Part 153

"When the Regent Orleans assumed the government of France, he found its affairs in frightful confusion. The public debt was three hundred millions; putting the debt on one side, the expenditure was only just covered by the revenue. St. Simon advised him to declare a national bankruptcy. De Noailles, less scrupulous, proposed to debase the coinage. ... In such desperate circumstances, it was no wonder that the regent was ready to catch eagerly at any prospect of success. A remedy was proposed to him by the famous John Law of Lauriston. This new light of finance had gambled in, and been banished from, half the courts of Europe; he had figured in the English 'Hue and Cry,' as 'a very tall, black, lean man, well-shaped, above six feet high, large pock-holes in his face, big-nosed, speaks broad and loud.' He was a big, masterful, bullying man, one of keen intellect as well; the hero of a hundred romantic stories. ... He studied finance at Amsterdam, then the great school of commerce, and offered his services and the 'system' which he had invented, first to Godolphin, when that nobleman was at the head of affairs in England, then to Victor Amadeus, duke of Savoy, then to Louis XIV., who, as the story goes, refused any credit to a heretic. He invented a new combination at cards, which became the despair of all the croupiers in Europe; so successful was this last invention, that he arrived for the second time at Versailles, in the early days of the regency, with upwards of £120,000 at his disposal, and a copy of his 'system' in his pocket. ... There was a dash of daring in the scheme which suited well with the regent's peculiar turn of mind; it was gambling on a gigantic scale. ... Besides, the scheme was plausible and to a certain point correct. The regent, with all his faults, was too clever a man not to recognize the genius which gleamed in Law's dark eyes. Law showed that the trade and commerce of every country was crippled by the want of a circulating medium; specie was not to be had in sufficient quantities; paper, backed by the credit of the state, was the grand secret. He adduced the examples of Great Britain, of Genoa, and of Amsterdam to prove the advantage of a paper currency; he proposed to institute a bank, to be called the 'Bank of France,' and to issue notes guaranteed by the government and secured on the crown lands, exchangeable at sight for specie, and receivable in payment of taxes; the bank was to be conducted in the king's name, and to be managed by commissioners appointed by the States-General. The scheme of Law was based on principles which are now admitted as economical axioms; the danger lay in the enormous extent to which it was intended to push the scheme. ... While the bank was in the hands of Law himself, it appears to have been managed with consummate skill; the notes bore some proportion to the amount of available specie; they contained a promise to pay in silver of the same standard and weight as that which existed at the time. A large dividend was declared; then the regent stepped in. The name of the bank was changed to that of the Royal Bank of France, the promise to pay in silver of a certain weight and standard was dropped, and a promise substituted to pay 'in silver coin.' This omission, on the part of a prince who had already resorted to the expedient of debasing the currency, was ominous, and did much to shake public confidence; the intelligence that in the first year of the new bank 1,000,000,000 of livres were fabricated, was not calculated to restore it. But these trifles were forgotten in the mad excitement which followed. Law had long been elaborating a scheme which is for ever associated with his name, and beside which the Bank of France sank into insignificance. In 1717, the year before the bank had been adopted by the regent, the billets d'état of 500 livres each were worth about 160 livres in the market. Law, with the assent of the regent, proposed to establish a company which should engross all the trade of the kingdom, and all the revenues of the crown, should carry on the business of merchants in every part of the world, and monopolize the farming of the taxes and the coining of money; the stock was to be divided into 200,000 shares of 500 livres each. The regent nearly marred the scheme at starting by inserting a proviso that the depreciated billets d'état were to be received at par in payment for the new stock, on which four per cent. was guaranteed by the State." Law's company was formed, under the name of the Company of the West, and obtained for the basis of its operations a monopoly of the trade of that vast territory of France in the valley of the Mississippi which bore the name of Louisiana. The same monopoly had been held for five years by one Crozat, who now resigned it because he found it unprofitable; but the fact received little attention.

See LOUISIANA: A. D. 1717-1718.

