The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-09-02

ported in it's favor. Later the measure
was defeated, and though On act con-
stituting land bank in modified form
was passed il appears never to have done
much business, and finally died of imam
ltion.
OF this project Macaulsy Gays: "The
doctrine OF the projectors was that every
person that had real property ought to
have besides that property paper money
to the full value of that property. Thus,
If his estate wac worth $4,000 be ought
to have his estate and e2000 in paper
money. There would be no taxes, vet
the treasury would be full to overflow
ing. There would be no poor--the only
losers would be the moneyed men.
These blessed effects the land bank was
to produce simply by issuing enormous
quantities Of notes on landed security
Ihe united force of demonstration and
derision began to produce an effect and
the country was saved from a calamity
compared with which the defeat of Lam
den and the lose OF the SMYRNA feet
would hsve been blsssings.'
Law alone, of all thses projectors, had
an opportunity to put his plane into
operation, and the result the whole
world knows.
France owed vast sums to its own citi.
zens which it had no means of paying,
since its annual income and annual ex-
penditures were about equal. To secure
these creditors and also to provide
convenient medium of exchange, III the
year l7l5 paper currency was isaued
called billets d'etst,
But the result was not such az was
hoped for. These billets d'etat speedily
fell to one-quarter of their nominal
value. The market was flooded with
them, and gold and silver coins became
rarities to be secretly nosrded and jeal-
eusly guarded.
Here was Laws opportunity. He
prevailed upon the duke OF Orlenns.
then the actual and almost irresponsible
ruler OF France, to consent TO the estab-
lishment OF bank which ehould have
the privilege of issuing legal tender
notes. To induce tho government to
consent to this measure, rs per cent of
the capital stock was to be paid In
billets d'etat. Since there were immense
quantities OF these in circulation the
bank became an immediate success, and
the success Of the bank raised the credit
of the governments, aimee it increased
the demand for the billets d'etat, and
therefore raised their value.
Ths bank was converted into q state
institution, under the name of the Roy
al bank. Its operations were immensely
extended and the Mississippi company
became incorporated with it. This
company was the virtual owner in fee
simple OF the immense and unexplored
territory of Louisiana, and Its shares
consequently represented land titles.
By royal decree the shares of the
company were made exchangeable at
par for the government bank stock
that is, person holding, for inatance,
1000 livres worth of Mississippi stock
could demand the same amount OF stock
in the Royal bank, and vice versa.
Here, in measure, we see realiza-
ton OF tho Fopulist idea OF currency
based upon land. and which it was not
pretended would ever be redeemed in
gold. Had Law been enabled to carry
out dis ideas in full as set forth in his
writings before alluded to, the likeness
would have been much greater still.
The immediate effect of the inaugu-
ration of this system was the general
revival of trade. Money-the national
currency-being plentiful, all sorts of
enterprises were entered into. There
Yves plenty of work and good pay for all
who desired it. Poverty seemed to have
become thing of the past. The poor
were growing rich and the rich richer.
But with this prosperity came specu-
lation, which, like the evil fairy at the
feast. brought with it disaster and ruin.
Men who had landed, and other vslu-
able property sold it to buy shares and
in consequence shares roee immensely
in value. until in 17l9, about three years
alter the establishment OF the bank,
they had mounted to over 40 times their
nominal value.
Then came the reaction; the pro-
cedure was reversed. Men sought to
buy property with their inflated stock,
and the result was rapid rise in prop
erty and an equally rapid fall in shares.
Then it was save himself who can.
Each ore endeavored to exchange his
rapidly fluctuating stock for something
stable, no matter at what sacrifice, and
the end had come.
Soon the shares of the Royal bank
were without value and in conseq uence
the currency which 1t had issued shared
the same fate.
At the same period state OF affairs,
similar in it's results, though differing
ia it's causes, existed across the channel.
In England, the South Sea company
had played the game part in inducing a
wild speculation rs the Mississippi
company had in France, though this in
sttution had not filed the Office of q
state banker. Singular to say, conf
dence in this scheme survived after the
failure OF its French counterpart was
plainly indicated.
Twenty years previous to this, in
1896, and long before France issued its
billets d'etst, the English government
called in all the coin in circulation,
which had be same mutilated and de-
based, for the purpose OF recoinage.
The effecs was DISASTROUS.
Commerce and trade, then in the pro-
GEES of slowly recovering from the
stagnation induced BY the mel-adminis-
tration OF nearly a generation, became
at once Frustrated as with paralytic
stroke. The hum OF the loom was
hrshed. The hammer OF the workman
was stilled and ships lay idle at the
wharves.
To remedy This widespread distress,
Montague, then in charge OF the finances
OF the kingdom, hit upon an expedient
which at that time was entirely novel.
1t was to Issue exchequer bills, that is,
certificates OF the indebtedness of the
government TO the holder. They bore