. That, therefore, 
whenever that should become doubtful, be the cause 
what it would, our noble state-machine must inevit 
ably fall to the ground." 

On the 12th of September, at the earnest solicita 
tion of Mr. Secretary Craggs, several conferences 
were held between the directors of the South Sea 
and the directors of the Bank. A report which 
was circulated, that the latter had agreed to 
culate six millions of the South Sea Compan 
bonds, caused the stock to rise to six hundred and 




seventy; but in the afternoon, as soon a 
report was known to be groundless, the stoJlfell 
again to five, hundred and eighty ; the* nexl^fer to 



THE SOUTH SEA BUBBLE. 297 

five hundred and seventy, and so gradually to 
four hundred.* 

The ministry were seriously alarmed at the as 
pect of affairs. The directors could not appear in 
the streets without being insulted ; dangerous riots 
were every moment apprehended. Dispatches were 
sent off to the king at Hanover, praying his imme 
diate return. Mr. Walpole, who was staying at his 
country seat, was sent for, that he might employ 
his known influence with the directors of the Bank 
of England to induce them to .accept the proposal 
made by the South Sea Company for circulating a 
number of their bonds. 

The Bank was very unwilling to mix itself up 
with the affairs of the company ; it dreaded being 
involved in calamities which it could not relieve, 
and received all overtures with visible reluctance. 
But the universal voice of the nation called upon it 

* Gay (the poet), in that disastrous year, had a present from 
young Craggs of some South Sea stock, and once supposed himself 
to be master of twenty thousand pounds. His friends persuaded 
him to sell his share, but he dreamed of dignity and splendor, and 
could not bear to obstruct his own fortune. He was then impor 
tuned to sell as much as would purchase a hundred a year for life, 
" which," says Fenton, " will make you sure of a clean shirt and a 
shoulder of mutton every day." This counsel was rejected ; the 
profit and principal were lost, and Gay sunk under the calamity so 
low that his life became in danger. Johnson s Lives of the Poets. 

13* 



THE SOUTH SEA BUBBLE. 

to come to the rescue. Every person of note in 
commercial politics was called in to advise in the 
emergency. A rough draft of a contract drawn up 
by Mr. Walpole was ultimately adopted as the 
basis of further negotiations, and the public alarm 
abated a little. 

On the following day, the 20th of September, a 
general court of the South Sea Company was held 
at Merchant Tailors Hall, in which resolutions were 
carried, empowering the directors to agree with the 
Bank of England, or any other persons, to circulate 
the company s bonds, or make any other agreement 
with the Bank which they should think proper. 
One of the speakers, a Mr. Pulteney, said it was 
most surprising to see the extraordinary panic which 
had seized upon the people. Men were running 
to and fro in alarm and terror, their imaginations 
filled with some great calamity, the form and 
dimensions of which nobody knew : 

" Black it stood as night- 
Fierce as ten furies terrible as hell." 

At a general court of the Bank of England, held 
two days afterward, the governor informed them 
of the several meetings that had been held on the 
affairs of the South Sea Company, adding that the 
directors had not yet thought fit to come to any 



THE SOUTH SEA BUBBLE. 299 

decision upon the matter. A resolution was then 
proposed, and carried without a dissentient voice, 
empowering the directors to agree with those of 
the South Sea to circulate their bonds, to what sum, 
and upon what terms, and for what time, they 
might think proper. 

Thus both parties were at liberty to act as they 
might judge best for the public interest. Books 
were opened at the Bank for subscription of three 
millions for the support of public credit, on the 
usual terms of 15 per cent, deposit, 3 per cent, 
premium, and 5 per cent, interest. So great was 
the concourse of people in the early part of the 
morning, all eagerly bringing their money, that it 
was thought the subscription would be filled that 
day ; but before noon the tide turned. In spite of 
all that could be done to prevent it, the South Sea 
company s stock fell rapidly. Their bonds were in 
such discredit, that a run commenced upon the 
most eminent goldsmiths and bankers, some of 
whom, having lent out great sums upon South Sea 
stock, were obliged to shut up their shops and 
abscond. The Sword-blade company, who had 
hitherto been the chief cashers of the South Sea 
Company, stopped payment. This being looked 
upon as but the beginning of evil, occasioned a 
great run upon the Bank, who were now obliged to 



300 THE SOUTH SEA BUBBLE. 

pay out money much faster than they had received 
it upon the subscription in the morning. The day 
succeeding was a holiday (the 29th of September), 
and the Bank had a little breathing time. They 
bore up against the storm ; but their former rivals, 
the South Sea Company, were wrecked upon it. 
Their stock fell to one hundred and fifty, and gra 
dually, after various fluctuations, to one hundred 
and thirty-five. 

The Bank, finding they were not able to restore 
public confidence, and stem the tide of ruin, with 
out running the risk of being swept away with 
those they intended to save, declined to carry out 
the agreement into which they had partially entered. 
They were under no obligation whatever to con 
tinue ; for the so-called Bank contract was nothing 
more than the rough draft of an agreement, in 
which blanks had been left for several important 
particulars, and which contained no penalty for 
their secession, "^nd thns T " to nsp> the words of 
Jhe Parliamentary History, "were seen, in the 
space of eight months, the* rise, progress, and fall 
of that mighty fabric, which being wound up by 
mysterious springs to a wonderful height had fixed 
the eyes and expectations of all Europe, but 
whose foundation, being fraud, illusion, credu 
lity, and infatuation, fell to the ground as soon 



THE SOUTH SEA BUBBLE. 301 

as the artful management of its directors was dis 
covered." 

In the hey-day of its blood, during the progress 
of this dangerous delusion, the manners of the 
nation became sensibly corrupted. The parliamen 
tary inquiry, set on foot to discover the delinquents, 
disclosed scenes of infamy, disgraceful alike to the 
morals of the offenders and the intellects of the 
people among whom they had arisen. It is a deeply 
interesting study to investigate all the evils that 
were the result. Nations, like individuals, cannot 
become desperate gamblers with impunity. Pun 
ishment is sure to overtake them sooner or later. A 
celebrated writer* is quite wrong when he says " that 
such an era as this is the most unfavorable for a 
historian ; that no reader of sentiment and imagina 
tion can be entertained or interested by a detail of 
transactions such as these, which admit of no 
warmth, no coloring, no embellishment; a detail of 
which only serves to exhibit an inanimate picture 
of tasteless vice and mean degeneracy." On the 
contrary and Smollett might have discovered it, 
if lie had been in the -humor the subject is capa 
ble of inspiring as much interest as even a novelisl 
can desire. Is there no warmth in the despair of a 

* Smollett. 



302 THE SOUTH SEA BUBBLE. 

plundered people? no life and animation in the 
picture which might be drawn of the woes of hun 
dreds of impoverished and ruined families ? of the 
wealthy of yesterday become the beggars of to-day ? 
of the powerful and influential changed into exiles 
and outcasts, and the voice of self-reproach and 
imprecation resounding from every corner of the 
land ? Is it a dull or uninstructive picture to see a 
whole people shaking suddenly off the trammels of 
reason, and running wild after . a golden vision, 
refusing obstinately to believe that it is not real, 
till, like a deluded hind running after an ignis fa- 
tuus, they are plunged into a quagmire ? But in 
this false spirit has history too often been written. 
The intrigues of unworthy courtiers to gain the 
favor of still more unworthy kings, or the records 
of murderous battles and sieges, have been dilated 
on, and told over and over again, with all the elo 
quence of style and all the charms of fancy ; while 
the circumstances which have most deeply affected 
the morals and welfare of the people have been 
passed over with but slight notice, as dry and dull, 
and capable of neither warmth nor coloring. 

During the progress of this famous bubble, Eng 
land presented a singular spectacle. The public 
mind was in a state of unwholesome fermentation. 
Men were no longer satisfied with the slow but sure 



THE SOUTH SEA BUBBLE. 303 

profits of cautious industry. The hope of bound 
less wealth for the morrow made them heedless and 
extravagant for to-day. A luxury, till then unheard 
of, was introduced, bringing in its train a correspon 
ding laxity of morals. The overbearing insolence 
of ignorant men, who had arisen to sudden wealth 
by successful gambling, made men of true gentility 
of mind and manners blush that gold should have 
power to raise the unworthy in the scale of society. 
The haughtiness of some of these " cyphering cits," 
as they were termed by Sir Richard Steele, was 
remembered against them in the day of their adver 
sity. In the parliamentary inquiry, many of the 
directors suffered more for their insolence than for 
their peculation. One of them, who, in the full 
blown pride of an ignorant rich man, had said that lie 
would feed his horse upon gold, was reduced almost 
to bread and water for himself; every haughty 
look, every overbearing speech, was set down, and 
repaid them a hundred fold in poverty and humilia 
tion. (NOTES 3, 4.) 

The state of matters all over the country was so 
alarming, that George I. shortened his intended 
stay in Hanover, and returned in all haste to Eng 
land. He arrived on the llth of November, and 
parliament was summoned to meet on the 8th of 
December. In the meantime, public meetings were 



304 THE SOUTH SEA BUBBLE. 

held in every considerable town of the empire, at 
which petitions were adopted, praying the ven 
geance of the legislature upon the South Sea direc 
tors, who, by their fraudulent practices, had brought 

the nation to the brink of "N^fwl y poH to 

imagine that the nation itself was as culpable as the 
South Sea Company. Nobody blamed the credu 
lity and avarice of the people the degrading lust 
of gain, which had swallowed up every nobler 
quality in the national character, or the infatuation 
which had made the multitude run their heads 
with such frantic eagerness into the net held out for 
them by scheming projectors. These things were 
never mentioned. The people were a simple, 
honest, hard-working people, ruined by a gang of 
robbers, who were to be hanged, drawn, and quar 
tered without mercy. 

This was the almost unanimous feeling of the 
country. The two houses of parliament were not 
more reasonable. Before the guilt of the South 
Sea directors was known, punishment was the only 
cry. The king, in his speech from the throne, ex 
pressed his hope that they would remember that all 
their prudence, temper, and resolution, were neces 
sary to find out and apply the proper remedy for 
their misfortunes. In the debate on the answer to 
the address, several speakers indulged in the most 



THE SOUTH SEA BUBBLE. 305 

violent invective* against the directors of the South 
Sea project. The Lord Molesworth was particu 
larly vehement : 

" It had been said by some, that there was no law 
to punish the directors of the South Sea Company, 
who were justly looked upon as the authors of the 
present misfortunes of the state. In his opinion, 
they ought upon this occasion to follow the example 
of the ancient Romans, who, having no law against 
parricide, because their legislators supposed no son 
could be so unnaturally wicked as to imbrue his 
hands in his father s blood, made a law to punish 
this heinous crime as soon as it was , committed. 
They adjudged the guilty wretch to be sewn in a 
sack, and thrown alive into the Tiber. He looked 
upon the contrivers and executors of the villainous 
South Sea scheme as the parricides of their coun 
try, and should be satisfied to see them tied in like 
manner in sacks, and thrown into the Thames." 
Other members spoke with as much want of temper 
and discretion. Mr. "Walpole was more moderate. 
He recommended that their first care should be to 
restore public credit. " If the city of London were 
on fire, all wise men would aid in extinguishing 
the flames, and preventing the spread of the con 
flagration, before they inquired after the incen 
diaries. Public credit had received a dangerous 



306 



THE SOUTH SEA BUBBLE. 



wound, and lay bleeding, and they ought to apply 
a speedy remedy to it. It was time enough to 
punish the assassin afterward." On the 9th of 
December, an address, in answer to his majesty s 
speech, was agreed upon, after an amendment, 
which was carried without a division, that words 
should be added expressive of the determination of 
the House not only to seek a remedy for the 
national distresses, but to punish the authors of 
them. 

The inquiry proceeded rapidly. The directors 
were ordered to lay before the House a full account 
of all their proceedings. Resolutions were passed 
to the effect that the calamity was mainly owing to 
the vile arts of stock-jobbers, and that nothing 
could tend more to the reestablishment of public 
credit than a law to prevent this infamous practice. 
Mr. "Walpole then rose, and said, that " as he had 
previously hinted, he had spent some time upon a 
scheme for restoring public credit, but that the 
execution of it depending upon a position which 
had been laid down as fundamental, he thought it 
proper, before he opened out his scheme, to be in 
formed whether he might rely upon that foundation. 
It was, whether the subscription of public debts 
and encumbrances, money subscriptions, and other 
contracts, made with the South Sea Company, 



THE SOUTH SEA BUBBLE. 307 

should remain in the present state ?" This question 
occasioned an animated debate. It was finally 
agreed, by a majority of 259 against 117, that all 
these contracts should remain in their present state, 
unless altered for the relief of the proprietors by a 
general court of the South Sea Company, or set 
aside by due course of law. On the following day, 
Mr. Walpole laid before a committee of the whole 
House his scheme for the restoration of public 
credit, which was, in substance, to engraft nine 
millions of South Sea stock into the Bank of Eng 
land, and the same sum into the East India Com 
pany upon certain conditions. The plan was 
favorably received by the House. After some few 
objections, it was ordered that proposals should be 
received from the two great corporations. They 
were both unwilling to lend their aid, and the plan 
met with a warm but fruitless opposition at the 
general courts summoned for the purpose of delibe 
rating upon it. They, however, ultimately agreed 
upon the terms on which they would consent to 
circulate the South Sea bonds, and their report 
being presented to the committee, a bill was 
brought in under the superintendence of Mr. Wal 
pole, and safely carried through both Houses of 
Parliament. 

