Charles Mackay - Extraordinary Popular Delusions and the Madness of Crowds (Complete Edition - Volume 1-3)

(The following squib was circulated on the occasion:—

"Foin de ton zele seraphique,

Malheureux Abbe de Tencin,

Depuis que Law est Catholique,

Tout le royaume est Capucin

Thus, somewhat weakly and paraphrastically rendered by Justansond, in his translation of the "Memoirs of Louis XV:"—

"Tencin, a curse on thy seraphic zeal,

Which by persuasion hath contrived the means

To make the Scotchman at our altars kneel,

Since which we all are poor as Capucines?)

On the following day he was elected honorary churchwarden of the parish of St. Roch, upon which occasion he made it a present of the sum of five hundred thousand livres. His charities, always magnificent, were not always so ostentatious. He gave away great sums privately, and no tale of real distress ever reached his ears in vain.

At this time, he was by far the most influential person of the state. The Duke of Orleans had so much confidence in his sagacity, and the success of his plans, that he always consulted him upon every matter of moment. He was by no means unduly elevated by his prosperity, but remained the same simple, affable, sensible man that he had shown himself in adversity. His gallantry, which was always delightful to the fair objects of it, was of a nature, so kind, so gentlemanly, and so respectful, that not even a lover could have taken offence at it. If upon any occasion he showed any symptoms of haughtiness, it was to the cringing nobles, who lavished their adulation upon him till it became fulsome. He often took pleasure in seeing how long he could make them dance attendance upon him for a single favour. To such of his own countrymen as by chance visited Paris, and sought an interview with him, he was, on the contrary, all politeness and attention. When Archibald Campbell, Earl of Islay, and afterwards Duke of Argyle, called upon him in the Place Vendome, he had to pass through an ante-chamber crowded with persons of the first distinction, all anxious to see the great financier, and have their names put down as first on the list of some new subscription. Law himself was quietly sitting in his library, writing a letter to the gardener at his paternal estate of Lauriston about the planting of some cabbages! The Earl stayed for a considerable time, played a game of piquet with his countryman, and left him, charmed with his ease, good sense, and good breeding.

Among the nobles who, by means of the public credulity at this time, gained sums sufficient to repair their ruined fortunes, may be mentioned the names of the Dukes de Bourbon, de Guiche, de la Force (The Duke de la Force gained considerable sums, not only by jobbing in the stocks, but in dealing in porcelain, spices, &c. It was debated for a length of time in the Parliament of Paris whether he had not, in his quality of spice-merchant, forfeited his rank in the peerage. It was decided in the negative. A caricature of him was made, dressed as a street porter, carrying a large bale of spices on his back, with the inscription, "Admirez La Force."), de Chaulnes, and d'Antin; the Marechal d'Estrees, the Princes de Rohan, de Poix, and de Leon. The Duke de Bourbon, son of Louis XIV by Madame de Montespan, was peculiarly fortunate in his speculations in Mississippi paper. He rebuilt the royal residence of Chantilly in a style of unwonted magnificence, and, being passionately fond of horses, he erected a range of stables, which were long renowned throughout Europe, and imported a hundred and fifty of the finest racers from England, to improve the breed in France. He bought a large extent of country in Picardy, and became possessed of nearly all the valuable lands lying between the Oise and the Somme.

When fortunes such as these were gained, it is no wonder that Law should have been almost worshipped by the mercurial population. Never was monarch more flattered than he was. All the small poets and litterateurs of the day poured floods of adulation upon him. According to them he was the saviour of the country, the tutelary divinity of France; wit was in all his words, goodness in all his looks, and wisdom in all his actions. So great a crowd followed his carriage whenever he went abroad, that the Regent sent him a troop of horse as his permanent escort, to clear the streets before him.

It was remarked at this time, that Paris had never before been so full of objects of elegance and luxury. Statues, pictures, and tapestries were imported in great quantities from foreign countries, and found a ready market. All those pretty trifles in the way of furniture and ornament which the French excel in manufacturing, were no longer the exclusive play-things of the aristocracy, but were to be found in abundance in the houses of traders and the middle classes in general. Jewellery of the most costly description was brought to Paris as the most favourable mart. Among the rest, the famous diamond, bought by the Regent, and called by his name, and which long adorned the crown of France. It was purchased for the sum of two millions of livres, under circumstances which show that the Regent was not so great a gainer as some of his subjects, by the impetus which trade had received. When the diamond was first offered to him, he refused to buy it, although he desired, above all things, to possess it, alleging as his reason, that his duty to the country he governed would not allow him to spend so large a sum of the public money for a mere jewel. This valid and honourable excuse threw all the ladies of the court into alarm, and nothing was heard for some days but expressions of regret, that so rare a gem should be allowed to go out of France; no private individual being rich enough to buy it. The Regent was continually importuned about it; but all in vain, until the Duke de St. Simon, who, with all his ability, was something of a twaddler, undertook the weighty business. His entreaties, being seconded by Law, the good-natured Regent gave his consent, leaving to Law's ingenuity to find the means to pay for it. The owner took security for the payment of the sum of two millions of livres within a stated period, receiving, in the mean time, the interest of five per cent. upon that amount, and being allowed, besides, all the valuable clippings of the gem. St. Simon, in his Memoirs, relates, with no little complacency, his share in this transaction. After describing the diamond to be as large as a greengage, of a form nearly round, perfectly white, and without flaw, and weighing more than five hundred grains, he concludes with a chuckle, by telling the world, "that he takes great credit to himself for having induced the Regent to make so illustrious a purchase." In other words, he was proud that he had induced him to sacrifice his duty, and buy a bauble for himself, at an extravagant price, out of the public money.

Thus the system continued to flourish till the commencement of the year 1720. The warnings of the Parliament, that too great a creation of paper money would, sooner or later, bring the country to bankruptcy, were disregarded. The Regent, who knew nothing whatever of the philosophy of finance, thought that a system which had produced such good effects could never be carried to excess. If five hundred millions of paper had been of such advantage, five hundred millions additional would be of still greater advantage. This was the grand error of the Regent, and which Law did not attempt to dispel. The extraordinary avidity of the people kept up the delusion; and the higher the price of Indian and Mississippi stock, the more billets de banque were issued to keep pace with it. The edifice thus reared might not unaptly be compared to the gorgeous palace erected by Potemkin, that princely barbarian of Russia, to surprise and please his imperial mistress: huge blocks of ice were piled one upon another; ionic pillars, of chastest workmanship, in ice, formed a noble portico; and a dome, of the same material, shone in the sun, which had just strength enough to gild, but not to melt it. It glittered afar, like a palace of crystals and diamonds; but there came one warm breeze from the south, and the stately building dissolved away, till none were able even to gather up the fragments. So with Law and his paper system. No sooner did the breath of popular mistrust blow steadily upon it, than it fell to ruins, and none could raise it up again.