236 FRANCE UNDER THE REGENCY CHAPTER XX. LOUIS XV. OF FRANCE. Ch. 20 THE reign of Louis XV. was one of the longest on record, extending from 1715 to 1774-the greater part of the eigh1715 teenth century. A. D. to Regency of the Duke of Orleans. During his minority, for he was only five years of age at 1774. the time of his accession, the reins of government were held by the Regent Duke of Orleans, the grand-nephew of Louis XIV. The most pressing subject which demanded attention, was that of the finances. The late King had left a debt of one thousand millions of livres-an enormous sum in that age; and the Duke St. Simon had proposed a bankruptcy. "It will fall," said he, "chiefly on the commercial and moneyed classes, who are neither to be feared nor pitied; and will, moreover, not only be a relief to the State, but a salutary warning to the ignoble not to lend their money," a speech strikingly illustrative of the feelings and opinions of a powerful class in France at that time. But the minister would not run the risk of incurring the odium which such a measure would have produced, and he, therefore, proposed calling together the States-General. The Regent would not hear of that measure, and yet did not feel inclined to follow the advice of St. Simon. He therefore compromised the matter, by adopting measures to defraud claimants of their rights. Financial difficulties He first established a commission authorized to verify the bills of public creditors, and, if their accounts did not prove satisfactory, to cancel them entirely. Three hundred and fifty millions of livres were thus swept away. He next resolved LAW S MISSISSIPPI SCHEME. 237 schemes not only to refuse to pay just debts, but to make people Ch. 20 refund the gains which they had made. Those who had A. D. loaned money to the State, or had farmed the revenues, were 1719. flung into prison, and threatened with the confiscation of their goods, unless they purchased pardon. The coin was then Fraudebased to such an extent, that seventy-two millions of livres dulent were by this means added to the treasury. But even these gains were not enough, for the national debt had increased to fifteeen hundred millions of livres, or almost seventy millions sterling. So the Regent listened to the schemes of the celebrated John Law, a Scotch adventurer and financier, who had established a bank, had grown rich, and was reputed to be a wonderful political economist. Law proposed, in substance, to increase the paper currency of the country, and thus to supersede the necessity for the use of the precious metals. The Regent, having great faith in Law's abilities, and in his wealth, agreed to his proposals, and in 1719 converted his private bank into a royal one, and made it, in fact, the Bank of France. This bank was then allied to the two great commercial companies of the time, the East India and the Mississippi. Great privileges were be- Missis. stowed on each. The latter had the exclusive monopoly of sippi the trade with Louisiana, of all the countries on the Missis- pany sippi River, and also of the fur trade in Canada. Louisiana was then supposed to be rich in gold mines, a notion which generated many popular delusions. The capital of this gigantic corporation was fixed at one hundred millions; and Law, who was director-general, aimed to make the notes of the company preferable to specie, which, however, could lawfully be demanded for them. As extravagant hopes of gain were cherished respecting the company, its shares were in great demand. Law's bank bills could alone purchase the shares; so the gold and silver of the realm flowed into Law's bank. Law and the Regent had now, there-fore, only to fabricate shares and bank bills to an indefinite amount. Coin 238 A. D. EXTENT OF THE DELUSION. Ch. 20 The national creditor was also paid in the notes of the bank; and as unbounded confidence existed, both in the 1719. genius of Law, and in the profits of the Mississippi Company, the shares were constantly in demand, were continually rising in value, and the creditor was satisfied. In a short time, one half of the national debt was transferred. Government became Great indebted to the bank, instead of to the individuals and corponess rations from whom loans had been originally obtained. These popular individuals, instead of Government scrip, had shares in the Mississippi Company. or the delusion General mad nesa, All would have been well, had the Company's shares been really valuable, or had but a small part of the national debt been thus transferred. But the people did not know the real issues of the bank, and so long as new shares could be created and sold to pay the interest, the Company's credit was good. For a while the delusion lasted. Law was regarded as a great national benefactor. His house was thronged with dukes and princes. He became Controller-General of the Finances, and virtually Prime Minister. His fame extended far and wide. Honors were showered upon him from every quarter. He was elected a member of the French Academy. His schemes seemed to rain upon Paris a golden shower. He had freed the State