Detroit evening times., 1945-06-27


seductive schemes based favors subsidies
and the right to tax 49,, ,,o,.,., =, ,,, u,o,,,
THE AGES, PROPHETS OF QUICK AND EASY PROS
PERITY INVARIABLY SPOKE VOLUBLY ABOUT HUMAN
BETTERMENT." BUT IN THE END THEY DELIVERED
ONLY DISILLUSIONMENT AND DESPAIR!
Many of the contemporary dogmas of the new
economies based the gories of federal deficit spending
the intellectual innovations introduced by
John Law native Scotsman, Law in dealing with the
French people, erred in failing to apprase in advance the
hazards of overconfdence and excessive hope.
4 FTER Frances fiscal affairs had been disrupted by the
"A extravaganza of Louis XIV Law introduced paper
rency France as supplement to coins The scheme was
successful the total issue limited but in time
political racketeerng resulted ovessue with inevitable
financial embarrassment
After introducing the soft money concept devoted
himself his famous Mississippi project sometimes called
the Mississippi Bubble Under sponsorship Of the Law
had set up company earte-Tt the exclusive privilege
of trading with the Mississippi River region in the world
- The company, whose shares were publicly sod got
exclusive rights of taxation and Established in ILL.,
the company years later also received exclusive privileges
of trading with the East Indies China and the South Seas and
all the possessions of the French East India Company
Additional shares issued and Law promised returns Of
120 per cent.
YINHIS kndled so much popular enthusiasm that least
300 600 applications were received for the so 600 additional
shares issued The demand for shares nssen
that the authorized increase the volume OF
stock Instead adding $4,000 shares the 100000 original
shares of 500 vres each "a vre equaed 1872 cents the
authorized Law add 100000 shares of 5000 vres each
The objective take advantage of the popular
debt This done, and the demand sufficient to have
foated issue three times large
Speculation in the shares went at a tumutuous pace
among nobility and alike 1t reported that
hunchback earned living while standing in the streets
Laws headquarters by bending and permitting
laters to use his hump writing desk.
While the gold rush lasted strangers from all parts of the
world focked to Paris.
The blowing up of the bubble made Law the most in
huential France In poetry and Law
eulogiZed the savior of France.
Speculation in the venture financed by an ever
increasing quantity of paper money.
TNHE first warning in 1920 when Prince De Cont,
offended because Law would not sell him additional shares
price, his bank demand specie pay
for many that required three
the proceeds AS others gradually followed this
example Law in order to discourage the demand for hard
proposed that coin be arbitrarily deprecated
cent below paper money.
This edc proved insufficient, and a subsequent one
deprecated coin 10 per cent.
Later payments at the bank limited to 100 liVres
in gold and 10 in silver.
Despite maneuvers wise skeptcs continued
vert to precious metals which were shipped to England and
Holland
The edicts intended deter individuals from protecting
themselves thoroughly frightened the pepuaee and revocab
destroyed confidence in the paper money
Shares in the Mississippi project fell with great sudden
The funds of the Royal Bank put behind the
company
Meantime issue of paper currency proceeding
The ordered that paper and shares in
the company should gradually be cut to oneha their nominal
worth. Parliament refused to approve this.
Finally, the bank had to stop specie payment
INO SAVE his the regent dismissed Law who had
become the popular scapegoat
Law migrated to Brussels and then 10 Venice, and his
properties in France confscated
Law waited vain for call to return France to
vanished credit He spent four years England
returned Venice where he died in 1929 very
embarrassed circumstances.
As bring this historical example to date the
issue before the American people today Is whether
learn from history instead of having to blow up
bubbles and wait for them to burst
1t is we'll to view in historical perspective Wallaces
economic fantasies which effect American edition
Sir William H. Bevedges thesis expressed his book
titled Full Employment in Free Society.
-{ ITO Be Contnued)