A bill was at the same time brought in for 



308 THE SOUTH SEA BUBBLE. 

restraining the South Sea directors, governor, sub 
governor, treasurer, cashier, and clerks from leaving 
the kingdom for a twelvemonth, and for discover 
ing their estates and effects, and preventing them 
from transporting or alienating the same. All the 
most influential members of the House supported 
the bill. Mr. Shippen, seeing Mr. Secretary Craggs 
in his place, and believing the injurious rumors 
that were afloat of that minister s conduct in the 
South Sea business, determined to touch him to the 
quick. He said he was glad to see a British House 
of Commons resuming its pristine vigor and spirit, 
and acting with so much unanimity for the public 
good. It was necessary to secure the persons and 
estates of the South Sea directors and their officers ; 
" but," he added, looking fixedly at Mr. Craggs as 
he spoke, " there were other men in high station, 
whom, in time, he would not be afraid to name, 
who were no less guilty than the directors." Mr. 
Craggs arose in great wrath, and said, that if the 
innuendo were directed against him, he was ready 
to give satisfaction to any man who questioned him, 
either in the House or out of it. Loud cries of 
order immediately arose on every side. In the 
midst of the uproar, Lord Molesworth got up, and 
expressed his wonder at the boldness of Mr. Craggs 
in challenging the whole House of Commons. He, 



THE SOUTH SEA BUBBLE. 309 

Lord Molesworth, though somewhat old, past sixty, 
would answer Mr. Craggs whatever he had to say 
in the House, and he trusted there were plenty of 
young men beside him, who would not be afraid to 
look Mr. Craggs in the face out of the House. The 
cries of order again resounded from every side ; the 
members arose simultaneously ; everybody seemed 
to be vociferating at once. The Speaker in vain 
called order. The confusion lasted several minutes, 
during which Lord Molesworth and Mr. Craggs 
were almost the only members who kept their seats. 
At last, the call for Mr. Craggs became so violent, 
that he thought proper to submit to the universal 
feeling of the House, and explain his unparliamen 
tary expression. He said, that by giving satisfac 
tion to the impugners of his conduct in that House, 
he did not mean that he would fight, but that he 
would explain his conduct. Here the matter ended, 
and the House proceeded to debate in what man 
ner they should conduct their inquiry into the 
affairs of the South Sea Company, whether in a 
grand or a select committee. Ultimately, a secret 
committee of thirteen was appointed, with power 
to send for persons, papers, and records. 

The Lords were as zealous and as hasty as the 
Commons. The Bishop of Rochester said the 
scheme had been like a pestilence. The Duke of 



310 THE SOUTH SEA BUBBLE. 

Wharton said the House ought to show no respect 
of persons ; that, for his part, he would give up the 
dearest friend he had, if he had been engaged in 
the project. The nation had been plundered in a 
most shameful and flagrant manner, and he would 
go as far as anybody in the punishment of the 
offenders. Lord Stanhope said, that every farthing 
possessed by the criminals, whether directors or not 
directors, ought to be confiscated, to make good the 
public losses. 

During all this time the public excitement was 
extreme. We learn from Cox s " Walpole," that the 
very name of a South Sea director was thought to 
be synonymous with every species of fraud and vil 
lainy. Petitions from counties, cities, and boroughs, 
in all parts of the kingdom, were presented, crying 
for the justice due to an injured nation and the 
punishment of the villainous peculators. Those 
moderate men, who would not go to extreme 
lengths, even in the punishment of the guilty, 
were accused of being accomplices, were exposed 
to repeated insults and virulent invectives, and 
devoted, both in anonymous letters and public 
writings, to the speedy vengeance of an injured 
people. The accusations against Mr. Aislabie, 
ChaiiC^lor of the Exchequer, and Mr. Craggs 
another member of the ministry, were so loud, that 



THE SOUTH SEA BUBBLE. 311 

> 

the House of Lords resolved to proceed at once into 
the investigation concerning them. It was ordered, 
on the 21st of January, that all brokers concerned 
in the South Sea scheme should lay before the 
House an account of the stock or subscriptions 
bought or sold by them for any of the officers of 
the Treasury or Exchequer, or in trust for any of 
them, since Michaelmas, 1719. When this account 
was delivered, it appeared that large quantities of 
stock had been transferred to the use of Mr. Ais- 
labie. Five of the South Sea directors, including 
Mr. Edward Gibbon, the grandfather of the cele 
brated historian, were ordered into the custody of 
the black rod. Upon a motion made by Earl Stan 
hope, it was unanimously resolved, that the taking 
in or giving credit for stock without a valuable con 
sideration actually paid or sufficiently secured, or 
the purchasing stock by any director or agent of 
the South Sea Company for the use or benefit of 
any member of the administration, or any member 
of either house of Parliament, during such time as 
the South Sea bill was yet pending in Parliament, 
was a notorious and dangerous corruption. Another 
resolution was passed a few days afterward, to the 
effect that several of the directors and officers of 
the company having, in a clandestine manner, 
sold their own stock to the company, had been 



312 THE SOUTH SEA BUBBLE. 

guilty of a notorious fraud and breach of trust, and 
had thereby mainly caused the unhappy turn of 
affairs that had so much affected public credit. 
Mr. Aislabie resigned his office as Chancellor of 
the Exchequer, and absented himself from parlia 
ment, until the formal inquiry into his individual 
guilt was brought under the consideration of the 
legislature. 

In the meantime, Knight, the treasurer of the 
company, and who was intrusted with all the dan 
gerous secrets of the dishonest directors, packed 
up his books and documents and made his escape 
from the country. He embarked in disguise, in a 
small boat on the river, and proceeding to a vessel 
hired for the purpose, was safely conveyed to 
Calais. The Committee of Secrecy informed the 
House of the circumstance, when it was resolved 
unanimously that two addresses should be presented 
to the king ; the first praying that he would issue 
a proclamation offering a reward for the apprehen 
sion of Knight ; and the second, that he would give 
immediate orders to stop the ports, and to take 
effectual care of the coasts, to prevent the said 
Knight, or any other officers of the South Sea Com 
pany, from escaping out of the kingdom. The ink 
was hardly dry upon these addresses before they 
were carried to the king by Mr. Methuen, deputed 



THE SOUTH SEA BUBBLE. 313 

by the House for that purpose. The same evening 
a royal proclamation was issued, offering a reward 
of two thousand pounds for the apprehension of 
Knight. The Commons ordered the doors of the 
house to be locked and the keys to be placed on 
the table. General Ross, one of the members of 
the Committee of Secrecy, acquainted them that 
they had already discovered a train of the deepest 
villainy and fraud that hell had ever contrived to 
ruin a nation, which in due time they would lay 
before the House. In the meantime, in order to a 
further discovery, the committee thought it highly 
necessary to secure the persons of some of the direc 
tors and principal South Sea officers, and to seize 
their papers. A motion to this effect having been 
made was carried unanimously. Sir Robert Chap 
lin, Sir Theodore Janssen, Mr. Sawbridge, and Mr. 
F. Eyles, members of the House, and directors of 
the South Sea Company, were summoned to appear 
in their places, and answer for their corrupt prac 
tices. Sir Theodore Janssen and Mr. Sawbridge 
answered to their names, and endeavored to excul 
pate themselves. The House heard them patiently, 
and then ordered them to withdraw. A motion 
was then made, and carried nemine contwacbicente, 
that they had been guilty of a notorious breach of 
trust had occasioned much loss to great numbers 

14 



314 THE SOUTH SEA BUBBLE. 

of his majesty s subjects, and had highly prejudiced 
the public credit. It was then ordered that for 
their offence they should be expelled the House 
and taken into the custody of the sergeant-at-arms. 
Sir Robert Chaplin and Mr. Eyles, attending in 
their places four days afterward, were also expelled 
the House. It was resolved at the same time to 
address the king to give directions to his ministers 
at foreign courts to make application for Knight, 
that he might be delivered up to the English au 
thorities, in case he took refuge in any of their 
dominions. The king at once agreed, and messen 
gers were dispatched to all parts of the continent 
the same night. 

Among the directors taken into custody was Sir 
John Blunt, the man whom popular opinion has 
generally ;iccusu<l of having bt-eii the original au 
thor and father of the scheme. This man, we are 
informed by Pope, in his epistle to Allen Lord 
Bathurst, was a Dissenter, of a most religious de 
portment, and professed to be a great believer.* 

* " God cannot love, says Blunt, with tearless eyes, 

* The wretch he starves, and piously denies 

Much-injur d Blunt! why bears he Britain s hate? 

A wizard told him in these words our fate : 

* At length corruption, like a general flood, 
So long by watchful ministers withstood, 



THE SOUTH SEA BUBBLE. 315 

He constantly declaimed against the luxury and 
corruption of the age, the partiality of parliaments, 
and the misery of party-spirit. He was particularly 
eloquent against avarice in great and noble persons. 
He was originally a scrivener, and afterward be 
came not only a director, but the most active mana 
ger of the South Sea Company. "Whether it was 
during his career in this capacity that he first began 
to declaim against the avarice of the great, we are 
not informed. He certainly must have seen enough 
of it to justify his severest anathema; but if the 
preacher had himself been free from the vice he 
condemned, his declamations would have had a 
better effect. He was brought up in custody to 

Shall deluge all ; and avarice, creeping on, 

Spread like a low born mist, and blot the sun ; 

Statesman and patriot ply alike the stocks, 

Peeress and butler share alike the box, 

And judges job, and bishops bite the town, 

And mighty dukes pack cauds for half-a-crown : 

See Britain sunk in Lucre s sordid charms, 

And France revenged on Anne s and Edward s arms ! 

Twas no court-badge, great Scrivener! fir d thy brain, 

Nor lordly luxury, nor city gain : 

No, twas thy righteous end, asham d to see 

Senates degen rate, patriots disagree, 

And nobly wishing party-rage to cease, 

To buy both sides, and give thy country peace." 

Pope s Epistle to Allen Lord Bathurst. 



316 THE SOUTH SEA BUBBLE. 

the bar of the House of Lords, and underwent a 
long examination. He refused to answer several 
important questions. He said he had been ex 
amined already by a committee of the House of 
Commons, and as he did not remember his answers 
and might contradict himself, he refused to answer 
before another tribunal. This declaration, in itself 
an indirect proof of guilt, occasioned some commo 
tion in the House. He was again asked peremp 
torily whether he had ever sold any portion of the 
stock to any member of the administration, or any 
member of either house of parliament, to facilitate 
the passing of the bill. He again declined to an 
swer. He was anxious, he said, to treat the House 
with all possible respect, but he thought it hard to 
be compelled to accuse, himself. After several in 
effectual attempts to refresh his memory, he was 
directed to withdraw. A violent discussion ensued 
between the friends and opponents of the ministry. 
It was asserted that the administration were no 
strangers to the convenient taciturnity of Sir John 
Blunt. The Duke of Wharton made a reflection 
upon the EarJ Stanhope, which the latter warmly 
resented. He spoke under great excitement, and 
with such vehemence as to cause a sudden determi 
nation of blood to the head. He felt himself so ill 
that he was obliged to leave the House and retire to 



THE SOUTH SEA BUBBLE. 317 

/ 

his chamber. He was cupped immediately, and 
also let blood on the following morning, but with 
slight relief. The fatal result was not anticipated. 
; Toward evening he became drowsy, and turning 
himself on his face, expired. The sudden death of 
this statesman caused great grief to the nation. 
George I. was exceedingly affected, and shut him 
self up for some hours in his closet, inconsolable for 
his loss. (JSToTE 6.) 

Knight, the treasurer of the company, was ap 
prehended at Tirlemont, near Liege, by one of the 
secretaries of Mr. Leathes, the British resident at 
Brussels, and lodged in the citadel of Antwerp. 
Repeated applications were made to the court of 
Austria to deliver him up, but in vain. Knight 
threw himself upon the protection of the states of 
Brabant, and demanded to be tried in that country. 
It was a privilege granted to the states of Brabant 
by one of the articles of the Joyeuse Entree, that 
every criminal apprehended in that country should 
be tried in that country. The states insisted on 
their privilege, and refused to deliver Knight to 
the British authorities. The latter did not cease 
their solicitations ; but in the meantime Knight es 
caped from the citadel. 

