smith's shop, and purchased the whole collection of articles exposed for sale at 400,000 livres.

Up to this time, Law's system had produced nothing but the most wonderful outward prosperity; and when the state of the nation was compared with what it had been at the death of Louis XIV., it appeared that the man to whose exertions the change was owing could be nothing less than a demigod. Money circulated in profusion, people in the lowest ranks indulged in luxuries previously unattainable, and the price of commodities rose without any injury to the people. The ell of cloth which had sold for fifteen livres, now sold for fifty; and the pound of coffee rose from fifty sols to eighteen livres. Wages rose correspondingly. In the course of three months, the silversmiths of Paris had received orders for, and manufactured above £7,000,000 worth of plate. Paris was crowded with foreign visitors, who had come to speculate in the stocks. No fewer than 305,000 strangers are said to have been living in Paris in November 1719, and many of these were obliged to live in granaries and lofts, there not being sufficient house-accommodation for them all. The promenaders in the streets were clothed in velvet and gold; and the winter of 1719-20 was more brilliant than the finest summer ever seen before.

Law was now the idol of the country, and the enthusiasm in his favour was greatly increased by his making a public profession of the Roman Catholic religion in December 1719. The only obstacle to his admission to political dignity being thus removed, he was declared comptroller-general of the finances in January 1720, a situation equivalent to that of prime minister of France. About the same time the Academy of Sciences elected him an honorary member. Honours and applauses were showered upon him; and, among the rest, the poets, "a venal gang," vied with each other in preparing compliments for the saviour of France. It was to be expected that the man who was enriching others by his scheme would grow wealthy himself; accordingly, Law is known to have realised an enormous fortune. He had purchased fifteen or sixteen large estates, together with houses and mansions, amounting altogether to the value of 7,000,000 livres. It is to be remarked, however, as a proof of Law's good faith and his confidence in his own system, that he invested all his money in landed property in France, which, in the event of a crash, would be completely lost to him, and did not send any sums out of the country, as he might easily have done. appears, indeed, that he wished to purchase the estate of Errol in Perthshire; but the bargain was never concluded. His generosity was equal to his wealth. On the occasion of his professing himself a Roman Catholic, he gave 500,000 livres to assist in completing the church of St Roch; he distributed another sum of 500,000 livres among the English at St Germain-en-Laye, whose pensions had been suppressed; and his private liberalities were

It

constant and munificent. Lauded and spoken of all over Europe, Scotland began to be proud of him, and contrived to let it be known that it was she who had given birth to such a genius. The city of Edinburgh transmitted him its freedom in a gold box. English and Scottish noblemen boasted of being acquainted with Mr Law; and it is even said that George II., then Prince of Wales, condescended to dabble secretly in the Mississippi stock.

The bubble, however, was already full-blown. The credit of the bank and of the India Company was at its height in the months of November and December 1719, and January 1720, when shares in the Company were selling at 10,000 livres each. Such was the abundance of money in the bank, that it offered to lend sums of any amount, on proper security, at an interest of only 2 per cent. Now, however, a drain of specie from the bank began to be discernible. Numbers of persons possessed of stock in the Company-either foreseeing disaster, or haunted with a vague suspicion that so prosperous a state of things could not last long-began to sell out, and convert their shares into gold and silver, and other precious commodities, which they either hoarded up, or sent secretly out of the country. The Prince de Conti, offended at being refused a quantity of fresh shares, for which he petitioned, sent to the bank to demand specie for so enormous à mass of notes that three wagons were required to carry the money from the bank to his house. Vernesobre de Laurieu, a Prussian, whom Mr Law had appointed a cashier in the bank, remitted nearly 40,000,000 livres to foreign countries, and then disappeared. Various stock-jobbers remitted hundreds of thousands of louis-d'ors to England. These examples were imitated by others; for nothing is more contagious than fear; and in a short time 500,000,000 livres in specie were sent out of France.

To put a stop to this run upon the bank, which, from the immense quantity of notes in circulation, would be ruinous, a series of edicts were issued by the regent in February and March 1720. By these edicts payments in specie were restricted to small sums (not exceeding 100 livres in gold and 10 livres in silver), while at the same time efforts were made to secure & preference for paper over specie, by declaring the value of the former to be invariable, while that of the latter fluctuated. People were also prohibited from converting their wealth into gold and silver plate without a royal license, the demand for plate having been one of the principal means of withdrawing the precious metals from circulation. The exertions thus made were for some time effectual; and numbers, seeing notes passing current at 5 or 10 per cent. above specie, hastened to convert all the specie in their possession into paper. There is, however, in the minds of men at such a time, a natural preference for the metals over paper; and accordingly, it was found that many

were busy in secret hoarding up gold and silver, and cautiously disposing of their paper in anticipation of the coming crash. Fresh edicts of a more stringent and arbitrary character were issued; one forbidding the use of specie altogether in payment, another forbidding any person to have in his possession more than 500 livres of coin, under the penalty of having the sum confiscated, and the payment of a fine in addition.

In an instant-so suddenly, in fact, that it is impossible to trace the steps of the process-the nation, which had been glorying in its good fortune, was struck with dismay and despair. The use of specie had been prohibited; but this could not restore confidence in Law's paper, and nobody would accept it willingly. It was felt universally that Law's scheme had been a bubble, and that it had now burst. Complaints and execrations arose everywhere against Law, the regent, and all who had been concerned in originating the project. To crown Law's misery, many of the influential men of France, who had all along hated him, and been envious of his honour and reputation, but who had been restrained from showing their ill-will by his success, now attacked him in the presence of the regent, and accused him of plotting the ruin of France. The regent even, who had hitherto been his intimate friend, and in compliance with whose solicitations Law had adopted some of his most questionable measures, turned against him.

