Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay [best inspirational books TXT] 📗
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As soon as his departure was known, all his estates and his valuable library were confiscated. Among the rest, an annuity of 200,000 livres (8000l. sterling) on the lives of his wife and children, which had been purchased for five millions of livres, was forfeited, notwithstanding that a special edict, drawn up for the purpose in the days of his prosperity, had expressly declared that it should never be confiscated for any cause whatever. Great discontent existed among the people that Law had been suffered to escape. The mob and the parliament would have been pleased to have seen him hanged. The few who had not suffered by the commercial revolution rejoiced that the quack had left the country; but all those (and they were by far the most numerous class) whose fortunes were implicated regretted that his intimate knowledge of the distress of the country, and of the causes that had led to it, had not been rendered more available in discovering a remedy.
At a meeting of the Council of Finance and the General Council of the Regency, documents were laid upon the table, from which it appeared that the amount of notes in circulation was 2700 millions. The regent was called upon to explain how it happened that there was a discrepancy between the dates at which these issues were made and those of the edicts by which they were authorised. He might have safely taken the whole blame upon himself, but he preferred that an absent man should bear a share of it; and he therefore stated that Law, upon his own authority, had issued 1200 millions of notes at different times, and that he (the regent), seeing that the thing had been irrevocably done, had screened Law by antedating the decrees of the council which authorised the augmentation. It would have been more to his credit if he had told the whole truth while he was about it, and acknowledged that it was mainly through his extravagance and impatience that Law had been induced to overstep the bounds of safe speculation. It was also ascertained that the national debt, on the 1st of January 1721, amounted to upwards of 3100 millions of livres, or more than 124,000,000l. sterling, the interest upon which was 3,196,000l. A commission, or visa, was forthwith appointed to examine into all the securities of the state creditors, who were to be divided into five classes; the first four comprising those who had purchased their securities with real effects, and, the latter comprising those who could give no proofs that the transactions they had entered into were real and bonâ fide. The securities of the latter were ordered to be destroyed, while those of the first four classes were subjected to a most rigid and jealous scrutiny. The result of the labours of the visa, was a report, in which they counselled the reduction of the interest upon these securities to fifty-six millions of livres. They justified, this, advice by a statement of the various acts of peculation and extortion which they had discovered; and an edict to that effect was accordingly published and duly registered by the parliaments of the kingdom.
D’ARGENSON.
Another tribunal was afterwards established, under the title of the Chambre de l’Arsenal, which took cognisance of all the malversations committed in the financial departments of the government, during the late unhappy period. A Master of Requests, named Falhonet, together with the Abbé Clement, and two clerks in their employ, had been concerned in divers acts of peculation to the amount of upwards of a million of livres. The first two were sentenced to be beheaded, and the latter to be hanged; but their punishment was afterwards commuted into imprisonment for life in the Bastille. Numerous other acts of dishonesty were discovered, and punished, by fine and imprisonment.
D’Argenson shared with Law and the regent the unpopularity which had alighted upon all those concerned in the Mississippi madness. He was dismissed from his post of Chancellor to make room for D’Aguesseau; but he retained the title of Keeper of the Seals, and was allowed to attend the councils whenever he pleased. He thought it better, however, to withdraw from Paris, and live for a time a life of seclusion at his country-seat. But he was not formed for retirement; and becoming moody and discontented, he aggravated a disease under which he had long laboured, and died in less than a twelve-month. The populace of Paris so detested him, that they carried their hatred even to his grave. As his funeral procession passed to the church of St. Nicholas du Chardonneret, the burying-place of his family, it was beset by a riotous mob, and his two sons, who were following as chief mourners, were obliged to drive as fast as they were able down a by-street to escape personal violence.
