About the commencement of the new year, 1720, the system of Law approached its end. If he had been content with his bank his bank within wise and proper limits—the money of the realm might have been doubled, and an extreme facility afforded to commerce and to private enterprise, because, the establishment always being prepared to meet its liabilities, the notes it issued would have been as good as ready money, and sometimes even preferable, on account of the facility of transport. It must be admitted, however, as I declared to M. le Duc d’Orleans in his cabinet, and as I openly said in the Council of the Regency when the bank passed there, that good as this establishment might be in itself, it could only be so in a republic, or in a monarchy, like that of England, where the finances are absolutely governed by those who furnish them, and who simply furnish as much or as little as they please; but in a trivial, changing, and more than absolute state like France solidity necessarily is wanting, consequently confidence (at least of a discreet and proper kind): since a king, and under his name, a mistress, a minister, favourites; still more, extreme necessities, such as the deceased King experienced in the years 1707-8-9 and 10,—a hundred things, in fact, could overthrow the bank, the allurements of which were, at once, too great and too easy. But to add to the reality of this bank, the chimera of the Mississippi, with its shares, its special jargon, its science (a continual juggle for drawing money from one person to give it to another), was to almost guarantee that these shares should at last end in smoke (since we had neither mines, nor quarries of the philosopher’s stone), and that the few would be enriched at the expense of the many, as in fact happened.
What hastened the fall of the bank, and of the system, was the inconceivable prodigality of M. le Duc d’Orleans, who, without bounds, and worse still, if it can be, without choice, could not resist the importunities even of those whom he knew, beyond all doubt, to have been the most opposed to him, and who were completely despicable, but gave with open hands; and more frequently allowed money to be drawn from him by people who laughed at him, and who were grateful only to their effrontery. People with difficulty believe what they have seen; and posterity will consider as a fable what we ourselves look upon as a dream. At last, so much was given to a greedy and prodigal nation, always covetous and in want on account of its luxury, its disorder, and its confusion of ranks, that paper became scarce, and the mills could not furnish enough.
It may be imagined by this, what abuse had been made of a bank, established as a resource always ready, but which could not exist as such without being always delicately adjusted; and above all, kept in a state to meet the obligations it had contracted. I obtained information on this point from Law, when he came to me on Tuesday mornings; for a long time he played with me before admitting his embarrassments, and complained modestly and timidly, that the Regent was ruining everything by his extravagance. I knew from outsiders more than he thought, and it was this that induced me to press him upon his balance-sheet. In admitting to me, at last, although faintly, what he could no longer hide, he assured me he should not be wanting in resources provided M. le Duc d’Orleans left him free. That did not persuade me. Soon after, the notes began to lose favour; then to fall into discredit, and the discredit to become public. Then came the necessity to sustain them by force, since they could no longer be sustained by industry; and the moment force showed itself every one felt that all was over. Coercive authority was resorted to; the use of gold, silver, and jewels was suppressed (I speak of coined money); it was pretended that since the time of Abraham,—Abraham, who paid ready money for the sepulchre of Sarah,—all the civilised nations in the world had been in the greatest error and under the grossest delusion, respecting money and the metals it is made of; that paper alone was useful and necessary; that we could not do greater harm to our neighbours—jealous of our greatness and of our advantages—than to send to them all our money and all our jewels; and this idea was in no way concealed, for the Indian Company was allowed to visit every house, even Royal houses, confiscate all the louis d’or, and the coins it could find there; and to leave only pieces of twenty sous and under (to the amount of not more than 200 francs), for the odd money of bills, and in order to purchase necessary provisions of a minor kind, with prohibitions, strengthened by heavy punishment, against keeping more; so that everybody was obliged to take all the ready money he possessed to the bank, for fear of its being discovered by a valet. But nobody, as may be imagined, was persuaded of the justice of the power accorded to the Company, and accordingly authority was more and more exerted; all private houses were searched, informations were laid against people in order that no money might be kept back, or if it were, that the guilty parties might be severely punished.
Never before had sovereign power been so violently exercised, never had it attacked in such a manner the temporal interests of the community. Therefore was it by a prodigy, rather than by any effort or act of the government, that these terribly new ordonnances failed to produce the saddest and most complete revolutions; but there was not even talk of them; and although there were so many millions of people, either absolutely ruined or dying of hunger, and of the direst want, without means to procure their daily subsistence, nothing more than complaints and groans was heard.
