Memoirs of Popular Delusions Vol 1 | Page 8

a sympathy for the weak, were
indignant that so much severity should be used to so little purpose.
They did not see the justice of robbing one set of rogues to fatten
another. In a few months all the more guilty had been brought to
punishment, and the chamber of justice looked for victims in humbler
walks of life. Charges of fraud and extortion were brought against
tradesmen of good character, in consequence of the great inducements
held out to common informers. They were compelled to lay open their
affairs before this tribunal in order to establish their innocence. The
voice of complaint resounded from every side, and at the expiration of
a year the government found it advisable to discontinue further
proceedings. The chamber of justice was suppressed, and a general
amnesty granted to all against whom no charges had yet been preferred.
In the midst of this financial confusion Law appeared upon the scene.

No man felt more deeply than the Regent the deplorable state of the
country, but no man could be more averse from putting his shoulders
manfully to the wheel. He disliked business; he signed official
documents without proper examination, and trusted to others what he
should have undertaken himself. The cares inseparable from his high
office were burdensome to him; he saw that something was necessary
to be done, but he lacked the energy to do it, and had not virtue enough
to sacrifice his case and his pleasures in the attempt. No wonder that,
with this character, he listened favourably to the mighty projects, so
easy of execution, of the clever adventurer whom he had formerly
known, and whose talents he appreciated.
When Law presented himself at court, he was most cordially received.
He offered two memorials to the Regent, in which he set forth the evils
that had befallen France, owing to an insufficient currency, at different
times depreciated. He asserted that a metallic currency, unaided by a
paper money, was wholly inadequate to the wants of a commercial
country, and particularly cited the examples of Great Britain and
Holland to show the advantages of paper. He used many sound
arguments on the subject of credit, and proposed, as a means of
restoring that of France, then at so low an ebb among the nations, that
he should be allowed to set up a bank, which should have the
management of the royal revenues, and issue notes, both on that and on
landed security. He further proposed that this bank should be
administered in the King's name, but subject to the control of
commissioners, to be named by the States-General.
While these memorials were under consideration, Law translated into
French his essay on money and trade, and used every means to extend
through the nation his renown as a financier. He soon became talked of.
The confidants of the Regent spread abroad his praise, and every one
expected great things of Monsieur Lass. [The French pronounced his
name in this manner to avoid the ungallic sound, aw. After the failure
of his scheme, the wags said the nation was lasse de lui, and proposed
that he should in future be known by the name of Monsieur Helas!]
On the 5th of May, 1716, a royal edict was published, by which Law

was authorised, in conjunction with his brother, to establish a bank,
under the name of Law and Company, the notes of which should be
received in payment of the taxes. The capital was fixed at six millions
of livres, in twelve thousand shares of five hundred livres each,
purchasable one-fourth in specie and the remainder in billets d'etat. It
was not thought expedient to grant him the whole of the privileges
prayed for in his memorials until experience should have shown their
safety and advantage.
Law was now on the high road to fortune. The study of thirty years was
brought to guide him in the management of his bank. He made all his
notes payable at sight, and in the coin current at the time they were
issued. This last was a master-stroke of policy, and immediately
rendered his notes more valuable than the precious metals. The latter
were constantly liable to depreciation by the unwise tampering of the
government. A thousand livres of silver might be worth their nominal
value one day and be reduced one-sixth the next, but a note of Law's
bank retained its original value. He publicly declared at the same time
that a banker deserved death if he made issues without having sufficient
security to answer all demands. The consequence was, that his notes
advanced rapidly in public estimation, and were received at one per
cent. more than specie. It was not long before the trade of the country
felt the benefit. Languishing commerce began to lift