Lord Stair’s admiration of Law was very considerable, and so intimate was their friendship that we find the first entry in Stair’s Journal upon his arrival as British Ambassador in Paris in 1715 to be:—“Wednesday, January the 23rd, at night, arrived at Paris; saw nobody that night but Mr. Law.” Lord Stair’s strong recommendations of Law to the British Government were based upon his fixed belief that his services would be of incalculable value. Law, himself, however, was not by any means anxious that they should be accepted. He saw greater scope in France for his financial schemes, and therefore, while permitting these friendly negotiations to proceed, he was somewhat indifferent as to their result.
He did not abate, on the other hand, his assiduous cultivation of the Duc d’Orleans; nor did he fail to please Desmarets, who, as Comptroller-General was in such a position as likely to become a powerful support in carrying out his plans. His relations with the Comptroller-General were also strengthened by the representations made to him by the Regent to encourage Law as a man whose advice at that critical period might prove of the utmost value. By his diplomatic conduct Law succeeded in having his proposal for the establishment of a land-bank brought under discussion by the Council of Ministers. The result, however, was again unfavourable, the ground of rejection of the scheme, according to Stair’s Journal, being that there was no foundation for such a bank in a country where everything depended on the King’s pleasure.
CHAPTER III
Accession of Louis XV.—National debt of France.—Debasement of coinage.—Arraignment of tax collectors.—Council of Finances consider Law’s proposals unfavourably.—Petition for permission to establish private bank granted.—Constitution of the Bank.—Its Success.—The “Pitt” diamond and its purchase.
Louis XIV. died on 1st September, 1715, and was succeeded by his great-grandson Louis XV., then a mere boy of five years old. The Duc d’Orleans was called to the Regency, and wielded the power of an absolute monarch. He brought to his office the singular gifts of a statesman, and man of affairs, modified by the vices and indifference of a debauchée. The Duc de Saint-Simon speaks of the “range of his mind, of the greatness of his genius, and of his views, of his singular penetration, of the sagacity and address of his policy, of the fertility of his expedients and of his resources, of the dexterity of his conduct under all changes of circumstances and events, of his clearness in considering objects and combining things; of his superiority over his ministers, and over those that various powers sent to him; of the exquisite discernment he displayed in investigating affairs; of his learned ability in immediately replying to everything when he wished.” No doubt this high estimate is the eulogium of a courtier, and requires to be discounted to some extent, but, on the whole, with little modification it may be considered a fair representation of the abilities of the man who was about to place Law in practical command of the government of France.
One of the first, as it also was one of the most important and pressing, matters to which the Regent’s attention was demanded, was the financial condition of the country. The adoption of drastic measures was imperative. The national debt amounted to 3500 millions of livres, and while the revenue produced 145 millions, the expenditure of the Government absorbed 142 millions, leaving 3 millions with which to liquidate interest upon the national debt, or 1-10th per cent. A deficit of 150 to 200 millions was thus accumulating each year, and every resource which ingenuity could conceive having long ago been exhausted, the situation was daily becoming more difficult. The Regent, shortly after his accession, called a meeting of the Council for the purpose of devising a means of relieving the intolerable strain. National bankruptcy was suggested by a few of its members, notably the Duc de Saint-Simon. The Regent would give no ear to such a course, and waved the suggestion aside as alike dishonourable and disastrous to all possibility of good government. No one, however, seemed capable of offering any plan of permanent value. The schemes proposed were merely expedients promising temporary relief, and no other policy but one of despair being apparent at the moment, the Regent was eager for their immediate execution.
A commission or visa was appointed to investigate the nature of the national debt, and, by classifying the claims, to bring order out of chaos. By methods, in many instances more rigorous than just, the national debt was reduced by 1500 millions, and interest was made uniform at the rate of four per cent. Of the 2000 millions at which the debt now stood, 1750 millions were funded, and the balance of 250 millions was converted into a general floating debt represented by billets d’état. A substantial reduction was thus made in the amount of interest payable by the Treasury; but, without an increase of permanent revenue, which, if it were to be accomplished by the imposition of fresh taxation, neither the Regent nor his Councillors would face, or without a reduction in expenditure to an extent which would have rendered the public service inefficient, the solution of the financial difficulty was as distant as ever. Recourse was accordingly had to two measures, which served the purpose of the moment. The first was the old expedient of debasing the coinage. With the ostensible object of having a new currency with the new king’s effigy, the old coinage was recalled. The fresh issue, however, was depreciated in the process to the extent of about 30 per cent., and the Government profited by the transaction sufficient to liquidate one year’s interest of the National Debt. The second device for replenishing the Exchequer was the establishment of a Chamber of Justice, a kind of inquisition for the investigation of the conduct of the tax-collectors. These men by their unscrupulous dealings, had come to be regarded as the evil genii of the French peasantry. Like vampires, they had for years been sucking the very life-blood of the nation. No redress was open to their victims, and resistance only had the effect of increasing the burdens laid upon their shoulders. The institution of the Chamber of Justice was accordingly received with unbounded joy. Every tax-farmer was arraigned before this tribunal. The most searching investigation was made, not only into his own dealings, but also into the dealings of the hordes of satellites whom he employed to bleed his unfortunate victims. Where information was withheld, or even where it was suspected that the information given was tainted with inaccuracy, encouragement was given to informers by holding out promises of 20 per cent. of any fines that might be levied. Such a system, of course, was bound to bring evils in its train as great as those it was intended to remove. A reign of terror set in amongst the farmers-general. No sympathy was extended to them by their judges. All confidence in their honesty had long ago been destroyed. They were already prejudged. No effort on their part could by any possibility ward off the weight of accusation against them. Prison accommodation was soon taxed beyond its capacity. Those who were fortunate enough to escape this Jeddart justice by bribery, by payment of enormous fines, or by quietly submitting to wholesale confiscation, left the country as a measure of personal safety. The records of the period teem with the decisions of the Chamber of Justice and their consequences. Most of the cases reflect a degree of moral obliquity on the part of the judges not less than on the part of the accused. We are told of one instance where a contractor had been taxed, in proportion to his wealth and guilt, at the sum of twelve millions livres. A courtier, possessing considerable influence with the Government, offered to procure a remission of the fine for a bribe of one hundred thousand crowns. “You are too late, my friend,” replied the contractor, “I have already made a bargain with your wife for fifty thousand.” In the course of a few weeks almost the whole of the fraternity had run the gauntlet of the Chamber of Justice. They had been stript of their power, their influence and their possessions. The country had been effectively cleared of their presence, but to comparatively small advantage. The total fines and confiscations amounted to one hundred and eighty million livres, of which the Government received only one half, and its parasites the other. As a consequence, its career was brought to a close, and with it the ingenious financial devices of the Council of Ministers.
Law was an amused spectator of the puerile efforts of the Regent and his advisers to restore financial stability to their country. He regarded them no less with scorn, and probably rejoiced in the futility of their efforts, in the hope that each successive step they took would bring the realisation of his own ambition within measurable distance. The position he occupied, however, was one of difficulty, and demanded a display of considerable tact and judgment. He had educated the Regent up to the point of implicit confidence in his scheme, but there still remained a dead weight of opposition in the Council, and without the support of both the ground was very uncertain.