On the 16th of February, the Committee of Se 
crecy made their first report to the House. They 



318 THE SOUTH SEA BUBBLE. 

stated that their inquiry had been attended with 
numerous difficulties and embarrassments; every 
one they had examined had endeavored, as far as 
in him lay, to defeat the ends of justice. In some 
of the books produced before them, false and ficti 
tious entries had been made ; in others, there were 
entries of money with blanks for the name of the 
stockholders. There were frequent erasures and 
alterations, and in some of the books, leaves were 
torn out. They also found that some books of great 
importance had been destroyed altogether, and that 
some had been taken away or secreted. At the 
very entrance into their inquiry, they had observed 
that the matters referred to them were of great 
variety and extent. Many persons had been 
intrusted with various parts in the execution of the 
law, and under color thereof, had acted in an un 
warrantable manner, in disposing of the properties 
of many thousands of persons, amounting to many 
millions of money. They discovered that, before 
the South Sea Act was passed, there was an entry 
in the company s books of the sum of 1,259,325, 
upon account of stock stated to have been sold to 
the amount of 574,500. This stock was all fic 
titious, and had been disposed of with a view to 
promote the passing of the bill. It was noted as 
sold on various days, and at various prices, from 



THE SOUTH SEA BUBBLE. 319 

150 to 325 per cent. Being surprised to see so 
large an account disposed of at a time when the 
company were not empowered to increase their 
capital, the committee determined to investigate 
most carefully the whole transaction. The gov 
ernor, sub-governor, and several -directors were 
brought before them, and examined rigidly. They 
found that, at the time these entries were made, the 
company was not in possession of such a quantity 
of stock, having in their own right only a small 
quantity, not exceeding thirty thousand pounds at 
the utmost. Pursuing the inquiry, they found that 
this amount of stock was to be esteemed as taken in 
or holden by the company for the benefit of the 
pretended purchasers, although no mutual agree 
ment was made for its delivery or acceptance at 
any certain time. No money was paid down, nor 
any deposit or security whatever given to the com 
pany by the supposed purchasers ; so that if the 
stock had fallen, as might have been expected had 
the act not passed, they would have sustained no 
loss. If, on the contrary, the price of stock ad 
vanced (as it actually did, by the success of the 
scheme), the difference by the advanced price was 
to be made good to them. Accordingly, after the 
passing of the act, the account of stock was made 
up and adjusted with Mr. Knight, and the pre- 



THE SOUTH SEA BUBBLE. 

tended purchasers were paid the difference out of 
the company s cash. This fictitious stock, which 
had been chiefly at the disposal of Sir John Blunt, 
Mr. Gibbon, and Mr. Knight, was distributed 
among several members of the government and 
their connections, by way of bribe, to facilitate the 
passing of the bill. To the Earl of Sunderland was 
assigned 50,000 of this stock ; to the Duchess of 
Kendal, 10,000; to the Countess 6f Platen, 
$10,000 ; to her two nieces, 10,000 ; to Mr. Secre 
tary Craggs, 30,000; to Mr. Charles Stanhope 
(one of the secretaries of the Treasury), 10,000 ; to 
the Sword-blade company, 50,000. It also ap 
peared that Mr. Stanhope had received the enor 
mous sum of 250,000 as the difference in the price 
of some stock, through the hands of Turner, Cas- 
wall and Co., but that his name had been partly 
erased from their books, and altered to Stangape. 
Aislabie, the Chancellor of the Exchequer, had 
made profits still more abominable. He had an 
account with the same firm, who were also South 
Sea directors, to the amount of 794,451. He had, 
besides, advised the company to make their second 
subscription one million and a half, instead of a 
million, by their own authority, and without any 
warrant. The third subscription had been con 
ducted in a manner as disgraceful. Mr. Aislabie s 



THE SOUTH SEA BUBBLE. 321 

name was down for 70,000 ; Mr. Craggs, senior, 
for 659,000 ; the Earl of Sunderland s for 160,000 ; 
and Mr. Stanhope for 47,000. This report was 
succeeded by six others, less important. At the 
end of the last, the committee declared that the 
absence of Knight, who had been principally in 
trusted, prevented them from carrying on their 
inquiries. 

The first report was ordered to be printed, and 
taken into consideration on the next day but one, 
succeeding. After a very angry and animated 
debate, a series of resolutions were agreed to, con 
demnatory of the conduct of the directors, of the 
members of parliament, and of the administration 
concerned with them ; and declaring that they 
ought, each and all, to make satisfaction out of their 
own estates for the injury they had done the public. 
Their practices were declared to be corrupt, in 
famous, and dangerous ; and a bill was ordered to 
,be brought in for the relief of the unhappy suf 
ferers. 

Mr. Charles Stanhope was the first person 
brought to account for his share in these trans 
actions. He urged in his defence that, for some 
years past, he had lodged all the money he was 
possessed of in Mr. Knight s hands, and whatever 
stock Mr. Knight had taken in for him, he had paid 

U* 



322 THE SOUTH SEA BUBBLE. 

a valuable consideration for it. As for the stock 
that had been bought for him by Turner, Caswall, 
and Co., he knew nothing about it. "Whatever 
had been done in that matter was done without his 
authority, and he could not be responsible for it. 
Turner and Co. took the latter charge upon them 
selves ; but it was notorious to every unbiased and 
unprincipled person that Mr. Stanhope was a gainer 
of the 250,000 which lay in the hands of that firm 
to his credit. He was, however, acquitted by a 
majority of three only. The greatest exertions were 
made to screen him. Lord Stanhope, the son of the 
Earl of Chesterfield, went round to the wavering 
members, using all the eloquence he was possessed of 
to induce them either to vote for the acquittal, or to 
absent themselves from the House. Many weak- 
headed, country gentlemen were led astray by his 
persuasions, and the result was as already stated. 
The acquittal caused the greatest discontent through 
out the country. Mobs of a menacing character 
assembled in different parts of London; fears of 
riots were generally entertained, especially as the 
examination of a still greater delinquent was ex 
pected by many to have a similar termination. 
Mr. Aislabie, whose high office and deep respon 
sibilities should have kept him honest, even had 
native principle been insufficient, was very justly 



THE SOUTH SEA BUBBLE. 323 

regarded as, perhaps, the greatest criminal of all. 
His case was entered into on the day succeeding 
the acquittal of Mr. Stanhope. Great excitement 
prevailed, and the lobbies and avenues of the 
House were beset by crowds impatient to know the 
result. The debate lasted the whole day. Mr. 
Aislabie found few Mends : his guilt was so appa 
rent and so heinous, that nobody had courage to 
stand up in his favor. It was finally resolved, 
without a dissentient voice, that Mr. Aislabie had 
encouraged and promoted the destructive execution 
of the South Sea scheme, with a view to his own 
exorbitant profit, and had combined with the 
directors in their pernicious practices, to the ruin 
of the public trade and credit of the kingdom : that 
he should, for his offences, be ignominiously ex 
pelled from the House of Commons, and committed 
a close prisoner to the Tower of London ; that he 
should be restrained from going out of the kingdom 
for a whole year, or till the end of the next session 
of parliament ; and that he should make out a cor 
rect account of all his estate, in order that it might 
be applied to the relief of those who had suffered 
by his mal-practices. 

This verdict caused the greatest joy. Though it 
was delivered at half-past twelve at night, it soon 
spread over the city. Several persons illuminated 



324 THE SOUTH SEA BtTBBLE." 

their houses in token of their joy. On the follow 
ing day, when Mr. Aislabie was conveyed to the 
Tower, the mob assembled on Tower Hill with the 
intention of hooting and pelting him. Not suc 
ceeding in this, they kindled a large bonfire, and 
danced around it in the exuberance of their delight. 
Several bonfires were made in other places ; Lon 
don presented the appearance of a holiday, and 
people congratulated one another as if they had 
just escaped from some great calamity. The rage 
upon the acquittal of Mr. Stanhope had grown to 
such a height, that none could tell where it would 
have ended had Mr. Aislabie met with the like in 
dulgence. 

To increase the public satisfaction, Sir George 
Caswall, of the firm of Turner, Caswall & Co., was 
expelled from the House on the following day, com 
mitted to the Tower, and ordered to refund the sum 
of 250,000. 

That part of the report of the Committee of Se 
crecy which related to the Earl of Sunderland was 
next taken into consideration. Every effort waa 
made to clear his lordship from the imputation. 
As the case against him rested chiefly on the evi 
dence extorted from Sir John Blunt, great pains 
were taken to make it appear that Sir John s word 
was not to be believed, especially in a matter 



THE SOUTH SEA BUBBLE. 325 

affecting the honor of a peer and privy councillor. 
All the friends of the ministry rallied around the 
earl, it being generally reported that a verdict of 
guilty against him would bring a Tory ministry into 
power. He was eventually acquitted by a majority 
of 233 against 172 ; but the country was convinced 
of his guilt. The greatest indignation was every 
where expressed, and menacing mobs again assem 
bled in London. Happily, no disturbance took place. 
This was the day on which Mr. Craggs the elder 
expired. The morrow had been appointed for the 
consideration of his case. It was very generally 
believed that he had poisoned himself. It appeared, 
however, that grief for the loss of his son, one of 
the secretaries of the Treasury, who had died five 
weeks previously of the smallpox, preyed much on 
his mind. For this son, dearly beloved, he had 
been amassing vast heaps of riches : he had been 
getting money, but not honestly ; and he for whose 
sake he had bartered his honor and sullied his fame 
was now no more. The dread of further exposure 
increased his trouble of mind, and ultimately 
brought on an apoplectic fit, in which he expr/tred. 
He left a fortune of a million and a half, which was 
afterward confiscated for the benefit of the sufferers 
by the unhappy delusion he had been so mainly 
instrumental in raising. 






326 THE SOUTH SEA BUBBLE. 

One by one the case of every director of the 
company was taken into consideration, A sum 
amounting to two millions and fourteen thousand 
pounds was confiscated from their estates towards 
repairing the mischief they had done, each man 
being allowed a certain residue in proportion to his 
conduct and circumstances, ^ with which he might 
begin the world anew. Sir John Blunt was only 
allowed 5,000 out of his fortune of upward of 
183,000 ; Sir John Fellows was allowed 10,000 
out of 243,000 ; Sir Theodore Janssen, 50,000 out 
of 243,000 ; Mr. Edward Gibbon, 10,000 out of 
106,000 ; Sir John Lambert, 5,000 out of 72, 
000. Others, less deeply involved, were treated 
with greater liberality. Gibbon, the historian, 
whose grandfather was the Mr. Edward Gibbon so 
severely mulcted, has given, in the " Memoirs of 
his Life and Writings," an interesting account of 
the proceedings in Parliament at this time. He 
owns that he is not an unprejudiced witness ; but, 
as all the writers from which it is possible to ex 
tract any notice of the proceedings of these disas 
trous years were prejudiced on the other side, the 
statements of the great historian become of addi 
tional value. If only on the principle of audfy 
altcram partem, his opinion is entitled to considera 
tion. " In the year 1716," he says, " my grand- 



THE SOUTH SEA BUBBLE. 327 

father was elected one of the directors of the South 
Sea Company, and his books exhibited the proof 
that before his acceptance of that fatal office, he 
had acquired an independent fortune of 60,000. 
But his fortune was overwhelmed in the shipwreck 
of the year 1720 and the labors of thirty years 
were blasted in a single day. Of the use or abuse 
of the South Sea scheme, of the guilt or innocence 
of my grandfather and his brother directors, I am 
neither a competent nor a disinterested judge. Yet 
the equity of modern times must condemn the 
violent and arbitrary proceedings, which would have 
disgraced the cause of justice, and rendered injus 
tice still more odious. No .sooner had the nation 
awakened from its golden dream, than a popular 
and even a parliamentary clamour demanded its 
victims ; but it was acknowledged on all sides, that 
the directors, however guilty, could not be touched 
by any known laws of the land. The intemperate 
notions of Lord Molesworth were not literally acted 
on ; but a bill of pains and penalties was introduced 
a retroactive statute, to punish the offences which 
did not exist at the time they were committed. 
The legislature restrained the persons of the direct 
ors, imposed an exorbitant security for, their appear 
ance, and marked their character with a previous 
note of ignominy. They were compelled to deliver, 



328 THE SOUTH SEA BUBBLE. 

upon oath, the strict value of their estates, and were 
disabled from making any transfer or alienation of 
any part of their property. Against a bill of pains 
and penalties, it is the common right of every sub 
ject to be heard by his counsel at the bar. They 
prayed to be heard. Their prayers were refused, 
and their oppressors, who required no evidence, 
would listen to no defence. It had been at first 
proposed, that one-eighth of their respective estates 
should be allowed for the future support of the 
directors ; but it was especially urged that, in the 
various shades of opulence and guilt, such a pro 
portion would be too light for many, and for some 
might possibly be too heavy. The character and 
conduct of each man were separately weighed ; but, 
instead of the calm solemnity of a judicial inquiry, 
the fortune and honor of thirty-three Englishmen 
were made the topics of hasty conversation, the 
sport of a lawless majority ; and the basest member 
of the committee, by a malicious word or a silent 
vote, might indulge his general spleen, or personal 
animosity. Injury was aggravated by insult, and 
insult was embittered by pleasantry. Allowances 
of 20 or Is. were facetiously moved. A vague re 
port that a director had formerly been concerned in 
another project, by which some unknown persons 
had lost their money, was admitted as a proof of his 



THE SOUTH SEA BUBBLE. 329 

actual guilt. One man was ruined because he had 
dropped a foolish speech, that his horses should feed 
upon gold; another, because he was grown so 
proud, that one day, at the treasury, he had refused 
a civil answer to persons much above him. All 
were condemned, absent and unheard, in arbitrary 
lines and forfeitures, which swept away the greatest 
part of their substance. Such bold oppression can 
scarcely be shielded by the omnipotence of parlia 
ment. My grandfather could not expect to be 
treated with more lenity than his companions. His 
Tory principles and connections rendered him ob 
noxious to the ruling powers. His name was re 
ported in a suspicious secret. His well-known 
abilities could not plead the excuse of ignorance or 
error. In the first proceedings against the South 
Sea directors, Mr. Gibbon was one of the first taken 
into custody, and in the final sentence the measure 
of his fine proclaimed him eminently guilty. The 
total estimate, which he delivered on oath to the 
House of Commons, amounted to 106,543 5s. 6d., 
exclusive of antecedent settlements. Two different 
allowances of 15,000 and of 10,000 were moved 
for Mr. Gibbon ; but, on the question being put, it 
was carried without a division for the smaller sum. 
On these ruins, with the skill and credit of which 
parliament had not been able to despoil him, my 



330 THE SOUTH SEA BUBBLE. 

grandfather, at a mature age, erected the edifice of 
a new fortune. The labors of sixteen years were 
amply rewarded ; and I have reason to believe that 
the second structure was not much inferior to the 
first." 

The next consideration of the legislature, after the 
punishment of the directors, was to restore public 
credit. ^The scheme of "Walpole had been found in 
sufficient, and had fallen into disrepute. A compu 
tation was made of the whole capital stock of the 
South Sea Company at the end of the year 1720. 
It was found to amount to thirty-seven millions 
eight hundred thousand pounds, of which the stock 
allotted to all the proprietors only amounted to 
twenty-four millions five hundred thousand pounds. 
The remainder of thirteen millions three hundred 
thousand pounds belonged to the company in their 
corporate capacity, and was the profit they had 
made by the national delusion. Upwards of eight 
millions of this were taken from the company, and 
divided among the proprietors and subscribers 
generally, making a dividend of about 33 6s. Sd. 
per cent. This was a great relief. It was further 
ordered, that such persons as had borrowed money 
from the South Sea Company upon stock actually 
transferred and pledged at the time of borrowiAg to 
or for the use of the company, should be free from 



THE SOUTH SEA BUBBLE. 331 

all demands, upon payment of ten per cent, of the 
sums so borrowed. They had lent about eleven 
millions in this manner, at a time when prices were 
unnaturally raised; and they now received back 
one million one hundred thousand, when prices had 
sunk to their ordinary level. 

