A further important step in the development of the Bank was the establishment of branches in the five important centres—Lyons, La Rochelle, Tours, Orleans, and Amiens. Those towns, which enjoyed the privilege of local parliaments, such as Toulouse, Bordeaux, Rouen, Grenoble, Dijon and Metz, were carefully avoided by the Regent, who anticipated that the extension of the Bank to them might provoke unpleasant opposition. Other towns, again, where no provincial parliaments existed to consult, had otherwise displayed hostility to the Bank, and these also were not honoured by the presence of its branches. “Lisle, Marseilles, Nantz, Saint Malo, and Bayonne, were distinguished by this prudent exclusion.” At the same time it was decreed that where branches of the Bank existed specie should only be legal tender up to 600 livres, notes being necessary for amounts beyond that sum, and that gold and silver were on no account, unless by special permission of the Bank authorities, to be transmitted to such towns. By these restrictions it was hoped that specie as a medium of currency would fall into desuetude and notes alone become recognised for purposes of exchange. This hope was expressed in the decree of 22nd April, 1719, which authorised the issue of 100,000,000 additional notes. “These cannot be subject to any diminution, as the specie is, inasmuch as the circulation of the Bank bills is more useful to the subjects of his Majesty, than that of the specie of gold and silver, and that they deserve a particular protection, in preference to the coin made of materials brought from foreign countries.”
Before the close of the year, fresh issues were made to the extent of 900,000,000 livres; and on 21st December, silver and gold suffered further restriction as tender, the former being limited to ten livres and the latter to three hundred. The purpose of this was to force a paper currency, and as far as possible discourage the use of specie. By reducing to so low a limit the tender of gold and silver, a demand was created for the notes of the Bank, and very shortly the Bank had attracted to itself a large proportion of the coinage then in currency. People “ran there in crowds, conjuring and imploring the clerks to receive their specie, and thinking themselves happy when they succeeded. Upon which, a merry fellow wittily called out to those who were the most forward; ‘Don’t be afraid, gentlemen, that your money should remain on your hands; it shall all be taken from you.’”
The effect was to a large extent as the Regent had wished. Paper circulated with the greatest freedom, and the highly speculative mood in which the people indulged was productive of an appearance of peculiarly false prosperity. Money as represented in notes became exceedingly abundant because of the manner in which it was distributed. Everyone spent with a lavish hand, regardless of the possibility of Law’s schemes receiving a sudden and unexpected check, thus bringing about a dislocation of the supply of money. Luxuries became necessaries, and domestic life displayed the grossest degrees of unbridled extravagance. To supply the great demand for rich cloths, costly furniture, and all the various luxuries which only find a ready market when prosperity spreads over a whole community, new industries arose throughout the country, and labour not only became scarce but was able to command in some cases four times its previous value. A taste arose too for works of art, and the best of the continent was sent into France where fabulous prices were obtained with a readiness proportionate to the ease with which the fortunes of the investors were made. Duhautchamp, in his History of the Scheme, gives several instances of this extravagance on the part of the nouveaux riches. Of one he says that, “He carried his magnificence so far, that most of the deeds related of him appear fabulous. His hotel in Paris, his gardens, his furniture, his equipage, the number of his servants of all degrees and professions, equalled those of the greatest princes. A certain jeweller declares that he supplied him with more than three millions worth of precious stones, without reckoning the beautiful diamond of the Count de Nocé, for which he paid 500,000 livres, and a girdle buckle which a Jew sold him for the same sum. With regard to his furniture, being a connoisseur of good taste, he had selected the whole so well, that, to form an idea of the magnificence of his apartments, we must have recourse to descriptions which are used of fairy palaces. Not content with 4000 marcs of silver and silver gilt service which he had first ordered, he found means to carry off from the jeweller’s that which had been made for the King of Portugal, under pretext that the agents of that prince had been wanting in punctuality of payment. Besides this magnificent table service, he furnished himself with stands, mirrors, braziers, orange-tree cases, flower pots, &c. Lastly all his cooking utensils were of silver. As for his upholstery, he took everything which could be imagined of that kind that was most precious. He had no less than eighty horses in his stables—his equipages equalled in number those of the grand Sultan. The number of his servants was nearly ninety, amongst whom were comprised intendant, secretaries, steward, surgeon, valets de chambre, upholsterers, four young ladies as chamber maids, and for his grooms four footmen of birth very superior to that of their master. Even when he went to dine away from home, he had his own table served as sumptuously as if he were present. It was served with everything most exquisite, principally during the year 1720. He was supplied with young peas which had cost 100 pistoles the pint. Nothing was wanting that the most voluptuous gourmet could think of. The desserts that were served were fitted to surprise the most expert mechanicians. Large fruits, which would have deceived the eyes of the most clear sighted, were so artistically contrived that when anyone, surprised at seeing a beautiful melon in winter, attempted to touch it, he caused a number of little fountains to spring up of different sorts of spirituous liquors which delighted the sense of smell, whilst the master of the house, pressing his foot on a concealed spring, made an artificial figure walk round the table and pour out nectar to the ladies, before whom he was made to stop. In a word I doubt whether the famous feasts of Antony and Augusta, so vaunted in history, had anything more rare than those which our fortunate millionaire took a pleasure in giving.”