{1248}

"Louisiana was described as a paradise. ... Shareholders in the company were told that they would enjoy the monopoly of trade throughout French North America, and the produce of a country rich in every kind of mineral wealth. Billets d'état were restored to their nominal value; stock in the Mississippi scheme was sold at fabulous prices; ingots of gold, which were declared to have come from the mines of St. Barbe, were taken with great pomp to the mint; 6,000 of the poor of Paris were sent out as miners, and provided with tools to work in the new diggings. New issues of shares were made; first 50,000, then 50,000 more; both at an enormous premium. The jobbers of the rue Quincampoix found ordinary language inadequate to express their delight: they invented a new slang for the occasion, and called the new shares 'les filles,' and, 'les petites filles,' respectively. Paris was divided between the 'Anti-system' party who opposed Law, and the Mississippians who supported him. The State borrowed from the company fifteen hundred millions; government paid its creditors in warrants on the company. To meet them, Law issued 100,000 new shares; which came out at a premium of 1,000 per cent. The Mississippians went mad with joy--they invented another new slang phrase; the 'cinq cents' eclipsed the filles and the petites filles in favour. The gates of Law's hotel had to be guarded by a detachment of archers; the cashiers were mobbed in their bureaux; applicants for shares sat in the ante-rooms; a select body slept for several nights on the stairs; gentlemen disguised themselves in Law's livery to obtain access to the great man. ... By this time the charter of the company of Senegal had been merged in the bank, which also became sole farmer of the tobacco duties; the East India Company had been abolished, and the exclusive privilege of trading to the East Indies, China, and the South Seas, together with all the possessions of Colbert's company were transferred to Law. The bank now assumed the style of the Company of the Indies. Before the year [1719] was out the regent had transferred to it the exclusive privilege of the mint, and the contract of all the great farms. Almost every branch of industry in France, its trade, its revenue, its police, were now in the hands of Law. Every fresh privilege was followed by a new issue of shares. ... The shares of 500 franks were now worth 10,000. The rue Quincampoix became impassable, and an army of stockjobbers camped in tents in the Place Vendome. ... The excitement spread to England [where the South Sea Bubble was inflated by the madness of the hour].

See SOUTH SEA BUBBLE.

... Law's system and the South Sea scheme both went down together. Both were calculated to last so long, and so long only, as universal confidence existed; when it began to be whispered that those in the secret were realizing their profits and getting out of the impending ruin, the whole edifice came down with a crash. ... No sooner was it evident that the system was about to break down, than Law, the only man who could at least have mitigated the blow, was banished."

_Viscount Bury, Exodus of the Western Nations, volume 2, chapter 5._

ALSO IN: _C. Mackay, Memoirs of Extraordinary Popular Delusions, volume 1, chapter 1._

_A. Thiers, The Mississippi Bubble._

_W. C. Taylor, Memoirs of the House of Orleans, volume 2, chapter 2._

_C. Gayarre, History of Louisiana, second series, lecture 1._

_Duke de Saint-Simon, Memoirs: abridged translation by St. John, volume 3, chapter 25, and volume 4, chapters 4, and 13-15._

FRANCE: A. D. 1720. The fortifying of Louisbourg.

See CAPE BRETON ISLAND: A. D. 1720-1745.

FRANCE: A. D. 1723-1774. Character and reign of Louis XV. The King's mistresses and their courtiers who conducted the government. State and feeling of the nation.

After the death of the Duke of Orleans, "a short period of about two years and a-half comprehends the administration of the Duke of Bourbon, or rather of his mistress, la Marquise de Prie. Fleury [Cardinal] then appears on the stage, and dies in 1743. He was, therefore, minister of France for seventeen years. On his death, the king (Louis XV.) undertook to be his own prime minister; an unpromising experiment for a country at any time. In this instance the result was only that the king's mistress, Madame de Chateauroux, became the ruler of France, and soon after Madame de Pompadour, another mistress, whose reign was prolonged from 1745 to 1768. Different courtiers and prelates were seen to hold the first offices of the state during this apparent premiership of the monarch. The ladies seem to have chosen or tolerated Cardinal Tençin, Argençon, Orsy, Mauripaux, and Amelot, who, with the Dukes Noailles and Richelieu, succeeded to Fleury. Afterwards, we have Argençon and Machault, and then come the most celebrated of the ministers or favourites of Madame de Pompadour, the Abbé de Bemis and the Duc de Choiseul. The last is the most distinguished minister after Fleury. He continued in favour from 1758, not only to 1763, when Madame de Pompadour died, but for a few years after. He was at length disgraced by la Comtesse Dubarri, who had become the king's mistress soon after the death of Madame de Pompadour, and remained so, nearly to the death of the monarch himself, in 1774."