But it was a long time before public credit was 
thoroughly restored. Enterprise, like Icarus, had 
soared too high, and melted the wax of her wings ; 
lift Icarus, she had fallen into a sea, and learned, 
wftle floundering in its waves, that her proper ele- 
mlht was the solid ground. She has never since 
ittempted so high a flight. 

In times of great commercial prosperity there 
has been a tendency to over-speculation on several 
occasions since then. The success of one project 
generally produces others of a similar kind. Popu 
lar imitativeness will always, in a trading nation, 
seize hold of such successes, and drag a community 
too anxious for profits into an abyss from which 
extrication is difficult. Bubble companies, of a kind 
similar to those engendered by the South Sea pro 
ject, lived their little day in the famous year of the 
panic, 1825. On that occasion, as in 1720, knavery 
gathered a rich harvest from cupidity, but both 
suffered when the day of reckoning came. The 
schemes of the year 1836 threatened, at one time, 



THE SOUTH SEA BUBBLE. 

results as disastrous ; but they were happily averted 
before it was too late.* 

* The South Sea project remained until 1845 the greatest ex 
ample in British history of the infatuation of the people for com 
mercial gambling. 



NOTES TO SOUTH SEA BUBBLE. 

" The South Sea Bubble now appears, 
Which caused some smiles, some countless tears, 
And set half Europe by the ears." 

(1.) BLUNT, the projector, had taken the hint of 
his plan from the famous Mississippi scheme formed 
by Law, which in the preceding year had raised 
such a ferment in France, and entailed ruin upon 
many thousand families of that kingdom. In the 
scheme of Law there was something substantial. 
An exclusive trade to Louisiana promised some 
advantage ; though the design was defeated by the 
frantic eagerness of the people. Law himself be 
came the dupe of the regent, who transferred the 
burden of 1,500,000,000 of the king s debts to the 
shoulders of the subjects; while the projector was 
sacrificed as the scapegoat of the political iniquity. 
The South Sea scheme promised no commercial 
advantage of any consequence. It was buoyed up 
by nothing but the folly and rapaciousness of indi 
viduals, which became so blind and extravagant, 



334: THE SOUTH SEA BUBBLE. 

that Blunt, with moderate talents, was able to 
impose upon the whole nation, and make tools of 
other directors/* SMOLLETT. 

(2.) All distinction of party, religion, sex, charac 
ter and circumstances, were swallowed up in this 
universal concern, or in some such pecuniary pro 
ject. Exchange Alley was filled with a strange con 
course of statesmen and clergymen, churchmen and 
dissenters, whigs and tories, physicians, lawyers, 
tradesmen and even with multitudes of females. 
All other professions and employments were utterly 
neglected; and the people s attention wholly en 
grossed by this and other chimerical schemes, 
which were known by the denomination of bub 
bles. Hid. 

(3.) Men of good estate sold house and land in 
order to become great shareholders ; merchants of 
eminence neglected their established traffic to reap 
50 per cent, of profit ; and the whole nation became 
intoxicated with percentages, dividends and trans 
fers. . . . . . Subscription succeeded sub 
scription, each mounting above the other till the 
stock rose to above a thousand per cent. And the 
insolence of the Governor and Directors rose in 
proportion until it was said, " We have made them 



NOTES. 335 



kings and they deal with everybody as such." 
CIVIL TRANSACTIONS, 1720. 

(4.) " To speak in a gaming style," said a sober 
financier of the day, " the South Sea stock must be 
allowed the honor of being the gold table ; the bet 
ter sort of these bubbles, the silver tables ; and the 
lower sort, the farthing tables .for the footmen." 
But every day brought forth a new project till all 
trade was suspended save this gambling in shares- 
till Change Alley was crammed from morning till 
night with dukes, lords, country squires, parsons, 
dissenting ministers, brokers and jobbers, aad men 
of every possible color and description nay, the 
very ladies appeared there at times in their eager 
ness to transact their own business. Pict. History 
of England. 

(5.) So general had been the gambling, that one 
who took the pains to count the exceptions among 
ministers and noblemen of highest rank, could only 
name Lord Stanhope and the Dukes of Argyle and 
Eoxburgh as not having been "in the stocks." 
Walpole, notwithstanding his denouncement of the 
scheme, had been deeply in it, and had been a great 
gainer by it, having sold out at the highest price, 
leaving his wife to speculate on her own account. 
lUd. 



336 THE SOUTH SEA BUBBLE. 



(6.) It was said and believed that Ms majesty 
and his ill-favored German mistresses, by buying at 
the lowest and selling out at the highest, had 
realized enormous sums, which were all carried 
over to Hanover, to be hoarded or spent there. It 
was also said that these rapacious sultanas, and 
some of the king s ministers as well, had received 
large sums in stock from Sir John Blunt, the pro 
jector, and others, to recommend the project. 
lUd. 

(7.) The mental aberration of the public proved 
itself in the most preposterous demand for shares, 
from persons willing to stake not only every penny 
they had, but many pounds which they had not. 
The proverb that " one fool makes many," found a 
parallel in the fact that one knave makes many ; 
for the South Sea schemer called into existence a 
number of imitators, all anxious to profit by the 

credulity he had excited Those who 

witnessed the Kailway mania of 1845, can form a 
conception though a very inadequate one of the 
madness which prevailed in the early part of the 
eighteenth century under the cunning influence of 
Blunt, who, strange to say, was a living illustration 
of a marvellous misnomer, for this Blunt was the 
essence of sharpness, at a time when obfeuseness was 



NOTES. 337 

the characteristic of all the rest of the community. 
The amiable weakness which, in 1845, induced the 
whole population to concur in planning railways 
for every hole and corner of the world, the philan 
thropy which would have whirled the Cherokees 
through the air at sixty miles an hour and twenty 
per cent, profit, or brought Kamschatka, Chelsea, 
the Catskill mountains, Knightsbride and Niagara, 
all into a group, by the aid of trunklines or 
branches connecting the whole of them together, 
the mixture of benevolence and self-interest which 
suggested these noble achievements, cannot bear a 
comparison with the universality of the movement 

that the South Sea bubble called forth 

Royalty itself had not been exempt from the pre 
vailing madness, and the Prince of Wales had been 
appointed governor of the Welsh Copper Company, 
which was to have supplied saucepans to the whole 
civilized world, and kept the pot boiling for the in 
habitants of every corner of the globe 

In proportion to the extreme credulity the nation 
had shown, was the savage disappointment it now 
exhibited. The directors of the South Sea Com 
pany, who had been encouraged in their audacious 
swindling by the blind rapacity of their dupes 
who, in their haste to devour everything they could 
\lay hold of, swallowed every knavish story they 

15 



338 THE SOUTH SEA BUBBLE. 

were told the directors, who, after all, had merely 
speculated on the avarice and stupidity of the rest 
of the world, were assailed with the utmost vindic- 
tiveness. Their conduct was brought before par 
liament ; some of them were taken into custody, 
and all were called upon to explain the grounds on 
which these calculations of profits were made, 
though the stockholders were not required to state 
what reasons they had for believing, with their eyes 
shut, all the evidently fallacious promises which 
had been held out to them. A BECKET. 

(8.) In fact, the emanation from Law s brain 
caused an epidemic delirium in Europe ; strangers 
brought their money to us, we carried ours abroad ; 
but if all nations appeared equal in their cupidity, 
the difference of national character appeared after 
the explosion. In England, the blow was terrible, 
and the throne itself was shaken ; members of par 
liament were proscribed and expelled ; the rage of 
many terminated in suicide. In France, the luxury 
and pleasure created during the system^ adorned its 
decline and survived its fall. There was a great- 
deal of noise and very little action ; embarrassment 
for a few, but no danger to the government. LE- 
HONTE S Hist, de la jRegence. 



COOPER S WORKS. 



OF THE FRESS. 



The Boston Traveller. 

We are at last to have a perfect edition of Cooper s noble works, one which his mul 
titudinous admirers will not be ashamed to place alongside of the best edition of Scott. 
The publication has been commenced by Messrs. "W. A. Townsend & Co., of New 
York, well known for liberality and enterprise, and who can be depended upon to 
redeem their pledges to the reading world. This edition will consist of thirty-two 
volumes, each volume to contain a work complete, and will embrace all the author s 
novels, from the "The Pioneers" to "The Ways of the Hour." One volume will be 
published on the first day of every month, until the edition shall have been completed, 
commencing February 1st, 1S59. Nothing has been left undone to render the edition 
as perfect as art, enterprise, and liberal expenditure can render it. The typography 13 
of the most elegant description. The paper is of the very first class of that manufac 
ture, strong, clean, and smooth as the palm of a lady s hand. The binding is at once 
durable and beautiful. The size is the crown octavo, universally allowed to be the 
best both for convenience and preservation. The illustrations, which will be five 
hundred in number, will all be designed by that consummate genius, F. O. C. Darley, 
who will be thoroughly at home on the pages of Cooper. Sixty-four of the illustra 
tions will be on steel, engraved by the Smilies, Alfred Jones, Delnocc, Burt, Girsch 
Phillibrown, Andrews, Pease and Schoff. Those on wood will be the work of leading 
artists, among whom are Edmonds, Whitney, the Orrs, Bobbett, and Anthony. Thus 
much for the externals of the volumes. In other respects they will be found equally 
worthy of the attention of the public. Each volume will contain the last corrections 
of the author, and will on that account alone present an unrivalled claim to superiority 
over any other edition. The publication opens with " The Pioneers," one of the best 
of the author s works, as it was one of the earliest of them. It is a true picture of 
American life as it was nearly seventy years ago, and as it is now on the remote western 
frontiers of the republic. The origin of Templeton, and the manner of life there, are 
things familiar to thousands of Americans. Perhaps there is no one of Cooper s works 
that is, on the whole, so agreeable as the " Pioneers." The scene is far removed from 
city life, most of the characters are by no means remarkable, and the incidents are not 
often " strong," yet the author has made of his ordinary materials one of the most 
attractive tales in the language, and which has been translated into almost every lan 
guage that has readers. He takes us through the seasons as they were in the olden 
times, opening with winter, the characteristics of which in our climate were never 
more forcibly drawn than they are in this most readable of novels; while those of 
summer and spring are in their turn described, and the charms of autumn are briefly 
introduced. " The Pioneers " is the first of those of Cooper s works that have been 
specifically denominated the " Leather Stocking Novels," and which have been not less 
popular than his admirable sea stories. Natty Bumpoo here first appears, not in tho 



order of his life, but in the order of the author s creation. Perhaps Cooper s famo 
depends as much upon this one character as upon most of his other creations com 
bined. He has made the most of him, and now it will be seen that Barley, laboring on 
this shadowy yet real being in the realms of romance, has given him a new title to gen 
eral admiration. We venture to predict that this edition of Cooper will be eminently 
successful, that it will find its way into the hands of every person of taste, and that no 
library, public or private, can aflford to be without it 

The Boston Advertiser. 

We have been highly gratified with the examination of specimen pages of a new 
edition of Cooper s Novels and Tales, to be published in New York by Messrs. W. A. 
Townsend & Co., with illustrations from steel plates, from drawings made expressly for 
the work by Mr. F. O. C. Darley. Mr. Darley is excelled by no artist in the delicacy 
and elegance of his delineation of figures. His illustrations of Cooper s works have 
been, as we understand, a "labor of love " with him for a long period. He thoroughly 
appreciates the author, and is able to give expression to the true spirit of his works. 
If we are not mistaken, Cooper is destined to be still more popular with succeeding 
generations than he was with his cotemporaries ; and this is saying a great deal. He is 
thoroughly American, and original ; he gave permanent place in literature to the tra 
ditions and usages of a people who have now almost wholly disappeared from the con 
tinent formerly all their own. His "Deerslayer " and "Last of the Mohicans," cannot 
possibly be imitated with success by any future writer. They must always remain the 
great specimens of their class of tales. Cooper s sea stories are scarcely less remark 
able. But it is superfluous to speak in praise of the value or interest of these works, 
We have only now to do with the new edition, which promises to be a fitting dress for 
the author s text, with the appropriate ornaments of illustration. We predict for the 
work a large and permanent sale. 

The Providence Journal. 

We are glad at last to call attention to an American edition of Cooper s novels, 
which promises to be an honor to both publisher and author. It will contain the latest 
revisions, will be printed in good type on smooth and handsome paper, bound in richly 
ornamented covers, and illustrated by Darley with drawings on wood, and steel vuc- 
ncttes, executed in the highest style of art. The volume before us, the first of the 
series, is a beautiful book, and reflects great credit upon the publishers. 

If Messrs. Townsend & Co. carry out their design as they advertise to do, this edition 
of Cooper s novels will certainly be a magnificent enterprise, and a worthy monument 
to the fame of the illustrious author. 

The Boston Evening Express. 

Messrs. W. A. Townsend & Co., of New York, have commenced the publication of a 
new and beautiful edition of this series of works, one volume to be issued on the first 
of each month until the whole set of thirty-two novels shall be presented to the 
public in a style of elegance, neatness and value which they deserve, but have never 
attained. 