All efforts to arrest the progress of the panic were in vain. In consequence of the decree ordering all payments to be made in paper, a fresh issue of notes had taken place; and in May 1720, the notes issued amounted to 2,600,000,000 livres, while the quantity of specie in the kingdom was estimated at 1,300,000,000, or only half as much. To equalise the paper with the specie, there were two plans; either to double the value of the specie, or to halve the value of the paper. Law advised the former, as being a thing to which the people were quite accustomed; but his advice was overruled; and on the 21st of May an edict was published, reducing the value of the paper by a gradual process, till it should be exactly half its present value-a note for 10,000 livres passing current for only 5000, and so on. This reduction of the value of the bank-notes was, it will be remembered, a violation of the original constitution of Law's bank, according to which it was faithfully promised that the notes should never fluctuate in value, but be always equal to a given quantity of specie of given fineness. If paper had been disliked before, the promulgation of this edict made matters a thousand times worse. Bank-notes were regarded as waste paper; and a person might have starved with 100,000 livres of paper-money in his pocket. On the 27th of May, the bank stopped payment in specie; and on the same day Law was dismissed from his office as minister of finance. There were riotings and mobbings in the streets; and the various quarters of Paris were occupied by

troops, to prevent an insurrection from bursting out. Law's life was several times in danger; the regent was under the necessity of giving him a detachment to guard his person, as he drove through the streets; and at length, not safe in his own house, he took refuge in the Palais-Royal.

D'Aguesseau, who had been dismissed from the ministry in 1718, on account of his opposition to Law's projects, was now recalled; and by his advice a decree was passed on the 1st of June, repealing the decree forbidding the amassing of specie. In order to assist in absorbing the immense mass of paper-money, an issue of 25,000,000 bank-notes took place, on the security of the revenues of the city of Paris, and bearing an interest of 2 per cent. The notes which this new issue was to be the means of withdrawing, were to be publicly burnt. On the 10th of June, the bank was re-opened for the payment of small notes -notes of 10 livres and a little upwards. As almost all the population of Paris rushed to the bank to exchange their small notes for specie, the avenues to the building were blocked up, and hardly a day passed in which five or six persons were not crushed to death and trampled under foot. Silver becoming scarce, the bank was obliged to cash the notes in copper; and persons might be seen toiling along with immense loads of copper-money, which they had procured in exchange for notes-glad, however, that they had got anything at all. As the old notes did not come in so fast in exchange for the new ones as was expected, fresh measures were adopted to attract them. Upwards of 30,000,000 of perpetual annuities, and 4,000,000 of life annuities were created, purchasable by notes; and if the people had responded to the invitation, and purchased the annuities, about 2,000,000,000 of the notes would have been retired in this way; but notwithstanding the eagerness that prevailed to get rid of the notes, the terms of the offer were so unfavourable that people still hesitated, and preferred keeping the notes, and taking the chance of what might yet occur. To counteract this hesitation, a decree was published on the 15th of August, declaring that all notes of 10,000 or of 1000 livres should have no currency except in the purchase of the annuities; but as the hesitation still continued, another decree was passed, declaring that notes would be good for no purpose whatever after the 1st of November 1720. Numbers, however, kept their notes even after the specified time, in the vain hope of better terms; and the consequence was, that large quantities of Law's notes remained in houses as family lumber, down even to the date of the French Revolution, when they were produced as curiosities, to be compared with the assignats.

For a while it was imagined that the India Company would still survive, and proceedings were adopted with a view to this end. It was proposed to invest the Company with new privileges; the number of shares was extended; a list of the original

proprietors of stock was ordered to be made out, and such as still retained their shares were required to deposit them with the Company, so that they might not be able to dispose of them; while those who had sold the whole or part of their shares were required to purchase as many as they had sold, at the rate of 13,500 livres each share, so that matters might be restored to their original footing. This last clause created great alarm among the stock-jobbers, who had made fortunes by getting rid of their shares in time, and were now in this way compelled to refund, and to connect themselves with a scheme which had lost all its reputation. Hundreds prepared to quit the country rather than submit; and to prevent this, an edict was passed on the 29th of October, prohibiting any person from leaving the kingdom, without express permission from the regent, under pain of death. These compulsory measures could not restore credit to the Company; the shares fell till their value was only a hundredth part of what it had been; and at length the management of the Mint, and the administration of the revenues, having been taken out of the Company's hands, it was degraded to a mere trading body.

Such was the end of the famous Mississippi bubble, by which a few individuals acquired large fortunes, while thousands of families were ruined, and the nation sustained a shock which it did not recover for many years.

Law obtained leave to quit France, where his life was not safe. Declining a sum of money which the regent offered him, he proceeded to Brussels, almost a beggar; his sole property being a diamond worth about £5000. He had invested all his enormous fortune in the purchase of French lands and securities, and these were confiscated the moment he left the country, not excepting an annuity which he had purchased on the lives of his wife and children. After travelling through various parts of the continent, he returned to England, where he resided four years, supporting himself by his talents for gambling. He died at Venice in 1729, in very embarrassed circumstances. His descendants formed alliances with many good families both in England and France.

THE SOUTH SEA SCHEME.

THE South Sea Company was founded by the celebrated statesman Harley, Earl of Oxford, in 1711, for political purposes; and so much admired was the ingenuity of the scheme, that it was called "The Earl of Oxford's Masterpiece." The Company, which consisted of merchants, undertook the payment of a large quantity of government debt, amounting to £10,000,000 sterling; and