This violence was, however, too excessive, and in every respect too indefensible to last long; new paper and new juggling tricks were of necessity resorted to; the latter were known to be such—people felt them to be such—but they submitted to them rather than not have twenty crowns in safety in their houses; and a greater violence made people suffer the smaller. Hence so many projects, so many different faces in finance, and all tending to establish one issue of paper upon another; that is to say, always causing loss to the holders of the different paper (everybody being obliged to hold it), and the universal multitude. This is what occupied all the rest of the government, and of the life of M. le Duc d’Orleans; which drove Law out of the realm; which increased six-fold the price of all merchandise, all food even the commonest; which ruinously augmented every kind of wages, and ruined public and private commerce; which gave, at the expense of the public, sudden riches to a few noblemen who dissipated it, and were all the poorer in a short time; which enabled many financiers’ clerks, and the lowest dregs of the people, profiting by the general confusion, to take advantage of the Mississippi, and make enormous fortunes; which occupied the government several years after the death of M. le Duc d’Orleans; and which, to conclude, France never will recover from, although it may be true that the value of land is considerably augmented. As a last affliction, the all-powerful, especially the princes and princesses of the blood, who had been mixed up, in the Mississippi, and who had used all their authority to escape from it without loss, re-established it upon what they called the Great Western Company, which with the same juggles and exclusive trade with the Indies, is completing the annihilation of the trade of the realm, sacrificed to the enormous interest of a small number of private individuals, whose hatred and vengeance the government has not dared to draw upon itself by attacking their delicate privileges.
Several violent executions, and confiscations of considerable sums found in the houses searched, took place. A certain Adine, employed at the bank, had 10,000 crowns confiscated, was fined 10,000 francs, and lost his appointment. Many people hid their money with so much secrecy, that, dying without being able to say where they had put it, these little treasures remained buried and lost to the heirs.
In the midst of the embarrassments of the finances, and in spite of them, M. le Duc d’Orleans continued his prodigal gifts. He attached pensions of 6000 livres and 4000 livres to the grades of lieutenant-general and camp-marshal. He gave a pension of 20,000 livres to old Montauban; one of 6000 livres to M. de Montauban (younger brother of the Prince de Guemene); and one of 6000 livres to the Duchesse de Brissac. To several other people he gave pensions of 4000 livres; to eight or ten others, 3000 or 2000 livres. I obtained one of 8000 livres for Madame Marechal de Lorges; and one of 6000 livres was given to the Marechal de Chamilly, whose affairs were much deranged by the Mississippi. M. de Soubise and the Marquis Noailles had each upwards of 200,000 livres. Even Saint- Genies, just out of the Bastille, and banished to Beauvais, had a pension of 1000. Everybody in truth wanted an augmentation of income, on account of the extreme high price to which the commonest, almost necessary things had risen, and even all other things; which, although at last diminshed by degrees, remain to this day much dearer than they were before the Mississippi.
The pensions being given away, M. le Duc d’Orleans began to think how he could reduce the public expenditure. Persuaded by those in whose financial knowledge he had most confidence, he resolved to reduce to two per cent. the interest upon all the funds. This much relieved those who paid, but terribly cut down the income of those who received, that is to say, the creditors of the state, who had lent their money at five per cent., according to the loan—and, public faith and usage, and who had hitherto peacefully enjoyed that interest. M. le Duc d’Orleans assembled at the Palais Royal several financiers of different rank, and resolved with them to pass this edict. It made much stir among the Parliament men, who refused to register it. But M. le Duc d’Orleans would not change his determination, and maintained his decree in spite of them.
By dint of turning and turning around the Mississippi, not to say of juggling with it, the desire came to establish, according to the example of the English, colonies in the vast countries beyond the seas. In order to people these colonies, persons without means of livelihood, sturdy beggars, female and male, and a quantity of public creatures were carried off. If this had been executed with discretion and discernment, with the necessary measures and precautions, it would have ensured the object proposed, and relieved Paris and the provinces of a heavy, useless, and often dangerous burthen; but in Paris and elsewhere so much violence, and even more roguery, were mixed up with it, that great murmuring was excited. Not the slightest care had been taken to provide for the subsistence of so many unfortunate people, either while in the place they were to embark from, or while on the road to reach it; by night they were shut up, with nothing to eat, in barns, or in the dry ditches of the towns they stopped in, all means of egress being forbidden them. They uttered cries which excited pity and indignation; but the alms collected for them not being sufficient, still less the little their conductors gave them, they everywhere died in frightful numbers.