" The Pioneers," one of the earliest and most popular of the series, has been selected 
by the publishers for their initial number, and it now lies upon our table. Its letter 
press, typography and binding are worthy of all praise; while its illustrations from 
steel plates one representing the killing of the deer, in the first chapter, and the other 
Leather Stocking reading the inscription on the tomb-stone of the Sagamore, in 
the last chapter from drawings made expressly for the work by F. O. C. Darley, are 
very artistic and excellent in their execution. 

If "The Pioneers" may be considered a sample of the entire series, we may say 
unhesitatingly, that the work upon which the enterprising publishers have entered, will 
be an honor to the trade. 



OPTIONS OF THE PRESS. 

The Utica (N. T.) Herald. 

We clap our hands and are glad at the inception of this first really worthy edition of 
Cooper s novels. With a full appreciation of Walter Scott, and the parnobilefratruni 
of living British novelists, with a knowledge not limited of contemporary fiction, and 
some acquaintance with Fielding. Smollett and Sterne, were we to have the privilege 
of perusing the works of but one novelist, we should, as an American, select above all 
others, those of J. Fenimore Cooper. Estimating, too, the effects of fiction on the inind, 
its tendency to give color to the imagination, topics to the fancy and to reflection, and 
fuel to ambition and the affections, we know that love for nature, an enlightened 
patriotism, kindly regard for humanity, pride in the beauty of our scenery, and sym 
pathy with our early history, spring from every page of the Leather Stocking and 
Revolutionary Tales. 

Take "The Pioneers," for example. Its scene is laid in Otsego county, in our own 
State. It fs descriptive of the early settlers in that region. Leather Stocking, a con 
necting link between Europeans and Indians, is one of the finest creations in all fiction, 
deserving to rank with Bobinson Crusoe, or the best of Scott s heroes. The spirit and 
circumstances of the early settlers can be better gathered from this work than from 
tomes of history. No New Yorker should read any novel before he has perused not 
only " The Pioneers," but the rest of the Leather Stocking series. 

The present edition is issued in beautiful style. The type is large, clear and open, 
the paper beautiful, and the binding tasteful and solid. Besides several small wood 
engravings, the present volume has two fine steel engravings from drawings by 
Parley ; one the death of the deer, the other, Natty at the grave of the Mohegan. 
The former is a capital scene of forest and hunting life ; the latter still and solemn 
and beautiful. They are worth studying as works of art, and are strong allurements 
to every beholder to peruse the story they so well illustrate. 

All of Cooper s novels are to be issued in this handsome style, and if we could havo 
our wish, would supplant nine-tenths of the current works of fiction. 

" The Press," Philadelphia. 

In this new and beautiful edition we have two engravings on steel, executed with 
delicacy and yet with force, from drawings by Darley, and a dozen beautiful and char 
acteristic head-pieces, executed on wood, after designs by the same artist, who really 
seems to have taken to illustrating Cooper, as a labor of love, so congenially has he 
translated the author s idea into that expression which an able artist sometimes happily 
seizes, which Darley never misses. This new edition of Cooper will probably have as 
large a sale as any series of volumes ever published in this country. It is emphatically 
one of the most splendid collections ever issued equalled only by the embellished 
Abbotsford edition of Scott s Novels, which is too bulky in size and delicate in adoxn- 
ment for daily use. On the contrary, this Cooper is equally adapted for the Parlor and 
the Library. 

The Boston Transcript. 

AN AMERICAN LITERARY ENTERPRISE. Such is emphatically the new edition ot 
Cooper s novels. The initial volume, containing "The Pioneers," has Hist ap 
peared. It is printed from the most neat and distinct type, on white, substantial 
paper, and bound in a handsome and appropriate style. A good library edition of 
Cooper has long been a desideratum. W. A. Townsend & Co. have chosen a seasonable 
moment for supplying this national want. There is a comparative lack of good new 
fiction, and readers gladly resort to old favorite and standard reading in this depart 
ment. The time which has elapsed since Cooper s death, has made his fame and works 
more precious to his countrymen. The success of the Household Waverley, proves 
that the most familiar of popular authors was universally welcome in a new and 
attractive shape. Libraries are forming throughout the country, and to each of these 
a handsome edition of Cooper is indispensable. Every intelligent and patriotic Ameri- 



can desires to own one, for the appreciation of native productions has vastly increased 
within the few past years. For these and many other reasons, we call the publication of 
this edition seasonable. 

And now, a word or two as to its peculiar merits. We have spoken of the mechan 
ical execution ; we must refer to the correct text, and to the full introductions to the 
convenient arrangement each novel being complete in one crown octavo as superior 
to anything before realized. The price a dollar and a half per volume, is very mode 
rate. It is proposed to issue the series in successive volumes, beginning on the first of 
February, and continning on the first of each month until the set is complete. Thus 
thirty-two volumes will include all the tales and romances, with the author s latest 
revisions. 

In addition to these claims, this new and beautiful edition of Cooper, has received 
its crowning distinction from the vigorous, skillful, and, we must add, sympathetic 
pencil of F. O. C. Darley. His drawings are universally admired for their expression, 
correctness and beauty ; but in these illustrations of Cooper, he seems to have found 
his most congenial sphere. No designs executed in this country can compare with 
them for masterly finish and effect. His genius is akin to Cooper s in a certain facile 
energy ; he catches the very spirit of the novelist s scenes and characters. In each 
volume there are two steel plates and twelve designs on wood: the drawings are full 
of spirit the groups eminently dramatic; they are finished up in the most refined 
style of execution elaborately conceived and executed in line and etching. In a word, 
taking in view the joint triumphs of author and artist, and the liberal taste of the pub 
lisher, we consider this edition of Cooper a memorable and precious example of native 
genius and enterprise, and a landmark in the progress of American literature and 
patriotic feeling. 

The Boston Journal. 

Although Cooper is pre-eminently a national novelist, we have no library edition of 
his works comprising his latest revisions and handsomely printed. The one now com 
menced is in every respect desirable. It is printed on tinted paper, with new type, 
each work complete in one volume, and is bound in a substantial style, suitable for a 
library. Its peculiar excellence, however, lies in its superb illustrations by Darley. 
an artist who is fitted for his task not less by his long study and delicate, appreciation 
of the author than by his acknowledged skill in his art. So entirely has he made the 
creations of the novelist s fancy his own, that they stand out with the same bold, vivid 
individuality in the sketch of the artist as on the page of the author. Every detail is 
given with fidelity, so that nothing detracts from the pleasure of a harmonious whole. 
Each work contains two fine engravings on steel and twelve on wood. 

The, Northampton (Mass.) Gazette and Courier. 

It is truly a magnificent undertaking, and is to bo carried out in a generous and 
liberal manner. Each volume is beautifully illustrated with two steel engravings, de 
signed by F. O. C. Darley, and numerous smaller wood-cuts by the same master 
hand. When the leading American artist brings his genius to the task of illustrating 
the works of America s greatest writer of fiction, the result will be something of more 
than ordinary merit The enterprise is truly American, and commends itself to the 
reading public in general, and will be hailed with special delight by all admirers of 
Cooper. The first volume, "The Pioneers," just issued, is beautifully printed on 
thick, heavy paper, and it is a mystery how a volume of such elegance can be furnished 
at the low price of $1 50. 

The N. Y. Evening Post. 

The execution of the volume is in all respects worthy of the genius of the author 
whose work it perpetuates, and cannot fail to renew the interest that has for .<> long a 
time made the name of Cooper one of the most prominent in American literature. 
The designs, by Darley, arc not only executed in the best style of that emini iit 



OPINIONS OF THE PRESS. 5 

artist, but are as original in conception as is the tale whose incidents they delineate 
The illustration of this series of novels has long been a favorite idea with Darley, and 
we can discover, not only in the two sketches of Leather Stocking, which grace the 
present volume, but in several others that have been shown to us, the love of the sub 
ject which the artist has brought to his labor. Henceforth the reputation of Darley 
will be associated with his illustrations of Cooper, and no edition will be considered 
complete without them. 

The Buffalo Commercial Advertiser, 

Messrs. TOWNSEND & Co. have engaged in the enterprise of publishing an edition of 
the complete works of the great American novelist, in a style of elegance in typo 
graphy and binding befitting the high merits of the series. The American public owe 
a heavy debt of gratitude to Mr. Cooper, who was the first novelist to win for this 
country an enduring fame in Avorks of fiction. Nearly all his works arc purely Amer 
ican in character, and American in the true sense, the various personages introduced 
being truthful portraits of some phase of American character. His descriptions of 
American scenery, too, are among the most charming in our recollection. Add to this 
that the plot of all his tales is explicit, consequent, and clear, and his style as a writer 
eminently pleasant, and we have sufficient reason for ranking Mr. Cooper as the first 
of American novelists. 

The Boston Evening Gazette. 

The typographical execution and general appearance of "The Pioneers" are most 
creditable to Messrs. TOWNSEND & Co. Paper, print, binding, illustrations, arc alike 
excellent. When completed, no handsomer volumes will grace the shelves of a lib 
rary. It seems almost needless at this late day to urge the importance of possessing 
the works of Fenimore Cooper. His fictions have as yet been equalled by no Amer 
ican author. They possess a charm for both old and young ; are unexceptionable in 
their tone; have a vividness of description no other romancist has approached, and 
are truly American in all their characteristics. But what use to praise a man who 
created a Leather Stocking and a Naramattah? What avails laudation of the author 
of "The Spy" and of "The Wept of the Wish-ton-Wish ?" His stories should be 
familiar in every household, and to such as may not own them, we would cordially 
and honestly commend the edition to which we allude. 

The Portland (Me.) Argus. 

The style and finish of the work are such as to make it a fitting testimonial to the 
genius of the most fascinating of all our native writers, and it should receive the sup 
port and approval of the American public. 

The New York Tribune. 

In this first installment of TOWNSENP S new edition of the novels of Cooper we have 
a promise that the productions of the great American writer of fiction will be pre 
sented to the public in a form worthy of the author and his reputation. The edition 
will be comprised in thirty-two volumes, to be issued on the first day of each month, 
containing the latest corrections and revisions of the author, and illustrated by 
original designs from the pencil of Darley, and engraved in a style of superior accu 
racy and beauty. The volume now issued amply sustains the representations of ik~n 
publishers. It has rarely, if ever, been surpassed by any production of the press li 
this country, in exact and finished workmanship, and in elegance of embellishment. 
Mr. Dai-ley s designs have caught the genuine spirit of the novelist, and reproduce old 
Leather Stocking in different scenes with the fresh naturalness of the original page. 
The issue of this tempting edition can hardly fail to induce a host of readers to renew 
the pleasure with which they first made tho acquaintance oi this noble illustration of 
the genius of Fenimore Cooper. 



G COOPER 8 WORKS. 

The Home Journal. (TEO. P. MOREIS and N. P. WILLIS.) 

The initial volume of this American series of novels is just published. It would be 
a work of supererogation to attempt an analysis of this volume. Every one is familiar 
with its contents. It has been read and re-read in all parts of the land ; but, until the 
appearance of this present volume, there has been no edition of Cooper s Novels 
worthy, in all particulars, of his name and fame. It is the mechanical execution of the 
book, therefore, of which we would now speak. It is printed from clear and distinct 
type, and bound in a most substantial and handsome manner. Each novel will be 
complete in one crown octavo volume, and the price a dollar and a half is moderate 
The edition will contain all the tales and romances of Cooper, and will be comprised 
in thirty-two volumes, to be issued on the first day of each month till the work is 
completed. An attractive feature of this edition will be the skillful and admirable 
designs of Darlcy, embodying the very spirit of the novelist s scenes and characters. 
Each volume will contain two steel engravings and twelve wood-cuts. The steel 
plates will be executed in the style and finish peculiar to bank-note engraving, and 
are, indeed, executed by the best note-engravers in this country. They are a com 
bination of line and etching, and are elaborately and charmingly executed. 

TJie Rochester Union and Advertiser 

A GREAT AMERICAN ENTERPRISE SPLENDID EDITION OF COOPER S NOVELS. It fell 
to an American publishing house to bring out the first really beautiful illustrated 
edition of Scott s Novels, and however much we felt bound and pleased to commend 
an enterprise so creditable, we felt that our own great novelist, Cooper, speaking for 
his country, deserved a like remembrance. Not that we admired the man, but his 
genius stands unquestioned at home and abroad. His works have done as much to 
perpetuate the memory of revolutionary heroism, pioneer enterprise, and naval gal 
lantry in our people, as all the history ever written. Cooper had his faults, and they 
were not few, but all who have read his charming stories of fiction will be ready to 
forget the peculiarities of the writer if they cannot forgive his errors. The tales of 
Leather Stocking, the noble hero of five of his novels, the story of " The Wept of 
Wish-ton-Wish," are vivid pictures of pioneer life, when civilization was contending 
against the savage possessors of this continent. "The Spy" and "Lionel Lincoln" an* 
tales of the EC volution, which cannot be read too much. The " Pilot," " Red Rover,* 
and " Water Witch" are charming sea tales, and illustrate the gallantry of our early 
seamen. We say that we felt that our great novelist should not be forgotten. We are 
happy to see it announced that his works have not been forgotten, and that an edition 
of these novels will soon begin to appear from an American press that will excel any 
thing of the kind ever issued in this or any other country. 

The Troy Daily Times. 

We have before alluded to Townsend & Co. s republication of the works of J. Fen- 
irnore Cooper. No American author was ever more versatile or successful. He was 
well called a writer "who had the sea as his empire and the forest as his home." Of 
his long list of books, there are none that have ceased to be popular, and several rank 
with the most generally circulated literature of the country. With these may Lc 
reckoned "The Bed Rover," one of the finest sea tales ever written, just issued in 
admirable form for permanent preservation, and illustrated with two magnificent en 
gravings, from drawings by Darley. For sale in Troy, West Troy, Lansingburgh, and 
Cohoes, by W. B. Jones, agent. 

