That Law did not merely use the great power and influence he had acquired in the government of France for the purpose of promoting his own financial schemes and his own personal advantage is evident from the radical reforms he accomplished in the fiscal arrangements of that country. The principles upon which he based his fiscal policy were of the most advanced and enlightened character. They were liberal, and consequently had strict equality for their object. The system of taxation which prevailed not only showed many anomalies but lent itself to the grossest abuse. Monopolies of every description abounded. Officials swarmed throughout the country, and by their extortionate levies upon every branch of trade checked industrial progress in every direction. It is said that in Paris itself the number of officials equalled the number of people engaged in the various trades they were supposed to supervise in the interests of the nation. Free trading intercourse was also limited by the existence of a system of provincial protection which sought to prevent the goods of one province from entering, except under payment of prohibitive dues, the markets of another province.
Law was alive to the prejudicial effects of all these factors upon the industrial prosperity of the country, and also upon the general well-being of the people, and endeavoured as far as possible to remove or at least to modify them. His ideal was the adoption of a single tax to be levied in proportion to the wealth of the individual. Too many vested interests existed however for the accomplishment of so sweeping a reform, and he had to satisfy himself with measures more moderate in their sweep. It is a tribute to his fearlessness that during the winter of 1719–20 he introduced innumerable changes in the method and incidence of taxation, and that in spite of the overwhelming opposition of those who were thus deprived of continuing the old extortionate system to their own pecuniary gain. By wholesale modification of duties and charges, he succeeded in effecting substantial reductions in the price of such necessaries as grain, corn, coal, wood, butter, cheese, and eggs. Inland protective duties were abolished on all articles classed as necessaries or as raw material, and on one item of import—English coal—the tariff was removed for the benefit of French manufacturers, whom Law was most anxious to encourage.
But Law’s horizon was not bounded by the commercial and industrial interests of the country. He recognised the great part which education plays in the progress of a nation, and determined to give such facilities as would place the highest education within the reach of every one. He accordingly appropriated a twenty-eighth part of the postal revenue for the endowment of free education in the University of Paris. He thus conferred upon France a benefit of the most invaluable character, and by this measure alone merited the reputation of an enlightened and broad-minded statesman.
CHAPTER IX
Law’s designs against England’s political and industrial position.—Earl of Stair’s correspondence with Mr. Secretary Craggs.—Stair accused by Law of threatening the safety of the Bank.—Stair’s recall intimated.—Lord Stanhope sent to conciliate Law.—Threatened rupture between England and France over question of evacuation of Gibraltar.—Stair endeavours to justify his hostile attitude towards Law.—His apprehensions as to Law’s purpose in acquiring South Sea stock.—The humiliating nature of Stair’s dismissal.
The year 1720 was a momentous one in the history of the Mississippi Scheme. Its commencement was full of promise from many points of view. It witnessed the realisation of Law’s ambition to gather into his hands the reins of government in practically every department of the administration. It witnessed also the zenith of prosperity for all those gigantic schemes and undertakings which were to make France the great centre of trade and finance for the world. But the promise for the future which these circumstances seemed to contain was only of few months’ duration. Yet these few months saw Law the most striking and commanding figure of his time throughout Europe. We have already seen the position to which he had attained in the internal affairs of France itself; how the government of that country was practically under his control; and how by sheer energy and force of character he had extended his influence over every class of society. His fame however reached far beyond the confines of France. He was regarded as an international force by other nations. Not only was his system copied by other countries, but he was bent on following a line of foreign policy for France which threatened the political and industrial prospects of these countries, and caused them great alarm, temporary no doubt, probably foolish, but real while it lasted.
Law’s designs were chiefly directed against the power of England. The English government recognised this, and considered Law a person to be conciliated. Their attitude towards him was peculiarly weak, and led to the recall of the minister at the French court, the Earl of Stair. That minister on his arrival in Paris in 1715 had called upon Law, not only as a friend, but because he adjudged him even then as a man of great importance. Their friendship however was of short duration. It rapidly degenerated into merely formal intercourse, and then into active hostility. The latter stage was reached in 1719, when we find Lord Stair intriguing against Law in his attempt to displace Dubois, foreign minister of France, by Torcy, who would have been a more pliable instrument for the carrying out of his designs. Lord Stair’s letters to Mr. Secretary Craggs at this time are full of interest, and show the nature of the hostility between himself and Law, and the progress of their quarrel. On August 30th, 1719, he writes—“In a long conversation I had with the Abbé (Dubois) to-night, he seems apprehensive that Torcy gains ground, and that there may be a close connection betwixt Law and Torcy, with views to turn the Abbé out. I am afraid this apprehension of the Abbé is not without ground; but, however that may be, I am persuaded we shall quickly see this court take airs which will not be easy to bear; and I am not a little apprehensive that we shall very quickly see them come into measures that we shall have no reason to like. If this should be true, we must not, in my poor opinion, seem to take any notice of it; but at the same time, it will behove us to exert ourselves to find out ways, without loss of time, to get rid of the pressure of the public debts.”
A few days later Lord Stair had apparently concluded that he was powerless to stem the advance of Law’s influence, and writes accordingly—“Supposing I had talents, and that I were fitter to serve you at this court than another; you will be obliged to change your minister. You may depend on it, this court, with their fortune, will change their measures (i.e., their foreign policy); and they will desire to have a man here that they may be either able to gain or impose upon. You must henceforth look upon Law as the first minister, whose daily discourse is, that he will raise France to a greater height than ever she was, upon the ruin of England and Holland. You may easily imagine I shall not be a minister for his purpose. He is very much displeased with me already, because I did not flatter his vanity by putting in Mississippi. I did not think it became the King’s Ambassador to give countenance to such a thing, or an example to others to withdraw their effects from England, to put them into the stocks here; which would have been readily followed by many. I have been in the wrong to myself, to the value of thirty or forty thousand pounds, which I might very easily have gained if I had put myself, as others did, into Mr. Law’s hands; but I thought it was my duty, considering my position, not to do so.