_W. Smyth, Lectures on the History of the French Revolution, lecture 3._

"The regency of the Duke of Orleans lasted only eight years, but it was not without a considerable effect upon the destinies of the country. It was a break in the political and the religious traditions of the reign of Louis XIV. The new activity imparted to business during this period was an event of equal importance. Nothing is more erroneous than to suppose that constantly increasing misery at last excited revolt against the government and the institutions of the old regime. The Revolution in France at the close of the eighteenth century was possible, not because the condition of the people had grown worse, but because it had become better. The material development of that country, during the fifty years that preceded the convocation of the States General, had no parallel in its past history. Neither the weight of taxation, nor the extravagance of the court, nor the bankruptcy of the government, checked an increase in wealth that made France in 1789 seem like a different land from France in 1715. The lot of large classes was still miserable, the burden of taxation upon a large part of the population was still grievous, there were sections where Arthur Young could truly say that he found only poverty and privileges, but the country as a whole was more prosperous than Germany or Spain; it was far more prosperous than it had been under Louis XIV. ... {1249} Such an improvement in material conditions necessitated both social and political changes. ... But while social conditions had altered, political institutions remained unchanged. New wine had been poured in, but the old bottles were still used. Tailles and corvées were no more severe in the eighteenth than in the fifteenth century, but they were more odious. A feudal privilege, which had then been accepted as a part of the law of nature, was now regarded as contrary to nature. ... A demand for social equality, for the abolition of privileges and immunities by which any class profited at the expense of others, was fostered by economical changes. It received an additional impetus from the writings of theorists, philosophers, and political reformers. The influence of literature in France during the eighteenth century was important, yet it is possible to overestimate it. The seed of political and social change was shown by the writers of the period, but the soil was already prepared to receive it. ... The course of events, the conduct of their rulers, prepared the minds of the French people for political change, and accounted for the influence which literature acquired. The doctrines of philosophers found easy access to the hearts of a people with whom reverence for royalty and a tranquil acceptance of an established government had been succeeded by contempt for the king and hatred for the regime under which they lived. We can trace this change of sentiment during the reign of Louis XV. The popular affection which encircled his cradle accompanied him when he had grown to be a man. ... Few events are more noticeable in the history of the age than the extraordinary expressions of grief and affection that were excited by the illness of Louis XV. in 1744. ... A preacher hailed him as Louis the well beloved, and all the nation adopted the title. 'What have I done to be so loved?' the king himself asked. Certainly he had done nothing, but the explanation was correctly given. 'Louis XV. is dear to his people, without having done anything for them, because the French are, of all nations, most inclined to love their king.' This affection, the result of centuries of fidelity and zeal for monarchical institutions, and for the sovereigns by whom they were personified, was wholly destroyed by Louis's subsequent career. The vices to which he became addicted were those which arouse feelings not only of reprehension, but of loathing. They excited both aversion and contempt. The administration of the country was as despicable as the character of the sovereign. Under Louis XIV. there had been suffering and there had been disaster, but France had always preserved a commanding position in Europe. ... But now defeat and dishonor were the fate of a people alike powerful and proud. ... The low profligacy into which the king had sunk, the nullity of his character, the turpitude of his mistress, the weakness of his administration, the failure of all his plans, went far toward destroying the feelings of loyalty that had so long existed in the hearts of the French people. Some curious figures mark the decline in the estimation in which the king was held. In 1744, six thousand masses were said at Nôtre Dame for the restoration of Louis XV. to health; in 1757, after the attempted assassination by Damiens, there were six hundred; when the king actually lay dying, in 1774, there were only three. The fall from six thousand to three measures the decline in the affection and respect of the French people for their sovereign. It was with a public whose sentiments had thus altered that the new philosophy found acceptance."

_J. B. Perkins, France under the Regency, chapter 1._

ALSO IN: _F. Rocquain, The Revolutionary Spirit preceding the French Revolution, chapters 2-8._

_J. Murray, French Finance and Financiers under Louis XV._

FRANCE: A. D. 1725. The alliance of Hanover.

See SPAIN: A. D. 1713-1725.

FRANCE: A. D. 1727-1731. Ineffectual congress at Soissons. The Treaty of Seville, with Spain and England. The Second Treaty of Vienna.