Concord (N. If.) Democrat. 

COOPER S NOVELS A SPLENDID EDITION. W. A. Townsend & Co., New York, book 
publishers, are engaged in an enterprise which should meet with the enthusiastic ap 
proval of the American public. They are issuing a new and splendid edition of the 
works of J. Fenimore Cooper an editioh which should be found in every well-assorted 



OPINIONS OF THE PRESS. 7 

library. No handsomer or more luxurious volumes than those of this edition of Cooper s 
Novels the most epicurean book taste could desire. The works of Cooper have become 
classic ; and have contributed more than the productions of any other single author, 
to give American literature a distinct and proud personality among the literatures of 
the world. We read Cooper s Novels, years ago, but find it such a luxury to peruse- 
them in this edition, that we mean to go over them again. Such will bo the experience 
of many, we trust. 

Tfie Baltimore, Patriot. 

As we expected, this best edition of the greatest of American novelists has proven 
a complete success. It is gratifying to notice the promptness with which the admirers 
of the distinguished novelist have responded to the prospectus of the publishers, and 
placed beyond a doubt the regular and perfect issue of an edition of his immortal works 
that shall be an honor to his memory, and a credit to American taste and American 
art. Considered as a national enterprise, it merits this success, and, as we have said, 
we are glad to chronicle it. Messrs. W. A. Townsend & Co. have spared no outlay or 
labor to make the work, as it is, the most elegant and satisfactory ever issued from the 
American press. 

Tlie Philadelphia Daily News. 

This is a great enterprise. The publishers have already invested an almost fabulous 
sum in the present series. The five hundred illustrations alone, all designed by 
Darley, and including sixty-four engravings on steel, would involve a handsome out 
lay. But there will be no risk. The American people possess sufficient taste, liberality, 
and patriotism to render it worth while to present them a model edition of their favor 
ite representative novelist. "We will not offend the intelligence of our readers by 
attempting any analysis of novels whose characteristics are so universally known 
wherever the English language is read or spoken, as those of Cooper. Suffice it to say 
that they are now being " dressed" in admirable style. 

The New York Leader. 

We made the inevitable remark, in reviewing the first number of this admirable 
series, that it could only be a work of supererogation to attempt criticism upon the 
novels of Fenimore Cooper, at this late day. The issue of the second number of tho 
series "The Eed Kover" recalls the observation, and necessitates its repetition. It 
is well known to all writers, and to most readers of fiction, that tho u Eed Eover" was 
tho great original and type of a class of works which havo since so well filled tho 
shelves of booksellers, and the attention of readers : i. e., the nautical tale, with char 
acter painting as a component. Few novelists who enjoy opportunity for the study of 
character ever know enough about a ship to distinguish the spanker-boom from the 
cat-head, or to know that " splicing the main brace" is any thing more than a nautical 
evolution ; and the result is a series of tales which may embarrass landsmen, but can 
only provoke a smile upon the faces of salt-water sailors. Cooper was sailor as well 
as student had seen blue water and smelt powder ; and the " Eed Eover" was tho 
best result. We need only add that this second volume of Messrs. Townsend & Co. s 
series is quite up to the mark of the former in paper, type, and binding ; and equally 
excellent, though less profuse, in the inimitable illustrations by Darley. 

Tlie Buffalo Courier. 

Too much cannot be said in praise of the typographical execution of this edition, 
and of the spirited illustrations which accompany each volume. Nothing which the 
present advanced stage of the book-making art can command has been neglected in 
their publication. Beautiful as these books are, they are not too ornate nor too sub 
stantial to be the fitting mediums of acquainting the American people more fully with 
the writings of the great American novelist. We learn that there are about one 
hundred subscribers in this city. The number certainly ought to be doubled. 



8 COOPER 8 WORKS. 

TJiA PJiUadelphia Ledger. 

W. A. Townsend & Co., publishers, New York, are issuing an illustrated edition of 
Cooper s Novels, with drawings in steel and wood byDarley. The volumes issued so 
far are the " Pioneers" and "Bed Eover," and, judging from these specimen volumes, 
the collection will be the most beautiful edition of these national romances which 
has ever come from the press. They are a credit to the publishers, and their enter 
prise deserves the highest success. Each volume is printed on superfine cream-tinted 
and calendered paper from the most perfectly-formed type, in a large crown octavo 
page, elegantly bound in embossed cloth, with bevelled edges. In elegance and 
artistic finish they are not to bo surpassed. 

The Rome (N. F.) Sentinel. 

Messrs. W. A. Townsend & Co., of New York, have commenced the issue of their 
new and splendid illustrated edition of Cooper s works, which was announced some 
time since. The first of the series, as it now appears, is the " Pioneers," a story of 
Southern New York. The book, in mechanical appearance, exceeds even our ex 
pectations from the promise made by the publishers. Nothing ever issued from the 
press, except it be something of the parlor annual kind, can compare with this work. 
The paper, printing, binding, and all else are in keeping with the illustrations by 
Darley, which are his crowning triumph as the first American artist. In such a garb 
the capital tale of the " Pioneers" looks like a new story. The tales of Cooper arc, 
many of them, of an historic kind, intended to portray American character, and they 
are as pure as any fiction ever written. If parents and others in charge of the young 
would introduce to them literature as pure as the writings of Cooper, the literary 
taste of the youth of our country would not become vitiated and poisoned as it now 
is by the stuff which is pouring daily from the press in the various^forms of romance. 

Tlie Springfield (Mass. ) Republican. 

The second volume of Townsend & Co. s beautiful edition of Cooper s Novels con 
tains the " Ked Eover." Of the style and value of this edition we have spoken be 
fore in sincere commendation. If any body supposes it is too highly praised, let him 
look at it. The edition is one of the finest specimens of the typographical art ever 
issued by the American press. 

TJie Wilmington (Del.*) Gazette. 

Tho present volume contains the " Eed Eover," the second of Cooper s great sea 
stories in the order of production, it having been written in 1827, but unequivocally 
the greatest of them all. We are glad to see that this elegant edition of the greatest 
of American novelists is a grand success. From all parts of the country it has been 
hailed with delight and admiration, the promise of the publishers that it "shall excel 
in elegance, artistic beauty, and mechanical perfection any publication heretofore 
issued in this country," thus far being vindicated to the letter. The volumes are 
published monthly, and should find a place in every American library. 

The Hartford Courant. 

This edition, from the elegance of its binding, the clearness of its typography, tho 
fineness of its paper, and the beauty of its embellishments, is far superior to any of 
the previous editions of this famous novelist. In fact no American fiction writer has 
ever before been honored by so splendid a dress. 

"The Eed Eover" first appeared in 1827, being the second of Coopers sea stories. 
It created a great sensation in the reading world, particularly in England, where it was 
repeatedly dramatized. The older of our readers will remember the interest attracted 
by Cooper^ tales scarcely surpassed by Sir Walter Scott * and "Tho Eed Eover" is 



OPINIONS OF THE PEESS. 

one of the best. In its new dress it cannot fail to be pleasurably received by the 
numerous subscribers to the edition. The illustrations drawn expressly for this 
edition by Darley are in his well-known, inimitable style ; a style that cannot be sur 
passed by any living artist. 

The Boston Herald. 

THE EBD EOVER. This is the second volume of the finest edition of Cooper s Novels 
that has ever yet been given to the public, and the admirers of our unapproachable 
American should not fail to improve the present opportunity to possess Cooper in 

this elegant form. 

The Home Journal. (MoEEis & WILLIS.) 

"The Eed Eover" is the last issue of the new edition, published by Townsend & 
Co., of America s greatest novelist. The engravings excel even the ones that illustra 
ted the first of the series " The Pioneers." No such excellent illustrations have ap 
peared in any work ever published in this country. They are truly admirable, both 
in design and execution. In its typographical appearance, the book is charming; tho 
contrast it presents to the same work, as published thirty years ago, is certainly most 
wonderful. 

The New York, Evening Post. (WILLIAM CTTLLEN BRYANT, Editor.) 

In the appearance of this remarkable sea-story, which has probably never been sur 
passed, if equalled, we have additional evidence that neither the illustrator nor the 
publishers have relaxed in their efforts to make this edition worthy of the subjects 
they delineate. It affords us great gratification to be enabled to state that the pub 
lishers have not been mistaken in their judgment of the want of a proper edition of 
Cooper s novels, and that the large expenditure which has been made for illustrations 
and typographical execution is likely to prove highly remunerative. 

The St. Louis Republican. 

THE EED EOVEB. This novel is part of the scries of Cooper s novels which has al 
ready been mentioned in our columns. This edition is beautifully illustrated by en 
gravings from drawings by F. O. C. Darley, and in the excellence displayed in its 
paper, print, and binding, is most creditable to the book manufacturing art in our 
country ; the admirers of Cooper s fictions will be pleased with this opportunity of 
possessing them in so elegant a form. 

The Commercial Bulletin, Boston. 

THE PIONEERS. There are numerous editions of Cooper s works, and the sale of 
every edition is large, thus proving how popular his writings are ; but no first class 
edition of his works, complete, and embracing all of his novels in uniform shape, with 
illustrations has been attempted until now. Some of his novels have been selected 
for the higher typographical honors, but even those lacked illustrations. Messrs. Town- 
send & Co. have commenced supplying the want that has been felt, and in " The Pio 
neers" have given us the first volume of an edition of the best American novels in a 
style quite worthy of their intrinsic merits, their great popularity, and the estimate 
in which they are held throughout the whole reading world. . Nothing more beautiful 
has ever been published by an American house. Every thing used in getting up the 
volume is perfect in its kind paper, type, binding, engravings, and so forth and the 
combination of all these good things is a splendid volume, of which any publishing 
house might be proud, and which is worthy to be placed among the finest collections 
of books in this or any other country. That the publishers do not mean to spare any 
cost on this edition, and that it will be illustrated in a style worthy of the author, nro 
facts established by their having engaged the services of so admirable an artist as 
Darley, than whom no man is more familiar with Cooper s writings. His drawings 
have been engraved by many of tho leading artists of the age, and are all that could 
be asked by the most fastidious taste, or demanded by tho most ardent admirer of the 
first American novelist. 



10 COOPER S WORKS. 

The Providence (R. /.) Press. 

THE COOPEE NOVELS. Messrs. Townsend & Co., of New York, are doing for our 
great American novelist, what Messrs. Black, of Edinburgh, did for "The Wizard of 
the North " giving him a publisher s lease of immortality, in sumptuousness of edi 
tion. The " Abbottsford Waverley" is not a whit more elegant than the new edition 
of Cooper s works, now issuing from Townsend s press, in crown-octavo volumes. 
Five hundred designs by Darley Avill illustrate the edition, and of these sixty will be 
engraved on steel by Smilie, the best engraver of this country. 

The Utica (N. Y.) Observer. 

It is our pleasure to draw attention to even a nobler monument to the fame of 
Cooper than the one which is to be raised at Cooperstown, It is a monument which 
will make him known to the thousands who can never view the contemplated shaft 
over Cooper s grave, and which will help to perpetuate his name long after the marble 
shall have crumbled, and been prostrated by the forces of the seasons. 

It is a great National Publishing and Artistic Enterprise to which we allude. It is 
in the hands of W. A. Townsend & Co., 46 Walker st, New York. That enterprising 
firm have already commenced the issue of "A splendid illustrated Edition of Cooper s 
Novels, issued in a style of unsurpassed elegance, and beautifully illustrated by five 
hundred Original Drawings, by Felix O C. Darley, executed on steel and wood in the 
costliest style, by the most eminent engravers in the country." We do not put too 
much emphasis on this, when we say that it is one of the most deserving artistic and 
publishing enterprises of the day. As Cooper stands at the head of our national novel 
writers, so does Darley, that great master of design, stand at the head of his profession. 
And thus we are to have the works of the greatest American novelist illustrated by 
the greatest American designer. 

The publishers, Messrs. Townsend & Co., in announcing their intentions, some 
time ago, did not promise more than they intend to fulfill. This we can say, because 
the first two novels of the series which will number thirty-two volumes, one of which 
is to be issued every month are before us. They are " The Pioneers," and the " Ecd 
Eover." The handsome type, the superfine, cream-tinted and calendered paper, the 
large crown-octavo page, the elegant binding ivith embossed cloth and bevelled edges, 
the designs on wood, and, above all, the vignettes on steel, executed with bank-note 
finish, fall not one whit behind what Townsend & Co. gave the reading world reason 
to expect. 

TJie Bangor (Me.) Daily Times. 

A SPLENDID ILLUSTRATED EDITION or COOPER S NOVELS. The lovers of beautiful 
books, and the admirers of the great American novelist, will hail wtih pleasure the 
splendid national edition which Messrs. Townsend & Co., of New York, have com 
menced issuing from their press. What Messrs. Ticknor & Fields have just accom 
plished for the Waverley, in their beautiful household edition, the New York publish 
ers will far excel in the presentation of Cooper, whose genius will bo honored with a 
stylo of dress and a beauty of illustration never equalled or attempted for a work of 
similar extent in this country, and which will reflect the highest credit upon American 
bookcraft. 

The New York Daily Times. 

Messrs. W. A. Townsend & Co. have performed a most acceptable service to Ameri 
can literature, by the publication of their new edition of Cooper s novels, of which 
three volumes, "The Pioneers," "Bed Eover," and the "Last of the Mohicans," have 
already been issued. The style in which these classical romances are published is 
the very highest that has been attained in American book-making. The designs of 
Darley, of which there are two in each volume, engraved in line on steel, and the 
wood vignettes, are among the finest specimens of illustrative art. The " Death of 
Scipio," one of the illustrations of the " Bed Bover," ranks among the most successful 



OPINIONS OF THE PRESS. 11 

efforts of the artist s pencil. The original of the picture was in the exhibition of the 
National Academy, last year, where it excited great admiration. 

