CHAPTER IV
Law’s notes become official tender.—The Mississippi Scheme projected.—Early explorers of Mississippi territory.—Establishment of the West India Company.—Its absorption of depreciated billets d’état.—D’Argenson appointed Chancellor of France, and attempts extinction of National Debt.—Law innocently involved in D’Argenson’s fatal scheme.—Saved from arrest by Regent.—The brothers Paris and an anti-system.
Less than one year’s operations were sufficient to disclose the superior value of Law’s Bank as an institution of national importance. Its remarkable success was not attributable to factitious or ephemeral circumstances, but to the confidence inspired by the soundness of the methods upon which its business was conducted. Law’s powerful grasp of financial principles, and his striking capacity for their practical application, were evidenced in the masterly manner that characterised his management at this period. If anything was wanting to its complete success, it was recognition by the Government of the Bank as the official channel for the national revenues to reach the Treasury. This came before the first year expired. On 10th April, 1717, the Council decreed that the tax collectors should treat Law’s notes as legal tender at their full face value. The effect of this, of course, was to extend the demand for so stable a medium of currency to districts as yet outside the sphere of the Bank’s operations. Law’s position was now one of the first magnitude. So far-reaching was his influence that the industrial welfare of France was bound up to a large extent with his fortunes, and would have been seriously menaced by its withdrawal. The stimulus of his activity was felt throughout the whole country, and secured for him the greatest authority and respect.
Law now considered himself in a position to develop another stage at least of his great scheme for the commercial regeneration of France. Not only was the moment opportune, but the principles he had been advocating in theory had operated so well in practice that he entertained no doubt that certain success would follow his new enterprise. Credit, and especially that phase of credit represented in paper currency, was capable, in his opinion, of unlimited expansion so long, at least, as there was an apparent foundation of security. With an available cash capital of only £75,000 he had been able to float and to give stability of value to 60,000,000 livres, or approximately £4,500,000. Why, therefore, not centralise the whole wealth of France and establish upon it a huge currency of notes, by means of which industrial growth and prosperity would be fostered?
Dominated by this one purpose, he projected his famous Mississippi scheme during the summer of 1717, a scheme which was at once to raise him to the highest pinnacle of fame and to prove his undoing.
LA SALLE,
The French Explorer of the Mississippi territory from 1676 to 1682.
France at this time possessed the vast American territories which are watered by the Mississippi. In 1674, Jolliat, who had been sent by the Count de Fontenac to discover if possible a passage through the Bay of California into the South Sea, came upon the great river, but did not attempt to explore it. This was accomplished by La Salle, one of the greatest French explorers of the American continent. He went out two years after Jolliat, and after many adventures and hardships, succeeded in navigating the Mississippi to its mouth, where he set up the French flag on 9th April, 1682, claiming the whole of the vast territory he had traversed for his native country. On making known his success to Louis XIV., he was furnished by that monarch with three ships and a man-of-war for the purpose of establishing a French colony in the region he had annexed, in order to establish the right of France to the newly-acquired territory. Unfortunately, La Salle was unable to again locate the mouth of the Mississippi, and, after several months of vain wanderings in quest of his destination, he was murdered by some of his followers, who had been exasperated by his ineffectual efforts, and goaded into revolt by his harsh and domineering disposition. D’Iberville, a French Canadian, who took up the task of exploration in succession to La Salle, enjoyed, however, greater success, and erected a French fort at the mouth of the river in 1712.