The Bridgeport evening farmer., 1914-06-18
LAWS SYSTEM THE UNITED STATES

that happens today will seldom happen Tor precisely the same reasons as the similar lining that occurred "a hundred or two hundred years ago. But there is frequently likeness in the events leading up to the earlier matter, by which the last one may be understood.
 There have been several historic panics, due to reasons which may be profitably studied iii connection with the business. depression in this country
 But certain allowances nnu st be. made. Two hundred, three hundred, or even one hundredI years ago, the most stable nations were, so to speak. in a constant state of panic. Wars were constantly fought. Invention had not pro ceeded far Government by thu people had not been established Crops were not as sure as they are now. Fafnines were frequent, and starvation imminent. Neither in property, nor in life and limb, was man anything like as safe as he IS now
 With these facts in mind consider the Mis sissippi Bubble, sometimes called John Laws scheme or Law system
 Law was Scotchman. He had a broad and real knowledge of political economy and finance, amounting almost to genius
 By methods that need not be- reheaPsed here he obtained early in the seventeenth cen turys from one of the regents of France per- mission to establish a private bank and a char ter for a company to deal in lands and indus tries in the valley. of the Mississippi.
 His bank pro Sacred and was of some real service to the people of France. Had it been kept Independent from bis company it might have renamed uIlll sIfl45 day buG when the company failed, the bank failed, and they both ended together
 Law boomed his company 50 adroitly and got such laws from the government as encour aged trading in his shares.
 These shares rose to forty times their face value. Everybody speculated in them Finally the whole issue was i2,O00 millions of millions. no pay five per cent interest on them would have required 600 millions, and that was great deal more than the company income.
 When the craze for speculation was at it's top mark sort of mania seized the people of France. Men sold everything they had and speculated with the proceeds
 A frenzy of stock jobbing overturned pri- sate fortunes, destroyed social positions, in- iufed public morals and brought the country almost to national bankruptcY-
 All this soecuffed- more than 200 years ago.. But what occurred has this resemblance to what has occurred, and is occurring, all about us. today.
 Law got government backing for his c0nl- pany This hacking created confidence in the company. sis
 He not laws which enabled him to issue securities for millions more than the value of its property, and which called for interest or dividend payments in excess of any possible earning power of the property.
 This is precisely what happened in New Haven. Morgan, his underStIapper MelIen, and their stbordinates the directors established a close relationship with the state They became HHC~C of the state.
 Thus enfrenched they secured laws ade- quate to their purposes, and issued and sold shares of their company es long as the market would take them.
 But the value behind these shares, stock and bonds, was not equal to the amount they represented, and the power to take income from the people adequate to meet dividends and interest did not exist. Hence the distress which overlook the company
 Tn the essence of the thing this was the John Law scheme over again, with this diff ference that Law was. probably an honest and we'll meaning genius, who over-estimated his own powers and the possibilities of his system.
 During the two centuries that have elapsed since Laws time the meaning of stock water ing has come to be we'll understood. Men who engage in that sort of thing in these days are very we'll aware what they doing.
 Every legislature of every state contains some men who know what government aid to stock watering means
 The modern article in stockwatering therefore, is not an error of genius, mis- taken effort to better conditions. It is the de- 1iberate effort of some men to deprive other men Of their property.
 For the past twenty years Wall street a general designation for the activities of few finaneiers-- has been working Laws system on