The Rochester (N. Y.) Democrat. 

THE LAST OP THE MOHICANS. This is the third of the sumptuous edition of Cooper s 
novels, illustrated by Darley, the eminent designer. The genius of the American 
novelist has here portrayed the Indian character, as it was found to exist among the 
tribes who inhabited New York and the Canadas previous to the Bevolution. The 
English and the French alternately engaged the fierce aborigines as their allies, and 
fearful massacres of white men, by the treacherous savages, was the natural conse 
quence. One of the scenes depicted by the masterly pen of Cooper, is the massacre at 
the surrender of Fort "William Henry to the French. Another, is a battle between 
two Indian tribes the Delawares and Hurons. A love story, with adventures and 
hair-breadth escapes, captivity and rescue, tragedy and humor, all lend interest to a 
historical novel, in which the red men, who are now so nearly extinct in this part of 
the country take a conspicuous part. "When they are no more seen, these novels will 
present the character of the "Lost Tribes" in a life-like and masterly manner to 
future generations ; and the writings of Cooper will never die. 

The, Mobile (Ala.) Advertiser. 

There is no question that J. Fenimoro Cooper held the very front rank as a writer 
of fiction ; his popularity in this respect has had no parallel in this country. He 
originated a distinct class of fiction, national in its character, and patriotic in its aims 
and teachings. Notwithstanding the fertility of his pen, and the rapid production of 
his novels, he managed to preserve a remarkable freshness of style, and so to keep up 
the interest of the story, that the reader s attention never flags, nor his taste becomes 
cloyed. 

"We regard this enterprise as in some sort one of a national character. The first of 
American designers illustrating the works of the first of American novelists, treating 
altogether of American subjects and scenes, would certainly seem to entitle the com 
pleted work to the special consideration of American readers. 

The Concord (N. JT) Patriot. 

By a singular coincidence, two very decided recognitions of Cooper s genius trans 
pired on the first instant. Townsend & Co. issued the third volume of their magni 
ficent, new, illustrated edition of his novels, which chanced to be " The last of the 
Mohicans, 1 - and the United States Navy Department decided to name the new war 
steamship now building at Portsmouth navy-yard, the " Mohican." This action of 
the department has proved conclusively that the "Last of the Mohicans " was not the 
Iftst "Mohican," and is also a proud display of the lasting hold Cooper has upon the 

national heart The illustrations in this volume are, if possible, better executed 

than those in the two previously issued. "We could not suggest an improvement to 
this edition. It is entirely satisfactory, and we can but advise those who desire to 
possess Cooper s novels and who does not ? not to let slip this opportunity to get 
the best edition which will ever be offered to them. 

The Boston Recorder. 

The first volume of the series we have now before us, and it is in a style to meet the 
reasonable wishes of the author s greatest admirers. The paper is excellent, the type 
good, and the form and binding every way satisfactory. "We seldom look upon a 
fairer page, or take in hand a more tasteful volume. 

Of the particular work before us, the "Pioneers," we shall enter into no minute 
criticism. It is confessedly one of the most interesting of all the author s numerous 
und characteristic tales. Not to have read it, argues an oversight of a book with which 
every well-read American should be acquainted. The reading public are under great 



12 

obligations to Messrs. Townsend & Co. for this unequalled edition of an author whoso 
name is an honor to the nation, and whose fame is in all civilized lands, and of whom 
the Edinburgh Review has said : 

"The empire of the sea has been conceded to him by acclamation ; and in the lonely 
desert or untrodden prairie, among the savage Indians, or the scarcely less savage set 
tlers, all equally acknowledge his dominion. 

" Within this circle none dare move but he." 

The New Haven Palladium. 

The specimens shown us of the work are enough to captivate any body. The bind 
ing is elegant, and yet heavy and durable ; the paper is manufactured expressly for 
this purpose, and is richly tinted and calendered : the size is appropriate a large 
crown octavo, and the page is most beautifully printed. The illustrations, by the first 
of American artists, are truly creditable to him, and worthy of the work which they 
embellish. "Whether in the design or the execution they can hardly be surpassed. It 
is stated that the engravings alone cost $20,000. 

Cooper s novels deserve such an elegant dress better than any other American fiction, 
because they alone are truly American in every sense. "When Bryant said of him, 
" The creations of his genius shall survive through centuries to come," and "Webster 
said, " While the love of country continues, his memory will exist in the hearts of tho 
people," they but render a just tribute to his remarkable creative powers, and to the 
spirit of nationality that inspires all his writings. 

The New York Commercial Times. 

AN AMERICAN BOOK. Tho "Pioneers" of Cooper, illustrated by Darley, has just 
been issued by Messrs. W. A. Townsend & Co., as the first of a series of the works of 
the great novelist, whose bold conceptions of the woods and woodsmen of America 
have found a worthy illustrator in the artist by whose graceful and spirited pencil each 
of the volumes of the series is to be adorned. This edition, which is dedicated by the 
publishers to tho " American People," will compare favorably, in all the mechanical 
departments of type, paper, and binding, with any work of the kind hitherto issued on 
either side of tho Atlantic. But the distinguishing feature of the book before us is the 
conscientious rendering by Darley of two of tho most striking descriptive scenes in tho 
story. The conception of Leather-stocking as he calmly reloads his rifle, in the open 
ing scene with Judge Temple, and the grim sarcastic expression which the artist has 
infused into the hard old features of that stark coureur des lois, are beyond all praise, 
the whole figure teeming with character, which extends even to his rifle, and down 
to its very butt. Another design is an illustration of the closing scene Old Leather- 
stocking visiting the graves of the "Major," and the "Mohcgan," and is a very touch 
ing embodiment of a touching incident, full of pathos and expression. These de 
signs are admirably engraved, the one by Girsch, and the other by Wrightson. The 
volume is one of which the publishers may justly be proud; for seldom has there been 
issued in, popular form, a more elegant edition of a truly American book. 

The Newark (N. J.) Advertiser. 

THE PIONEERS. The issue of the splendid edition of Cooper s Works which is now 
commenced by the publication of "The Pioneers," is an undertaking of no little mag 
nitude and importance. It was an era in American authorship when Cooper issued a 
work, and the standing order of $5,000, made by Bentley of London for the English 
copyright was considered a matter of national pride. But these days are gone by. 
Cooper is not now the only (with Irving) American author with a European reputa 
tion. We have our works reprinted by hundreds, till we are no longer proud to have 
them stolen. May we soon be so grieved as to be willing to have an international 
copyright! Newer writings may have temporally hidden tho works of the great 
American novelist, but none in Europe can compete in popularity with him. And 



OPINIONS OF THE PRESS. 13 

ft* 

now we are glad to sec that a new edition de luxe is to honor the writer, and inspire a 
new enthusiasm into our own people. The style in which this edition is issued is 
worthy of the man and his rank among our foremost native writers, Darley, the best 
of our native draughtsmen, a man fully imbued with the picturesqueness and nation 
ality of the country, whose keen eye notes the type of the red man, the sky, and 
foliage of the American prairie, the shape of the lithe antelope, the heavy bear, who feels 
the spirit of the scenes described, in whose drawings you will find no anachronisms. 
Darley contributes two illustrations to each of the thirty-two volumes which com 
pose this set. "VVe have seen some dozen or more of these spirited sketches, and can 
safely say that no more exquisite works of art have ever illustrated any work issued in 
this country, if in Europe. Nor is illustration all. The edition is faultless in type, 
printing, paper, and binding. Particularly we note the cloth binding of this edition as 
one of the neatest and most durable of its class. We have thus made especial mention 
of this enterprise on account of its magnitude, its artistic superiority, and its national 
importance, and we trust that it will be properly encouraged. 

The Gazette and Democrat, Reading, Pa. 

The paper, printing, pictorial embellishment, and binding of these volumes are so 
superior as to call forth the most unqualified praise of the press, both in this country 
and in England ; and, indeed, it may be safely said that no American books were ever 
issued which excel them in tasteful design and elegance of execution. They form an 
edition of Cooper s Writings eminently worthy of their distinguished author; and, 
indeed, the only one fit to grace the library. The new volumes contain " The Last of 
the Mohicans" and " The Spy," the illustrations to which are really splendid. The 
vignette to the latter, representing the escape of Harvey Birch, is a perfect gem. " The 
Spy" contains two of the best characters ever drawn by Cooper Harvey Birch, the 
Spy, and the grave but gallant gentleman, Mr. Harper, who eventually appears as 
Washington himself. Prefixed to this edition is the author s introduction, giving a 
history of the writing of the book, and the real incident which suggested it. 

Cincinnati Daily Gazette. 

COOPER S NOVELS, ILLUSTRATED. Messrs. Townsend & Co. s new edition of Cooper s 
Novels, with illustrations by the inimitable Darley, will prove a lasting benefit to the 
public, and we trust also to the publishers. 

Of the thirty-two volumes which will complete the series, three have already ap 
pearedviz.: "The Pioneers," " The Eed Eover," and "The Last of the Mohicans." 
They contain the author s final revisions, two steel engravings each, which, though 
executed with marvellous finish, still retain all the spirit of the designer, beside a largo 
number of tasteful vignettes. The typography is truly elegant, the paper soft-tinted^ 
smooth, and clear, the binding neat, strong, and appropriate. Altogether the edition 
promises to do honor to a writer who, with all his faults, deserves the name of the 
American Walter Scott. 

The price of the volumes is exceedingly reasonable, being but $1.50. Eobert Clarko 
& Co. are the Cincinnati agents for the sale of the series. 

The National Intelligencer, Washington, D. C. 

COOPER S NOVELS. We have before us several volumes of the above novels, and, on 
looking over them, have been so delighted that we cannot withstand the temptation to 
congratulate the public upon this latest magnificent issue from the New York press. 

The publishers have indeed done justice to the ever-fresh and ever-welcome crea. 
tions of J. Fenimore Cooper, our national author, the Walter Scott of America. He 
needs no encomium from us. The eagerness with which each generation of readers 
seizes upon his glowing and truthful portraitures proves the firm hold he has upon the 
public heart and fancy; but if by chance there is any one who has not followed the 
author in his graphic description of the varied adventures of those who " go down to 



14 COOPER S WORKS. 

the sea in ships," or who is not familiar with his inimitable scenes of the forest atd 
prairie, of the customs and every-day life of the red man, who is so surely passijg 
away, and will soon live only in Cooper s magic pages, this intellectual omission should 
be remedied at once by obtaining this beautiful set of novels, and, our word for it, he 
will not repent his bargain. To add to the charm of these works (if such be deemed 
possible), the services of Darley have been brought into requisition, a host in himself; 
and these illustrations are worthy of his fame as the first designer in our country, and 
not inferior, in the estimation of high English authority, to Eetsch himself. Many of 
our readers, we doubt not, have seen the evidences of his wonderful artistic conception 
and faithful expression in that remarkable book " Margaret," also in his etchings of 
" Eip Van Winkle," while Hood s " Bridge of Sighs" has also been exquisitely inter 
preted by his delicate and vivid pencil. 

Messrs. Townsend & Co. have brought out these books in a substantial form and 
beautiful finish, which may successfully compete with English and French editions 
de lua-e, and of which they may well be proud. Their intention is to publish a volume- 
monthly, each to contain a novel complete. Those which have already reached us are 
printed from perfectly-formed type, in crown octavo, on beautiful cream-tinted paper 
manufactured expressly for this edition, solidly and elegantly bound in cloth, stamped 
with designs new and appropriate to the subject-matter. 

The Vox, Populi, Lowell, Mass. 

There is a grateful flow of satisfaction in sitting down to notice a work that we know 
will warrant all we could desire to say in its favor. Of Cooper s Novels there is nothing 
to be said. Like Bunker Hill, and Lexington and Concord, " there they stand." They 
are a fixture in the hearts of the people and the literature of the world. It is the 
captivating style of the work that strikes us forcibly and favorably. This is to be an 
entirely new edition, published exclusively by subscription, at $1.50 a volume. One 
volume will be published every month, each containing a novel complete, a conveni 
ence to subscribers, to whom the payment will thus be made light and easy. They aro 
to be illustrated with designs on wood, and vignette drawings on steel, in line and 
etching, by F. 0. C. Darley. 

" TJie States," Washington, D. C. 

SPLENDID ILLUSTRATED EDITION OF COOPEB S NOVELS. It is a desideratum to wit 
ness the perfection to which the publishers have attained in the display of this work ( 
and it may compare most favorably with the productions of the English press. The 
paper is unusually fine and heavy, type distinct and good size, and binding such as will 
prove an heir-loom for several generations, as it appears adapted " not for a day, but 
for all time." 

The price is low $1.50 per volume considering the beauty of the work, illustrated 
as the thirty-two volumes will be, each with two large designs, the work comprising, 
in all, 500 original drawings by Darley, who stands at the head of his profession. No 
library should be viewed as complete not comprising Cooper s works, if the proprietor 
designs having one on general literature, as Cooper is identified in his works with 
both modern and ancient countries. No edition that we have yet seen reflects so much 
credit on publishers ; and we hope this is but the commencement of a new era in 
solid, substantial binding made to last. 

The Newburgh (N. Y.) Daily News. 

