Old and New Paris: Its History, Its People, and Its Places, v. 1

by H. Sutherland Edwards

The Rue Quincampoix is for ever associated with the name of Law, a Scotch banker related to the Argyll family, and son of a goldsmith and banker who died at Venice in 1729.

Law (John Lauriston Law) was born at Edinburgh in 1671, and he is said at an early age to have studied assiduously the doctrine of chances, which he applied to games of hazard. Whether in virtue of his arithmetical combinations or of that luck which during a long course of years never deserted him, he won large sums of money at the gambling-table, after which he turned his attention to gambling on a wider scale: finance, that is to say. He was still in his twenty-fifth year when, as the result of a love affair, he fought a duel, for which he was sentenced to death. His punishment was commuted to that of imprisonment for life; but he succeeded in escaping, left England, and for some time travelled through the different states of Europe, playing everywhere with success, and proposing everywhere, but without success, a new system of public credit, due to his inexhaustible imagination.

The system would, according to its inventor, multiply one hundredfold the resources of the State by putting into circulation a quantity of paper money, based upon the revenue from taxes and Government property of all kinds, coin, according to Law, being insufficient for the requirements of a large nation. The Regent of Orleans, captivated by this brilliant scheme, saw in it the means of saving France, at the time (1716) threatened by national bankruptcy. He, in the first place, granted to Law the privilege of establishing a general bank with a capital of 6,000,000 francs, divided into 12,000 shares of 500 francs each, with a discount of 25 per cent. to anyone purchasing a thousand shares. The shares were readily taken and the bank proved a great success.

Then, in connection with the bank, Law started successively the Mississippi Company, the Senegal Company, the China Company, the French East India Company, and companies for coining the State money and farming the State revenue. Having now got into his hands all the sources of public income, he made over his bank to the State, and was himself appointed Controller-General of Finance. Instead, however, of helping commerce, Law’s creations merely stimulated the spirit of speculation; so that priests, nobles, merchants, shopkeepers, workmen, all began to gamble in stocks and shares. Intoxicated by his success, Law issued an excessive number of shares: “watering” them, according to the financial expression of the present day. In due time, notwithstanding all kinds of expedients (such as forced currency for the new paper money) to keep them at par, the shares lost value in the market, and soon fell to such a point that their depreciation caused a general panic. There was no class in which some, and, indeed, many of Law’s shareholders were not to be found; and ere long the inventor of the new system of credit became the object of so much public indignation that he went in danger of his life. There was a riot in the Palais Royal, and Law’s carriage was stopped by a band of infuriated persons in the public street. A man of great nerve and of commanding presence, Law looked from the carriage window and exclaimed in a haughty tone: “Back, you rabble!” (Arrière canaille!) on which his assailants retired. This method of appeasing the stormy waters was tried the next day with less success by Law’s coachman. His master was not inside the carriage. The vehicle, however, had been recognised, and the coachman found his progress impeded by an angry mob. “Back, you rabble!” he cried, in imitation of his master; when the mob, unwilling to receive from the servant the defiance which {295} they had listened to in all humility from the master, tore him from his box and put him to death.

Another carriage story of the same period, likewise associated with finance, has a less tragic conclusion. A footman who had learnt, by listening to the conversation of his master at dinner-table, the art of speculating, had at last made a sufficiently large fortune to be able to buy himself a carriage. As soon as he had taken possession of it, he paid a visit to the Rue Quincampoix, a narrow street near the Rue Saint-Martin, where the bankers, brokers, and speculators interested in Law’s various enterprises had their headquarters. After transacting a little business, the enriched flunkey entered a much-frequented café and refreshed himself. Some time afterwards, in a fit of absence due either to preoccupation or to the effect of alcoholic liquors, he left the café and, instead of getting into his carriage, got up behind it. “You have made a mistake, sir,” called out the coachman; “your place is inside.” “I know it is,” replied the proprietor of the vehicle, suddenly recovering his presence of mind; “I wanted to see whether there was room for a pair of lacqueys behind.”

If footmen became aristocrats, noblemen, in those subversive days, turned tradesmen.

The Regent made his money with the greatest ease, by simply fixing the official value of the shares he held at a figure which suited his book. The members of the Court followed his lead. One of them, the Duke de la Force, did business on an extended scale. Nothing was too high or too low for him; and on one occasion, being unable to realise the value of his paper in any more profitable form, he took for it the contents of a grocer’s shop. It was now necessary to sell the goods; on which the licensed grocers of the capital complained to the Lieutenant of Police that the Duke was entering into illegal competition with them. The Lieutenant did his duty, and the Duke’s tea and sugar were confiscated.

A footman named Languedoc, sent by his master to the Rue Quincampoix to sell some shares at a fixed rate, disposed of them for 500,000 francs more than the appointed price, and pocketing the balance, started as a gentleman on his own account, engaged servants and changed his name to that of Monsieur de La Bastide, by which he was thenceforth known.

In times of feverish speculation the surest winners are the brokers—those happy intermediaries who, whether their clients buy or sell, sink or swim, steadily take their commission. A famous intermediary of the Rue Quincampoix was a certain hunchback, who used to let out his hump as a desk for buyers, sellers, and dealers of all kinds. In a comparatively short time he is said to have realised as much as 50,000 francs.

When the financial crash arrived, it was felt necessary to punish someone, and proceedings were taken against Law by the Parliament of Paris. Law, as completely ruined as the most unfortunate of his victims, escaped to Belgium, and thence to England, to die ultimately in Italy.