from embarrassment; he had, apparently, made everybody rich, and no one poor. He was a deity, as beneficent as he was powerful. Everybody was intoxicated. Paris was crowded with speculators from all parts of the world. Five hundred thousand persons expended their fortunes, in the hope of making greater. Twelve hundred new coaches were set up in the city. Lodgings could scarcely be had for money. The highest price was paid for provisions. Widow ladies, clergymen, and noblemen deserted London to speculate in stocks at Paris. Nothing was seen but new equipages, new houses, new apparel, new furniture. Nothing was felt but universal exhilaration. Every man seemed to have made his fortune. The stocks rose every day. The higher they rose, the more new stock was created. THE SUBSEQUENT PANIC. 239 At last, the shares of the Company rose from one hundred to Ch. 20 twelve hundred per cent., and three hundred millions were A. D. created, which were nominally worth three thousand six 1719. hundred millions of livres-one hundred and eighty times the amount of all the gold and silver at that time in Europe. the At last the Prince of Conti, who had received enormous Burstsums in bills, as the reward of his protection, annoyed to find ing of that his increasing demands were resisted, presented his notes bubble. at the bank. Then other nobles did the same, and then foreign merchants, until the bank was drained of gold and silver. Then came the panic, and the fall of stocks; then general ruin; and then universal despondency and rage. The bubble had burst, and those who, a few days before, fancied themselves rich, now found themselves poor. Property of all kinds fell to less than its original value. Houses, horses, carriages, upholstery, everything, declined in price. All were sellers, and few were purchasers. Popular execration and vengeance pursued the financier who had thus deceived the nation. He was forced to fly from Paris. His whole property was confiscated, and he was reduced to indigence and contempt. The bursting of the Mississippi bubble, of course, inflamed the nation against the Government; the Duke of Orleans was execrated, for his agency in the business had all the appearance of a fraud. But he was probably to some extent deluded as well as others. The great blunder was in the over-issue of notes, when there was no money to redeem them. conse quences Nor could any management have prevented the catastrophe. Inevi "It was not possible that the shares of the Company should table advance so greatly, and the public not perceive that they had advanced beyond their value; it was not possible, that, while paper money so vastly increased in quantity, the numerical prices of all other things should not increase also, and that foreigners who sold their manufactures to the French should not turn their paper into gold, and carry it out of the kingdom; it was not possible that the disappearance of the coin 240 A. D. to CALAMITOUS RESULTS. Ch. 20 should not create alarm, notwithstanding the edicts of the regent, and the reasonings of Law; it was not possible that 1719 annuitants should not discover that their old incomes were now insufficient, as the medium in which they were paid was 1723. less valuable; it was not possible that the small part of society, which may be called the sober and reasoning part, should not sonable- be so struck with the sudden fortunes which were made, and ness of the extravagant enthusiasm which prevailed, as not to doubt scheme. of the solidity of a system, unphilosophical in itself, and Unrea the Extra which, after all, had to depend on the profits of a commercial company, the good faith of the Regent, and the skill of Law; it was not possible, on these and other accounts, but that gold and silver should be at last preferred to paper notes, of whatever description or promise. These were inevitable consequences. Hence the failure of the scheme of Law, and the ruin of all who embarked in it, owing, first, to a change in public opinion as to the probable success of the scheme, and, secondly, to the over-issue of money." By this great folly, four hundred thousand families were ruined, or greatly reduced; while the Government got rid of about eight hundred millions of debt. Such was France under the Regency. Nor was there a change for the better when Louis XV. vagance attained his majority. His vices and follies exceeded all King. that had ever been displayed before. The support of his mistresses alone was enough to embarrass the nation. Their waste and extravagance almost exceeded belief. Five hundred millions of livres were added to the national debt for expenses too ignominious to be even named. The Parc au Cerfs cost the nation at least one hundred millions. The Palais Royal, the Palais Luxembourg, the Trianon, and Versailles, were alternately scenes of the most disgraceful excesses, and so vile was the Court that a celebrated Countess one day said at a public festival, that "God, after having formed man, took the mud that was left, and made the souls of princes and footmen." of the The regency of the Duke of Orleans occupied the first |