COOPER S WORKS. It was no light advantage to the cause of American literature 
that at its very outset it was lifted far beyond the level of mediocrity, in the depart 
ment of historical fiction, by the genius of Cooper. And this advantage has not been 
confined even to the circle of letters, wide and genial as its influence is but the im 
press of the great novelist s creations has stamped itself upon our nationality, and 
made it instinct with the fresh and vivid beauty of the soil. What Shakspeare was to 



OPINIONS OF THE PRESS. 15 

tlio older civilization of England and Scott to the Mountain homes of Scotland what 
Beranger is to the bourgeoise of France, that Cooper is to America. "We would not 
be understood by this to place the American author on a par with Shakspeare ; but 
that in taking up and giving immortal shape and life to the genius of the times as they 
ttjere, and not as they may be, and for rendering us affectionately familiar with the 
scenic grandeurs of our land as they will be forever, Cooper must occupy a foremost 
rank in our literature while its language endures. He does, it is true, color somewhat 
too highly his Indian heroes ; though it must be remembered that we are not familiar 
with the Indian character as he was; but his descriptions of American scenery are 
true to the life. Who, for instance, can read his Spy, and not feel deeper interest in 
our Eevolutionary war, as well as a better appreciation of the scenery of our own 
river. 

We have all read Cooper, and hardly need any eulogy to quicken our admiration of 
his genius the zest with which each generation peruses his volumes needs no sug 
gestions from the critic. But we have been led into these remarks by the publication 
of an edition of his works illustrated by Darley. This is indeed a happy combination 
the masterly touches of Darley s weird-like, yet truthful pencil, will give new 
developments of beauty to the creations of the novelist. No writer opens a wider or 
nobler field to the artist s pencil ; and few, if any, have found a more truthful de 
lineator. .... We are indebted for this felicitous union of artistic and literary 
excellence to Townsend & Co., publishers, of New York, who are bringing out a beau 
tiful edition in handsome volumes on the best paper, and with the clearest type. The 
designs are engraved on steel in line and etching bringing out the beauty of the 
original. The binding is worthy of the work, and the whole will make this the finest 
and most complete edition of the great novelist yet published. The price is only $1.50 
per volume one of which is issued every month, containing a complete novel. 

The Toledo (Ohio) Herald. 

MOHICANS. It is nearly a quarter of a century since James Fenimoro Cooper wrote 
his story entitled " The Last of the Mohicans," and we venture to say that no work of 
the kind ever published has met with more popular favor amongst the truly intelligent 
portion of the community than this. Tet, considering the long lapse of time since 
the first editions of the work were issued, and the improvements and inventions 
which have been made in printing, engraving, binding, and book-making generally, it 
is quite time that some patriotic and enterprising American publisher should give us^ 
for our libraries, an edition of Cooper s Novels, gotten up in all the elegance of our 
day. And it is with great pleasure that we notice the volumes just published by 
W. A. Townsend & Co., of New Yo; - k. We congratulate that firm upon their success 
in introducing an edition of Cooper s works which compares, in typography and finish, 
with the substance and beauty of the text. 

The Utica (N~. F.) Observer. 

THE SPY. This is one of the earliest and best of those pre-eminent American his 
torical romances, which have gained a celebrity scarcely inferior to those of Sir Walter 
Scott. The scene of the story is the neutral ground in the south-eastern section of 
this state, in Westchester county, where neither the Americans nor British held com 
plete sovereignty. The hero of the story is one of those sui generis characters who 
are content to submit to all sorts, and the worst misconception of motive and design? 
for the sake of advancing to the best of their abilities some cherished cause. " The 
Spy was, in reality, a patriot, as the sequel proved. He was employed by Washing 
ton, but often appeared to be an adherent of the British his purpose being to affect 
Tory principles in order the better and more surely to advance the object of the leader 
of the American armies. When, after the war. Congress put into the hands of a prom, 
inent statesman funds to amply reward the self-sacrificing services of the Spy, tho 
noble-hearted patriot refused to accept it, on the ground that he owed the country tha 



16 

services he gave her, and she was too poor to grant him the pecuniary recompense 
offered. This was a real incident, and the novelist has woven around it a tale of en 
chanting interest, written in the most elevated style, furnishing at once an entertain 
ing story of the Revolution and a literary model. The delineation of character is forc 
ible and truthful American youth will find in these stories of the past 

history of their country sources of true and unalloyed enjoyment, far bet er and more 
wholesome than the meretricious, superficial, dissipating fictions so prolific at the 
present day, and which cost their writers so little real thought and earnest labor. The 
family library which contains these volumes will possess a real treasure. 

The Philadelphia Bulletin. 

A SPLENDID WOKK. It was quite time that the illustrious novelist, Cooper, should 
receive the honor of a splendid edition, and we are pleased to see that "W. A. Towns- 
end & Co., of New York, are issuing a truly magnificent one, which adds to all the 
attractions of exquisite type, paper, and binding, those of five, hundred original de 
signs by Darley, executed on steel and wood, in the costliest style, by the most emi 
nent engravers in the country. The publishers have, in fact, begun this series with 
the determination of issuing an edition which shall excel in elegance any collection of 
works ever before given in this country. There have been more expensive and showy 
single volumes published here, but no series of volumes equal to these. 

This series is doubly interesting from the fact that it is illustrated by Darley. 
Retsch was not more appropriately the artist of Goethe than is Darley that of our 
great American novelist. This has long been understood and anticipated, since all of 
Darley s works point in this direction. The London Athenaum, in calling on Darley 
to illustrate Cooper, once said : " "We shall then enter upon a new region of art, as 
dramatic, picturesque, and vivid as any artist lover has had the pleasure of first at 
tempting." 

"We have before us the "Spy," "Pioneers," "Mohican," and "Red Rover," and, 
turning over their beautiful, tinted pages, we feel that the work is truly the most ap 
propriate monument of genius. The introductory illustrations and the vignettes are 
in the very spirit and life of the incidents ; nothing could correspond more perfectly 
to the impressions formed of all the varied, motley, strange company who pass through 
the deeply-stirring scenes of truly American life. There are to be thirty-two volumes 
in all, containing the latest corrections of the author, and, in fact, rendered as perfect 
as possible in every respect, whether literary, mechanical, or artistic. 

The Century, New York 

The new illustrated edition by Townsend & Co. of the Novels of Cooper is receiving 
*he attention to which its merits fully entitle it. It appears simultaneously with a 
new English illustrated reprint of the Waverley Novels, to which the series bears a 
parallel name and fame. The American publishers were already in possession of a set 
of stereotype plates of the works of Cooper, which they have laid aside to give place 
to this.inore elegant edition. In typographical excellence it leaves nothing to be de 
sired. The engagement of Mr. Darley as its illustrator has added greatly to its 
value. The variety of subject, rural, Indian, military, naval life, gives the best oppor 
tunities to his pencil, which has acquired a distinguished reputation in all these de 
partments. The wood-cut vignettes are also very happy in design. A volume of this 
publication appears monthly, at a very reasonable price. 

The New York Day Book. 

JAMES FENIMORB COOPEK. No American writer has achieved so world-wide a pop. 
ularity as he whose name stands at the head of this article ; none has been at once so 
much admired at home and so generally read abroad. Indeed, his reputation is even 
greater in Europe than in America. His works have been republished again and again, 
in half a dozen of the capitals of the civilized world, have been translated into half a 



OPINIONS OF THE PRESS. 17 

dozen languages, and great Parisian critics have not hesitated to rank Cooper along 
side of Walter Scott. Many causes combined to procure for him this enviable fame. 
Of course the greatest was his genius, but peculiarities of his character assisted in 
making this greatness. His genius and his character were both essentially American: 
he chose for his themes the deck of the American frigate, the life of tlio American 
sailor, or the paths of the American forest, and the strife between the American In 
dian and the American pioneer. The very names of the novels indicate the intense 
nationality of his mind. And this nationality not only, as it should have done, en 
dears him to those with whom he shared it, and not only was a claim, gladly recognized, 
upon the consideration of his countrymen, but won for him the appreciation of others. 
.... Messrs. W. A. Townsend & Co., of New York, are engaged in the publication 
of a complete edition of Cooper s works, which is designed to be in every way worthy 
of the great American novelist. The spirit in which it has been begun is a worthy 
tribute to his literary excellence Three are already before us, "The Pio 
neers," "The Eed Eovcr," and "The last of the Mohicans. They are gotten up in 
the most admirable style of the publisher s art. The paper, binding, printing, are all 
of the first class; the size is convenient, and the whole appearance of the book ele 
gant. .... No previous edition of Cooper s works is at all comparable with this 
of which we speak. 

The Knickerbocker Magazine,. 

W. A. Townsend & Co. s edition of Cooper s Novels is attracting the attention, and 
securing the wide popularity which we predicted for it some months since, while the 
great enterprise was as yet almost in embryo ; but the materials to be employed and 
the superb original illustrations, indicated with sufficient plainness what the public 
had good reason to expect. Nor will public expectation in any degree be disappointed. 
The pioneer of the series was " The Pioneers," which has been succeeded by " The Eed 
Eover," and " Last of the Mohicans." It would be idle, at this late day, to speak of 
the character of these or other kindred w r orks, which have made Cooper s name and 
literary fame known not only "wherever the English language is read and spoken," 
but as well where many oilier languages are read and spoken. Hence, it remains only 
to be stated, that in the conception ajid execution of the engravings by Darley, who 
has the rare faculty of entering into the very spirit of his author; in the firm 
and beautiful paper, made expressly for this edition ; in the clear and elegant typo 
graphical execution ; and in that rich and tasteful binding of the volume, there is 
nothing left to desire, save the ability to purchase them ; and this, fortunately, the 
publishers place within the easy reach of all good book-buyers. 

TJie New York Tribune. 

THE SPY. The unrivalled illustrations of this edition by Mr. Darley, give each 
successive volume a new interest as it issues from the press. The artist has caught 
the very spirit of the author in his characteristic designs, which are reproduced with 
excellent effect by the skill of the engraver. In every respect, this beautiful library 
edition deserves to bo in the hands of the admirers of Fcnituore Cooper. 

The Independent, N&io York. 

COOPKK S NOVELS. Messrs. "W. A. Townsend & Co., of this city, are publishing a 
beautiful edition of Cooper s novels, large duodecimo, printed in fair type upon sub 
stantial paper, and illustrated with steel and wood engravings by the first artists. 
"Eed Eover," the first of the series, is illustrated in a spirited manner, by Darley, 
whose skill is not surpassed by any European artist. The works of Fenimore Cooper 
are as fresh to-day as when first they fired our youthful imagination with the stirring 
scenes of border life, and the braveries and perils of the sea. The American novelist 
still remains without a peer in that department of fiction which his genius so bril 
liantly illustrated; and he will be read -always, wo hope, with that moderation which 
should control our reading of fiction so long as American literature shall have a name. 
This attractive edition will greatly enlarge Uio circle of Cooper s readers and admirers. 



18 COOPER S WORKS. 

The, Pittsburgh Gazette. 

TIIE SPY. This is the fourth volume of the uniform edition of Cooper s Works now 
in course of publication by Townsend & Co., of New York. We have before referred 
to the enterprising spirit manifested in getting out this superb edition, and take occa 
sion again to recommend it In the beauty of its typography it is unequalled, while 
the illustrations are of the first order, and the binding most substantial, rendering it 
the handsomest library edition of any work ever issued in the United State^. 

"The Spy" was one of the most popular of Cooper s novels, at the time of its issue, 
and deservedly retains its popularity. It is a thrilling romance, worthy of the en 
larged fame of the author. We hope to see this edition attain a wide popularity. 

The Daily Advertiser, Detroit. 

"Tire SPY." Messrs. Townsend & Co., of New York, who are issuing Cooper s 
novels in a style far superior to any with which they have ever before been clothed, 
have just published the fourth volume of their admirable series. It is "The Spy," 
one of the best of the charming works which made their author famous. Like the 
volumes which preceded it, it is clearly and elegantly printed on beautiful paper, and 
its illustrations are by that prince of artists, F. 6. C. Darley. The publishers attempt 
ed a great enterprise in publishing the productions of the great American novelist in 
this superb style, and we are glad to learn that it is likely to prove successful. The 
subscriptions to this series are largely and constantly increasing, and promise to them 
a circulation which they richly deserve. 

The Daily inquirer, Cincinnati. 

We have received from Kobert Clarke & Co., No. 55 West Fourth-street, Cooper s 
" Spy," from the press of W. A. Townsend & Co., New York, with illustrations by 
Darley. What more could we add in the way of praise ? The first of American 
novelists, and the first of American designers. The letter-press of the book is beauti 
fully clear and perspicuous, and the tale itself was the most popular novel of the day 
in which it was issued, md its interest is as fresh now as ever. 

" The Press," Philadelphia. 

W. A. Townsend & Co., of New York, have published another volume (tho fourth) 
of their magnificent edition of the novels and romances of Fenirnore Cooper, with 
first-class engravings, on steel and wood, from original drawings by Darley, whom wo 
are proud to claim as a Philadelphian. Even the London Athenceum, always so diffi 
cult with American books, smiles grimly upon this superb edition of Cooper, and ad 
mits that in paper, binding, printing, and illustration, every thing has been done to 
make it worthy of the most liberal patronage. The new volume contains "The Spy," 
which was the first of Cooper s American novels. The illustrations are beautiful. 
The vignette (on steel) representing the escape of Harvey Birch, is a perfect gem. 
" The Spy " contains two of the best characters ever drawn by Cooper Harvey Birch, 
the Spy, and the grave but gallant gentleman, Mr. Harper, who eventually appears as 
Washington himself. Prefixed to this edition is the author s introduction, giving a 
history of the writing of the book, and the real incident which suggested it 

The Neio Orleans Daily Picayune. 

Wo are indebted to J. C. Morgan & Co., Booksellers, Exchange Place, next the 
Post Office, for three volumes of the new edition of Cooper s works, published by W. 
A. Townsend & Co., New York, .and illustrated by Darley. 

"Tha volumes are the " Pioneers," the "Red Rover," and the "Last of the Mohi 
cans." The illustrations from Dnrley s drawings are very beautiful indeed, whilst tho 
binding, printing, types, paper, and general style of the edition are exceedingly hand- 



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