providing for the payment of the interest amounting to 80,000,000 of livres, or about one half of the revenue, there hardly remained a sum sufficient to defray the ordinary expenses of the civil government, and that too, after having had recourse to a measure tantamount, in its effects at least, to a breach of faith, namely, a change in the nominal value of the currency. By the latter scheme, the govern ment foolishly imagined that they would pocket 200,000,000 of livres, but the sum on which they had calculated only went into the pockets of the Dutch and the clandestine money-dealers. At this critical juncture, Law stepped forward in the full confidence of being yet able to rescue the government from bankruptcy, by the establishment of a well-regulated paper-credit. His first proposal was to establish a national bank, into which was to be transferred all the metallic currency of the nation, which was to be replaced by bank-notes. Law regarded the whole nation as one grand banking-company, and his reasoning was this: -If a bank may increase the issue of its notes beyond the amount of its funds in bullion, without risking its solvency, a nation may also do the same."

Notwithstanding the imperfect ideas of a representative currency indicated here, they were based on principles which have since proved a source of many beneficial results. The objections to the plan were founded for the most part on ignorant, and even puerile misconception of the system of banking which Law had devised. The memoirs which he addressed to the Regent on the subject, contain many just observations on the peculiar facilities afforded to trade by the existence of a paper-currency. But they failed to remove the doubts of influential opponents. One

sapient objector, in particular, thought a paper-currency highly dangerous, on account of its liability to being cut or violently destroyed! The council of finance, accordingly, rejected this scheme, conceiving the present conjuncture was not favourable for the undertaking.

"Law next proposed a private bank for the issue of notes, the funds of which should be furnished entirely from his own fortune and that of others who might be willing to engage with him in the speculation. He represented the disastrous consequences which had resulted from a fluctuating currency, the enormous rate at which discounts were effected, the difficulties in the exchange between Paris and the provinces, and the general want of an increased currency; and succeeded in convincing the Regent that these evils might be obviated by the adoption of his plans even in their limited modification. The bank was accordingly established by letters patent, bearing date the 2nd of May, 1716. Its capital was fixed at 1200 shares of 5000 livres each, or about £300,000 sterling. The notes were payable at sight in specie of the same weight and fineness as the money in circulation at the period of their issue; and hence they soon bore a premium above the metallic currency itself, which had been subjected to many violent alterations since 1689. The good faith which the bank observed in its proceedings,-the patronage which it received from the Regent,-and the want of private credit, soon procured for it a vast run of business. Had Law confined his attention to this single establishment, he would justly have been considered as one of the greatest benefactors of the country, and the creator of a valuable system of commercial finance; but the vastness of his

own conceptions, his boundless ambition, and the unlimited confidence which the public now reposed in him, suggested more gigantic enterprizes, and led the way to that highly forced and unnatural system of things which eventually entailed ruin upon all connected with it..

"Law had always entertained the idea of uniting the operations of banking with those of commerce. Every one knows that nothing can be more hazardous than such an attempt; for the credit of the banker cannot be made to rest upon the uncertain guarantee of commercial speculations. But the French had yet no accurate ideas on this subject. Law's confidence in the resources of his own financial genius was unbounded, and the world at this moment exhibited a theatre of tempting enterprise to a comprehensive mind. The Spaniards had established colonies around the gulf of Mexico, -the English were in possession of Carolina and Virginia,-and the French held the vast province of Canada. Although the coast lands of North America were already colonized, European enterprize had not yet penetrated into the interior of this fertile country; but the Chevalier de Lasalle had descended the Mississippi to the gulf of Mexico, and, taking possession of the country through which he passed in the name of the French monarch, gave it the appellation of Louisiana. A celebrated merchant of the name of Crozat had obtained the privilege of trading with this newly discovered country, and had attempted, but without success, to establish a colony within it. Law's imagination, however, was fired at the boundless field of enterprise which he conceived was here presented; he talked of its beauty, of its fertility, of the abundance and rarity of its produce,

of the richness of its mines outrivalling those of Mexico or Peru, and in the month of August, 1717, within five months after his embarkation in the scheme of the bank, our projector had placed himself, under the auspices of the Regent, at the head of the famous Mississippi scheme, or West Indian company. This company was invested with the full sovereignty of Louisiana, on condition of doing homage for the investiture to the king of France, and presenting a crown of gold, of thirty marcs, to each new monarch of the French empire on his accession to the throne. It was authorised to raise troops, to fit out ships of war, to construct forts, institute tribunals, explore mines, and exercise all other acts of sovereignty. The king made a present to the company of the vessels, forts, and settlements which had been constructed by Crozat, and gave it the monopoly of the beaver trade with Canada for twentyfive-years."

Much evil resulted from this injudicious admixture of incompatible aims; but still more from political jealously and rivalry, and from the unrestrained system of jobbing and literal gambling in the funds, as so recently occurred while railway schemes were at the height of popular favour in our own country. "The immense fortunes which were realized by stock-jobbing at the very outset of the scheme, led on others to engage in similar speculation; splendid fortunes were realized in the course of a single day; men found themselves suddenly exalted as if by the wand of an enchanter, from the lowest station in life to the command of princely fortunes; twelve hundred new equipages appeared on the streets of Paris in the course of six weeks; half a million of people hastened from the country,

and even from distant kingdoms, to procure shares in the Indian company; and happy was he who held the greatest number of these bubbles. The negotiations for the sale and purchase of shares were at first carried on in the Rue Quincampoix, where fortunes were made by letting lodgings to the crowds who hastened thither for the purpose of speculating in the stocks. The murder of a rich stockjobber, committed there on the 22nd of March, 1720, by a young Flemish nobleman, occasioned the proscription of that street as a place of business, and the transference of the stock-jobbing to the Place Vendome, and finally to the hotel de Soissons, which Law is said to have purchased from the prince of Carignan for the enormous sum of 1,400,000 livres."

Innumerable anecdotes are on record of the extraordinary vicissitudes of fortune which took place during this season of marvellous excitement; footmen stepped from the back to the inside of carriages; cooks appeared at the public places with diamond necklaces; butlers started their berlins; and men educated in poverty and of the lowest rank suddenly exchanged the furniture and utensils of their apartments for the richest articles which the upholsterer and silversmith could furnish. Law himself, now arrived at the height of his prosperity, shone pre-eminent above all the other attractions of the day. Princes, dukes, marshals, prelates, flocked to his levees, and counted themselves fortunate if they could obtain a smile from the great dispenser of fortune's favours; peeresses of France, in the excess of their adulations, lavished compliments upon the Scottish adventurer which set even decency at defiance; his daughter's hand was solicited by princes;