This inhumanity, joined to the barbarity of the conductors, to violence of a kind unknown until this, and to the rascality of carrying off people who were not of the prescribed quality, but whom others thus got rid of by whispering a word in the ear of the conductors and greasing their palms; all these things, I say, caused so much stir, so much excitement, that the system, it was found, could not be kept up. Some troops had been embarked, and during the voyage were not treated much better than the others. The persons already collected were set at liberty, allowed to do what they pleased, and no more were seized. Law, regarded as the author of these seizures, became much detested, and M. le Duc d’Orleans repented having ever fallen in with the scheme.
The 22nd of May of this year, 1720, became celebrated by the publication of a decree of the Council of State, concerning the shares of the Company of the Indies (the same as that known under the name of Mississippi) and the notes of Law’s bank. This decree diminished by degrees, and from month to month, the value of the shares and the notes, so that, by the end of the year, that value would have been reduced one-half.
This, in the language of finance and of bankruptcy, was to turn tail with a vengeance: and its effect, while remedying nothing, was to make people believe that things were in a worse state than was actually the case. Argenson, who, as we have seen, had been turned out of the finances to make room for Law, was generally accused of suggesting this decree out of malice, already foreseeing all the evils that must arise from it. The uproar was general and frightful. There was not a rich person who did not believe himself lost without resource; not a poor one who did not see himself reduced to beggary. The Parliament, so opposed to the new money system, did not let slip this fine opportunity. It rendered itself the protector of the public by refusing to register the decree, and by promptly uttering the strongest remonstrance against it. The public even believed that to the Parliament was due the sudden revocation of the edict, which, however, was simply caused by the universal complaining, and the tardy discovery of the fault committed in passing it. The little confidence in Law remaining was now radically extinguished; not an atom of it could ever be set afloat again. Seditious writings and analytical and reasonable pamphlets rained on all sides, and the consternation was general.
The Parliament assembled on Monday, the 27th of May, in the morning, and named certain of its members to go to M. le Duc d’Orleans, with remonstrances against the decree. About noon of the same day, M. le Duc d’Orleans sent La Vrilliere to say to the Parliament that he revoked that decree, and that the notes would remain as before. La Vrilliere, finding that the Parliament had adjourned, went to the Chief-President, to say with what he was charged. After dinner the Parliamentary deputies came to the Palais Royal, where they were well received; M. le Duc d’Orleans confirmed what they had already heard from La Vrilliere, and said to them that he would re-establish the funds of the Hotel de Ville at two-and-a- half percent. The deputies expected that in justice and in goodness he ought to raise them to at least three per cent. M. le Duc d’Orleans answered, that he should like not only to raise them to three, but to four, nay, five per cent.; but that the state of affairs would not permit him to go beyond two-and-a-half. On the next day was published the counter-decree, which placed the shares and actions as they were before the 22nd of May. The decree of that date was therefore revoked in six days, after having caused such a strange effect.
On Wednesday, the 29th, a pretty little comedy was played. Le Blanc, Secretary of State, went to Law, told him that M. le Duc d’Orleans discharged him from his office as comptroller-general of the finances, thanked him for the attention he had given to it, and announced that as many people in Paris did not like him, a meritorious officer should keep guard in his house to prevent any accident that might happen to him. At the same time, Benzualde, major of the regiment of Swiss guards, arrived with sixteen of his men to remain night and day in Law’s house.
The Scotchman did not in the least expect this dismissal or this guard, but he appeared very tranquil respecting both, and maintained his usual coolness. The next day he was taken by the Duc de la Force to the Palais Royal. Then comedy number two was played. M. le Duc d’Orleans refused to see the financier, who went away without an interview. On the day after, however, Law was admitted by the back stairs, closeted with the Regent, and was treated by him as well as ever. The comedies were over.
On Sunday, the 2nd of June, Benzualde and his Swiss withdrew from Law’s house. Stock-jobbing was banished at the same time from the Rue Quincampoix, and established in the Place Vendome. In this latter place there was more room for it. The passers-by were not incommoded. Yet some people did not find it as convenient as the other. At this time the King gave up to the bank one hundred million of shares he had in it.
On the 5th July, a decree of the Council was issued, prohibiting people from possessing jewels, from keeping them locked up, or from selling them to foreigners. It may be imagined what a commotion ensued. This decree was grafted upon a number of others, the object of all, too visibly, being to seize upon all coin, in favour of the discredited paper, in which nobody could any longer have the slightest confidence. In vain M. le Duc d’Orleans, M. le Duc, and his mother, tried to persuade others, by getting rid of their immense stores of jewels, that is to say, by sending them abroad on a journey—nothing more: not a person was duped by this example; not a person omitted to conceal his jewels very carefully: a thing much more easy to accomplish than the concealment of gold or silver coin, on account of the smaller value of precious stones. This jewellery eclipse was not of long duration.
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