See SPAIN: A. D. 1726-1731.

FRANCE: A. D. 1733. The First Family Compact of the Bourbons (France and Spain).

"The two lines of the house of Bourbon [in France and in Spain] once more became in the highest degree prominent. ... As early as November 1733 a Family Compact (the first of the series) was concluded between them, in which they contemplated the possibility of a war against England, but without waiting for it entered into an agreement against the maritime supremacy of that power. ... The commercial privileges granted to the English in the Peace of Utrecht seemed to both courts to be intolerable."

_L. von Ranke, History of England, book 22, chapter 4 (volume 5)._

"It is hardly too much to say that the Family Compact of 1733, though even yet not generally known to exist, is the most important document of the middle period of the 18th century and the most indispensable to history. If that period seems to us confused, if we lose ourselves in the medley of its wars--war of the Polish election, war of Jenkins's ears, war of the Austrian succession, colonial war of 1756--the simple reason is that we do not know this treaty, which furnishes the clue. From it we may learn that in this period, as in that of Louis XIV. and in that of Napoleon, Europe struggled against the ambitious and deliberately laid design of an ascendant power, with this difference, that those aggressors were manifest to all the world and their aims not difficult to understand, whereas this aggression proceeded by ambuscade, and, being the aggression not of a single state but of an alliance, and a secret alliance, did not become clearly manifest to Europe even when it had to a considerable extent attained its objects. ... The first two articles define the nature of the alliance, that it involves a mutual guarantee of all possessions, and has for its object, first, the honour, glory, and interests of both powers, and, secondly, their defence against all damage, vexation, and prejudice that may threaten them." The first declared object of the Compact is to secure the position of Don Carlos, the Infant of Spain, afterwards Charles III., in Italy, and "to obtain for him the succession in Tuscany, protecting him against any attack that may be attempted by the Emperor or by England. Next, France undertakes to 'aid Spain with all her forces by land or sea, if Spain should suspend England's enjoyment of commerce and her other advantages, and England out of revenge should resort to hostilities and insults in the dominions and states of the crown of Spain, whether within or outside of Europe.'" {1250} Further articles provide for the making of efforts to induce Great Britain to restore Gibraltar to Spain; set forth "that the foreign policy of both states is to be guided exclusively by the interests of the house"; denounce the Austrian Pragmatic as "opposed to the security of the house of Bourbon." "The King of France engages to send 32,000 infantry and 8,000 cavalry into Italy, and to maintain other armies on his other frontiers; also to have a squadron ready at Toulon, either to join the Spanish fleet or to act separately, and another squadron at Brest, 'to keep the English in fear and jealousy'; also, in case of war with England breaking out, to commission the largest possible number of privateers. Spain also promises a fixed number of troops. The 11th and 12th articles lay the foundation of a close commercial alliance to be formed between France and Spain. Article 13 runs as follows:--'His Catholic majesty, recognising all the abuses which have been introduced into commerce, chiefly by the British nation, in the eradication of which the French and Spanish nations are equally interested, has determined to bring everything back within rule and into agreement with the letter of treaties'"--to which end the two kings make common cause. "Finally the 14th article provides that the present treaty shall remain profoundly secret as long as the contracting parties shall judge it agreeable to their interests, and shall be regarded from this day as an eternal and irrevocable Family Compact. ... Here is the explanation of the war which furnished the immediate occasion of the first Compact, a war most misleadingly named from the Polish election which afforded an ostensible pretext for it, and deserving better to be called the Bourbon invasion of Italy. Here too is sketched out the course which was afterwards taken by the Bourbon courts in the matter of the Pragmatic Sanction. Thirdly, here most manifestly is the explanation of that war of Jenkins's ears, which we have a habit of representing as forced upon Spain by English commercial cupidity, but which appears here as deliberately planned in concert by the Bourbon courts in order to eradicate the 'abuses which have been allowed to creep into trade.'"

_J. R. Seeley, The House of Bourbon (English History Review, January, 1886)._

ALSO IN: _J. McCarthy, History of the Four Georges, chapter 22 (volume 2)._

FRANCE: A. D. 1733-1735. War with Austria, in Germany and Italy. Final acquisition of Lorraine. Naples and Sicily transferred to Spain.