As regards Law, he for some time entertained a hope that he should be recalled to France, to aid in establishing its credit upon a firmer basis. The death of the regent in 1723, who expired suddenly as he was sitting by the fireside conversing with his mistress, the Duchess de Phalaris, deprived him of that hope, and he was reduced to lead his former life of gambling. He was more than once obliged to pawn his diamond, the sole remnant of his vast wealth, but successful play generally enabled him to redeem it. Being persecuted by his creditors at Rome, he proceeded to Copenhagen, where he received permission from the English ministry to reside in his native country, his pardon for the murder of Mr. Wilson having been sent over to him in 1719. He was brought over in the admiral’s ship—a circumstance which gave occasion for a short debate in the House of Lords. Earl Coningsby complained that a man who had renounced both his country and his religion, should have been treated with such honour, and expressed his belief that his presence in England, at a time when the people were so bewildered by the nefarious practices of the South-Sea directors, would be attended with no little danger. He gave notice of a motion on the subject; but it was allowed to drop, no other member of the House having the slightest participation in his lordship’s fears. Law remained for about four years in England, and then proceeded to Venice, where he died in 1729, in very embarrassed circumstances. The following epitaph was written at the time:
“Ci gît cet Ecossais célébre,
Ce calculateur sans égal,
Qui, par les régles de l’algébre,
A mis la France à l’hôpital.”
His brother, William Law, who had been concerned with him in the administration both of the bank and the Louisiana Company, was imprisoned in the Bastille for alleged malversation, but no guilt was ever proved against him. He was liberated after fifteen months, and became the founder of a family, which is still known in France under the title of Marquises of Lauriston.
NECK OR NOTHING.15
In the next chapter will be found an account of the madness which infected the people of England at the same time, and under very similar circumstances, but which, thanks to the energies and good sense of a constitutional government, was attended with results far less disastrous than those which were seen in France.
SOUTH-SEA HOUSE.
THE SOUTH-SEA BUBBLE.Contents
At length corruption, like a general flood,
Did deluge all; and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre’s sordid charms.—Pope.
The South-Sea Company was originated by the celebrated Harley Earl of Oxford, in the year 1711, with the view of restoring public credit, which had suffered by the dismissal of the Whig ministry, and of providing for the discharge of the army and navy debentures, and other parts of the floating debt, amounting to nearly ten millions sterling. A company of merchants, at that time without a name, took this debt upon themselves, and the government agreed to secure them for a certain period the interest of six per cent. To provide for this interest, amounting to 600,000l. per annum, the duties upon wines, vinegar, India goods, wrought silks, tobacco, whale-fins, and some other articles, were rendered permanent. The monopoly of the trade to the South Seas was granted, and the company, being incorporated by act of parliament, assumed the title by which it has ever since been known. The minister took great credit to himself for his share in this transaction, and the scheme was always called by his flatterers “the Earl of Oxford’s masterpiece.”
HARLEY EARL OF OXFORD
Even at this early period of its history the most visionary ideas were formed by the company and the public of the immense riches of the eastern coast of South America. Every body had heard of the gold and silver mines of Peru and Mexico; every one believed them to be inexhaustible, and that it was only necessary to send the manufactures of England to the coast to be repaid a hundred fold in gold and silver ingots by the natives. A report, industriously spread, that Spain was willing to concede four ports on the coasts of Chili and Peru for the purposes of traffic, increased the general confidence, and for many years the South-Sea Company’s stock was in high favour.
Philip V. of Spain, however, never had any intention of admitting the English to a free trade in the ports of Spanish America. Negotiations were set on foot, but their only result was the assiento contract, or the privilege of supplying the colonies with negroes for thirty years, and of sending once a year a vessel, limited both as to tonnage and value of cargo, to trade with Mexico, Peru, or Chili. The latter permission was only granted upon the hard condition, that the King of Spain should enjoy one-fourth of the profits, and a tax of five per cent on the remainder. This was a great disappointment to the Earl of Oxford and his party, who were reminded much oftener than they found agreeable of the
“Parturiunt montes, nascitur ridiculus mus.”
But the public confidence in the South-Sea Company was not shaken. The Earl of Oxford declared that Spain would permit two ships, in addition to the annual ship, to carry out merchandise during the first year; and a list was published, in which all the ports and harbours of these coasts were pompously set forth as open to the trade of Great Britain. The first voyage of the annual ship was not made till
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