CHAPTER V
Exaggerated accounts of resources of Louisiana.—Law’s judgment at fault—His ultimate aim.—He creates an artificial rise in the value of Company shares.—His unsuccessful efforts to gain influence over Saint-Simon.—Acquisition of Tobacco monopoly.—Absorption of other companies.—Reconstitution of West India Company.—Parliamentary opposition overcome.—“Mothers” and “Daughters”.—Excited speculation in shares.—Issue of notes to colonists.—A pioneer’s account of Louisiana.
Law was now free to direct his thoughts to the business of the bank and the development of his original ideas with reference to the West India Company. Although the latter had been established in August, 1717, nothing had yet been accomplished in the direction of actual business. The capital had been issued to an over-eager public, but unless a revenue were forthcoming the consequences would be grave for its originators. It was not sufficient that the flourish of trumpets with which he heralded the boundless possibilities of wealth of the vast and unknown territories of the Mississippi should die away with its last faint echoes. He must at once give evidence that the promises would bear fruit. The situation was difficult, but his ingenuity was equal to the task imposed upon him.
Since the establishment of the company, France had been deluged with books, pamphlets, engravings, and all kinds of advertisements and prospectuses descriptive of the extent and wealth of Louisiana. Exaggerated accounts were published of its riches, of its mineral resources, and of its people. One picture would exhibit mountains declared to be “full of gold, silver, copper, lead, and quicksilver. As these metals are very common, and the savages know nothing of their value, they exchange lumps of gold and silver for European manufactures, such as knives, cooking utensils, spindles, a small looking-glass, or even a little brandy.” Another, designed to invest the natives with a highly religious disposition, would show them performing humble obeisance to the priests, and have accompanying letterpress to the effect that “the idolatrous Indians earnestly pray that they may receive baptism. Great care is taken of the education of their children.”
Glittering accounts such as these appealed to the speculative instincts of everyone. All sorts and conditions of people sold their lands and purchased shares; ships were bought to carry intending emigrants; and transportation was substituted for all other penalties for criminals in order that a supply of manual labour might be furnished in opening up the newly acquired territories. Louisiana however was to prove a bitter disappointment to those who expected to find a country where hardships and difficulties were absent, where without trouble or labour fortunes were to be amassed in the shortest time, and where without stint the pleasures and luxuries of home could be enjoyed to the fullest.
The brilliant pictures that were drawn of the capacities of Louisiana were undoubtedly largely exaggerated so far as its condition was at the time. With the knowledge of subsequent years they were however substantially accurate, but the development of these capacities required the expenditure of vast sums of capital and the lapse of many years of hard and continuous labour of an imported population. The concessions made to the company on its incorporation were of enormous ultimate value, and under different conditions, conditions which would have imported fewer elements of speculation and introduced more administrative patience and moderation, might have proved a national asset of great importance instead of a disastrous enterprise the magnitude of which had the effect of paralysing for several generations the commercial and industrial stability of France. The concessions were co-extensive with virtual sovereignty over the vast territories included in the grant, and unlimited freedom of administration was conferred.
While it is evident that Law anticipated that Louisiana would in reality be a possession which would yield to his company a large annual revenue and prove an exceedingly profitable investment to its shareholders, it is equally evident that he recognised that this result could not be accomplished at once. He was probably mistaken as to the length of time that would be required, and, if so, he was only guilty of a fault of judgment attributable to the inadequacy of contemporary knowledge of these far distant lands as well as to the fact that experience of developing companies, such as the Western Company, was then in its extreme infancy. Until operations could proceed on a sufficiently extensive scale, the only immediate income derivable by the company consisted of the annuities payable by the Treasury, the amount of which was equivalent to interest at the rate of four per cent. upon the 100 million livres of State notes absorbed at the time of incorporation. From the fact that the first year’s annuities of four million livres were to be devoted to the general purposes of the company, and that the succeeding years’ annuities were to be placed to the dividend fund, it would seem that Law was under the impression that he could sufficiently develop the company’s territories within a year to admit of further drafts upon the treasury payments being unnecessary.
On the other hand, the Western Company was but one element in the ultimate scheme which Law was ambitious to attain. His aim was to embrace in one vast undertaking not only the whole foreign trade of France, but also the large revenue departments of the government, such as the mint, and the collection of the national taxation. To these would be added the Bank, the success of which, in its present form, was now assured and had inspired the confidence of French people and foreigners alike. With these under one control, and all working together with one definite purpose, national prosperity might be placed upon a sound practical basis, trade in general be fostered and guided along lines of greatest development, and the circulation of money be more ample by the issue of notes to the extent of the real or approximate value of the incorporated assets.