The herald-advance. (Milbank, S.D.) 1890-1922, 1901-11-08
A UNDERGRADUATES
John LAW, WHO SET FRANCE On
FIRE.
Made the Louisiana Territory the fasis
OF a Marvellous Speculative Scheme
Which Eventually Ruined Ills
Country.

Country.
The country composing what Is
known as the Louisiana purchase IS
now attracting much
throughout the world, says a writer
in the st. Louis Globe-Democrat LOT
the celebration of the fair in honor OF
the treaty by which this vast region
was transferred from France to the
United States is making the name OF
Louisiana a household word in all
parts Of the world where heretofore
that important event in the history or
the United States has hardly been rec
ognized. There was once a time, now
ever, in the history of the country
which transferred louisiana to the
United States when the name OF the
Territory and Of the great river by
which it is drained were words to con-
jure by, for long ere st. Louis was a
city, when even the length Of the river
and the extent of the French claims
were problematical, the Territory
played a leading part in one OF the
most gigantic schemes ever devised by
the mind Of man.
John Law, Promoter.
John Law was it's central figure. At
the time when he appeared in Paris
with his proposal for the establishment
of a great national bank, the fortunes
of the kingdom were apparently at the
lowest ebb. The national debt. con-
tracted during the extravagant reign
of Louis XIV, was SO enormous that
even the most enthusiastic financiers
could see no hope Of payment. Law
proposed to establish a bank which,
while transacting the ordinary bust
ness Of such an institution, should also
become the financial arm Of the gov
eminent; should collect the revenues,
manage the government finances, and
in short, should be to France. what the
Bank of England is now to the British
government. He believed in credit,
and also believed that credit might be
made illimitable; that SO long as the
people were willing to accept paper
promises to pay, there was little need
Of a specie currency. Carrying out his
idea to its logical. consequences, he ac-
cepted as an equivalent, for the stock
Of the bank the deprecated securities
of the government, issued paper money
in enormous quantities, and was graft
fed to see that his scheme for reviving
the business of the country met with
apparent and
Almost Immediate Success.
Seeing the fluctuations in the nom
inal value of currency, whether gold,
silver or paper, he conceived the idea
that credit was all powerful, and that
even hypothetical profits, to come in
the future, might be safely treated as
the basis for paper currency. : With
this end in view he began to cast about
for ways and means, to carry out his
project OF unlimited circulation. The
valley OF the Mississippi was then un-
der French control; it had, however,
been only partially explored, and it
was impossible for anyone to say what
wealth, il any, lay concealed in it's soil.
Everyone knew, however, the immense
riches that had been drawn from
America by Spain. The naughty no.
bles Of Madrid were objects of envy
to the ~fashionables of Paris, and no
n doubted that when the truth be-
came known, the valley Of the Missis-
sippi would prove as rich as the noun
tains Of Mexico or Peru.
This general confidence made It COM
paratively easy for Law to organize
the Mississippi Company, a trading or
ganlzat1on so general and liberal in its
plan n scope that, under the provis-
Ions OF Its charter, almost any enter
prise looking to the development of
the Mississippi valley might be un-
dertaken.
Once Launched Finally.
The popular craze, once launched. f.
nally overtaxed it's own strength and
passed beyond the control OF the able.
though visionary, man who started the
movement. In 1920, the year which
witnessed the collapse of the South sea
bubble in England, the French house
OF cards fell to the ground. Popular
faith in Law, the Mississippi scheme
and the gigantic credit system began
to waver, and once tremulous it's over
throw was easily foreseen. The most
arbitrary measures that suggested
themselves to the mind Of a despotic
government were resorted to for the
purpose of unfolding the credit of the
company and of the nation, but all
were in vain. Men were fined and i'm
prisoned for the crime Of having gold
or silver coin In their possession. but
still. with the vision of the headsman
stalking behind them, they boarded
the precious metals. Thousands fed
Law among their number, and France
was ruined for the time being.