of Mme de Montespan to poison Louis XIV. and of other crimes, planned by personages who could not be attacked without scandal which touched the throne, caused Louis XIV. to close the chambre ardente, as the court was called, on the 1st of October 1680. It was reopened on the 19th of May 1681 and sat until the 21st of July 1682. Many of the culprits escaped through private influence. Among these were Marie Anne Mancini, duchesse de Bouillon, who had sought to get rid of her husband in order to marry the duke of Vendôme, though Louis XIV. banished her to Nérac. Mme de Montespan was not openly disgraced, because the preservation of Louis’s own dignity was essential, and some hundred prisoners, among them the infamous Guibourg and Lesage, escaped the scaffold through the suppression of evidence insisted on by Louis XIV. and Louvois. Some of these were imprisoned in various fortresses, with instructions from Louvois to the respective commandants to flog them if they sought to impart what they knew. Some innocent persons were imprisoned for life because they had knowledge of the facts. La Voisin herself was executed at an early stage of the proceedings, on the 20th of February 1680, after a perfunctory application of torture. The authorities had every reason to avoid further revelations. Thirty-five other prisoners were executed; five were sent to the galleys and twenty-three were banished. Their crimes had furnished one of the most extraordinary trials known to history.
See F. Ravaisson, Archives de la Bastille, vols. iv.-vii. (1870–1874); the notes of La Reynie, preserved in the Bibliothèque Nationale; F. Funck-Brentano, Le Drame des poisons (1899); A. Masson, La Sorcellerie et la science des poisons au XVII e siècle (1904). Sardou made the affair a background for his Affaire des poisons (1907). There is a portrait of La Voisin by Antoine Coypel, which has been often reproduced.
LAW, JOHN (1671–1729), Scots economist, best known as the originator of the “Mississippi scheme,” was born at Edinburgh in April 1671. His father, a goldsmith and banker, bought shortly before his death, which took place in his son’s youth, the lands of Lauriston near Edinburgh. John lived at home till he was twenty, and then went to London. He had already studied mathematics, and the theory of commerce and political economy, with much interest; but he was known rather as fop than scholar. In London he gambled, drank and flirted till in April 1694 a love intrigue resulted in a duel with Beau Wilson in Bloomsbury Square. Law killed his antagonist, and was condemned to death. His life was spared, but he was detained in prison. He found means to escape to Holland, then the greatest commercial country in Europe. Here he observed with close attention the practical working of banking and financial business, and conceived the first ideas of his celebrated “system.” After a few years spent in foreign travel, he returned to Scotland, then exhausted and enraged by the failure of the Darien expedition (1695–1701). He propounded plans for the relief of his country in a work[1] entitled Money and Trade Considered, with a Proposal for supplying the Nation with Money (1705). This attracted some notice, but had no practical effect, and Law again betook himself to travel. He visited Brussels, Paris, Vienna, Genoa, Rome, making large sums by gambling and speculation, and spending them lavishly. He was in Paris in 1708, and made some proposals to the government as to their financial difficulties, but Louis XIV. declined to treat with a “Huguenot,” and d’Argenson, chief of the police, had Law expelled as a suspicious character. He had, however, become intimately acquainted with the duke of Orleans, and when in 1715 that prince became regent, Law at once returned to Paris.
The extravagant expenditure of the late monarch had plunged the kingdom into apparently inextricable financial confusion. The debt was 3000 million livres, the estimated annual expenditure, exclusive of interest payments, 148 million livres, and the income about the same. The advisability of declaring a national bankruptcy was seriously discussed, and though this plan was rejected, measures hardly less violent were carried. By a visa, or examination of the state liabilities by a committee with full powers of quashing claims, the debt was reduced nearly a half, the coin in circulation was ordered to be called in and reissued at the rate of 120 for 100—a measure by which foreign coiners profited greatly, and a chamber of justice was established to punish speculators, to whom the difficulties of the state were ascribed. These measures had so little success that the billets d’état which were issued as part security for the new debt at once sank 75% below their nominal value. At this crisis Law unfolded a vast scheme to the perplexed regent. A royal bank was to manage the trade and currency of the kingdom, to collect the taxes, and to free the country from debt. The council of finance, then under the duc de Noailles, opposed the plan, but the regent allowed Law to take some tentative steps. By an edict of 2nd May 1716, a private institution called La Banque générale, and managed by Law, was founded. The capital was 6 million livres, divided into 1200 shares of 5000 livres, payable in four instalments, one-fourth in cash, three-fourths in billets d’état. It was to perform the ordinary functions of a bank, and had power to issue notes payable at sight in the weight and value of the money mentioned at day of issue. The bank was a great and immediate success. By providing for the absorption of part of the state paper it raised the credit of the government. The notes were a most desirable medium of exchange, for they had the element of fixity of value, which, owing to the arbitrary mint decrees of the government, was wanting in the coin of the realm. They proved the most convenient instruments of remittance between the capital and the provinces, and they thus developed the industries of the latter. The rate of interest, previously enormous and uncertain, fell first to 6 and then to 4%; and when another decree (10th April 1717) ordered collectors of taxes to receive notes as payments, and to change them for coin at request, the bank so rose in favour that it soon had a note-issue of 60 million livres. Law now gained the full confidence of the regent, and was allowed to proceed with the development of the “system.”
The trade of the region about the Mississippi had been granted to a speculator named Crozat. He found the undertaking too large, and was glad to give it up. By a decree of August 1717 Law was allowed to establish the Compagnie de la Louisiane ou d’Occident, and to endow it with privileges practically amounting to sovereignty over the most fertile region of North America. The capital was 100 million livres divided into 200,000 shares of 500 livres. The payments were to be one-fourth in coin and three-fourths in billets d’état. On these last the government was to pay 3 million livres interest yearly to the company. As the state paper was depreciated the shares fell much below par. The rapid rise of Law had made him many enemies, and they took advantage of this to attack the system. D’Argenson, now head of the council of finance, with the brothers Paris of Grenoble, famous tax farmers of the day, formed what was called the “anti-system.” The farming of the taxes was let to them, under an assumed name, for 4812 million livres yearly. A company was formed, the exact counterpart of the Mississippi company. The capital was the same, divided in the same manner, but the payments were to be entirely in money. The returns from the public revenue were sure; those from the Mississippi scheme were not. Hence the shares of the latter were for some time out of favour. Law proceeded unmoved with the development of his plans. On the 4th of December 1718 the bank became a government institution under the name of La Banque royale. Law was director, and the king guaranteed the notes. The shareholders were repaid in coin, and, to widen the influence
- ↑ A work entitled Proposals and Reasons for constituting a Council of Trade in Scotland was published anonymously at Edinburgh in 1701. It was republished at Glasgow in 1751 with Law’s name attached; but several references in the state papers of the time mention William Paterson (1658–1719), founder of the Bank of England, as the author of the plan therein propounded. Even if Law had nothing to do with the composition of the work, he must have read it and been influenced by it. This may explain how it contains the germs of many of the developments of the “system.” Certainly the suggestion of a central board, to manage great commercial undertakings, to furnish occupation for the poor, to encourage mining, fishing and manufactures, and to bring about a reduction in the rate of interest, was largely realized in the Mississippi scheme. See Bannister’s Life of William Paterson (ed. 1858), and Writings of William Paterson (2nd ed., 3 vols., 1859).
