Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1893-01-02

Inc andiHa Clnal sensation Is great
but France once had greater-the
bursting of the Mississippi bubble.
The originator of the Mississippi
scheme" was John Law, Scotchman.
The son of goldsmith, Law, at the
age of 20, went from Edinburgh to Lon
don. There he gambled, drank and
ilirted till love intrigue resulted in a
duel, in which he killed his antagonist.
Condemned to death he fled to Holland
and began a study of the financial
methods there in vogue. He planned
an expedition to the very lsthmus OF
Panama, which name is now on the
worlds tongue.
Law visited Brussels, Paris, Vienna,
Genoa and Rome, making money every
where and spending it lavishily. About
this time Louis XIV died, leaving
France on the verge of bankruptcy.
Law gained the ear of the Regent, the
Duke of Orleans, and obtained permis-
sion to found q bank. The capital was
100000 livres, divided into 1900 shares
of 5000 livres. The bank had power to
issue notes payable at sight in the
weight and value Of the money men,
toned at the day of issue. The bank
was a great success from the start. Law
sprang into high and general favor.
Law then developed his historic Mis-
sissippi Company. The capital was
l00,660,000 divided into 100000 shares
Of 500 livres. The payments were to
be one-fourth in coin and three e-fourth
in billets d'etat. On these last the gov
erumcnt was to pay 100000 of livres
interest yearly 10 the company. As
the State paper was deprecated the
shares fell much below par.
Meantime Laws bank became q
royal institution and increased its pa
per issue to 110,000,000 Law an
nounced that he would take over shares
in the Mississippi Company at par at q
near date. The shares began to rise.
The East Iudia and China companies
were united with the Mississippi, and
Some of the 800 livre shares sold for
750. Law was then granted the mint
and coin issue of the kingdom. There
was a run on Laws bank, but he stop
ped it. A rival company arose, but he
crushed it at a blow Law then took
over the national debt of 800, 100000,
livrcs. Law was greater than any
king.
The system was now complete, but it
had already begun to decay. The shares
amounted to 10000 livres, 40 times
their nominal value. A sort OF
madness possessed the French
nation. Men sold their all
and FASTENED to Paris to speculate
The city's population was enormously
increased Trade received tremen'
dous impulse. Everybody appeared to
be getting rich.
But the collapse soon came. The
whole issue Of shares at the extreme
market price valued II milliard livres
Tt would require 500 million annual
revenue to give n 5 per cent. dividend
on this. Now, the whole income of the
company was as yet hardly sufficient tc
pay 5 per cent. on the original capital
of / milliard G67 million livres. Peo
ple began to sell their shares and tc
buy coin, houses and land. Law began
to issue violent edicts. The notes were
to bear premium over specie. Coin
was to be used in small dealings only
A dividend of 40 per cent. on the origi
nal capital was promised. These acts
and promises merely fastened the ca
tastrophc. Laws life was threatened
Prices arose enormously. There wa:
everywhere distress and complete ii
nancial confusion. The bank was abol
ished and the government took up 1t:
debt. Law quit France and died al
Venice as poor as Jobs turkey.