CHAPTER VII
Hotel Mazarin acquired as office of Company and of Bank.—Excitement of crowds in the Rue Vivienne and the Rue Quincampoix.—Curious sources of fortune.—Instances of enormous fortunes acquired by members of the nobility.—Enormous influx of foreign speculators into Paris.
In order that the Company and the Bank might be housed in a style of magnificence befitting the brilliance of their careers, the Hotel Mazarin had been purchased at a cost of one million livres. Both were now under one roof, and Law was thus enabled to devote himself, with greater ease and less inconvenience, to their management. This was all the more necessary since the Bank and the Company, although nominally distinct and separate undertakings carrying on different classes of business, were yet in reality part and parcel of the same system, engaged in accomplishing the same ultimate objects and working in co-operation in all their transactions. Of both, Law was the controlling spirit. The Bank, now the property of the Crown, was placed entirely under the management of its founder upon whom no restrictions were laid, and the Company although under the directorate of thirty proprietors was equally in his hands. Their will was invariably his wish, and in everything they yielded with ready compliance to the suggestions of the great financial genius.
While the Hotel Mazarin was the centre from which the fuel for the prevailing excitement was distributed, its intensity was only really felt and displayed in another quarter. When the day of issue of shares arrived, the Rue Vivienne in which the Company’s offices were situated, and all the adjoining streets and squares, were crowded by speculators of all degrees. Unseemly rushes took place amongst the throng. Each one regarded his neighbour as a rival for the possession of the coveted scrip, and crushed and jostled himself though the crowd towards the enchanted building so that he might be amongst the first to enter when its doors were opened to hand over the shares to successful applicants. Lemontey compared them to a phalanx which “advanced for several days and nights towards the Exchange office, like a compact column, which neither sleep, hunger, nor thirst could destroy. But at the fatal cry which announced the delivery of the last share, the whole vanished at once.” So great was the number of applicants that on several occasions considerable difficulty and delay were experienced in compiling the lists of allottees. Public patience at these times was thoroughly exhausted, and gave way to frantic disorder and not infrequently to scenes of violence. The aristocracy, in order that they might not be compelled to mix with the crowds on the street in their patient wait to know the result of their efforts to secure allotment, rented rooms and houses in the Rue Vivienne, and so great was the demand for accommodation that fortunate proprietors were in a position to charge the most exorbitant rates.
The excitement and frenzy however reached its highest point in the Rue Quincampoix. Here was the Stock Exchange of the day. A short narrow street of fifty yards in length and two or three in breadth, it ran from the Rue aux Ours to the Rue Aubry-le-Boucher, and contained the offices and houses of the bankers of the period. So confined was it that the crowds of speculators entirely blocked it as a thoroughfare, and drivers were prohibited from making use of it. Gates were erected at each end, and guards with drums were stationed to inform people when the street was opened or closed for business. Other restrictions were imposed upon the use of the street. The entrance by the Rue Aubry-le-Boucher was reserved for members of the aristocracy, and that by the Rue aux Ours for all others, but inside the gates no distinction of rank was respected. On Sundays and fête days the street was closed altogether, and in order that business might not proceed to hours which would disturb the rest of those who resided in the neighbourhood the guards were ordered to clear the speculators from the street at a reasonable hour in the evening.