The Mississippi bubble : a memoir of John Law

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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 wras 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, 5—10.)

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-
lion»for 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 Utoisa" 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 wrhich 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 thnsT" 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 po»™H 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 uEed 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
peared—viz.: "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 at»d
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 wrorks, 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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