LAW OF LAWRISTON.

Otago Witness, Issue 2319, 11 August 1898, Page 55

LAW OF LAWRISTON.

His Schemes and Their Results.

Voltaire's lively description of Johu Law, who introduced the joint-stock system into France in the " Sieole de Louirf XV," is only too brief. " A Scotsman called John Law," he says, " who had no other occupation than that of being a high player and a great calculator, being obliged to flee from Great Britain for a minder, had long conceived the plaa of a company which should pay in notes the debts of a State and should reimburse itself by the profits. He first established a bank in his own name in 1716. It soon became a general bureau for the revenues of the kingdom, and to it was joined a Mississippi company, from which the company was led to expect great profits. The public, seduced by the greed of gain, made haste to buy ' avec fureur' the shares of the united company and bank. Riches, hitherto locked up by mistrust, circulated profusely; the notes doubled and quadrupled these riches. France was 'en effet ' very rich by means of credit." Professor Nicholson's essay, in his " Money and Monetary Problenis,"*adds some details fro*/) which the stupendous dimensions of this outburst of speculation may perhaps be realised by the imagination : —

"A milliner happened to come to Paris about a lawsuit; she was successful, and in-\e-sted the proceeds in speculation, and she amassed in a few months a sum which converted into our currency represents nearly £5,000,000 sterling. " No class of the community escaped the infection. Two of the ablest scholars of France are re^ J ported to have deplored the madness of the times at one interview, only to find themselves at their next meeting bidding for shares with the greatest excitement. The scene of operations was a narrow street called Quincampoix, and the demand for accommodation may be judged from the fact that a house which before yielded about £40 a year now brought in more' than £800 a month. A cobbler made about £10 a day by letting out a few chairs in his stall ; and a hunchback who is celebrated in the prints of the time acquired in a few days more than £<000 by letting out his hump to the street brokers as a writing desk."

In the meantime, of course, Law was rising to the highest offices. "He was seen," says Voltaire, "in a short time to turn from Scotsman into Frenchman by naturalisation ; from Protestant to Catholic (Professor Nicholson adds that Abbo Tencin, who effected Law's conversion, received for payment shares to the nominal value of about £10,000) ; from adventurer into lord of most beautiful estates ; and from banker into Ministre d'Etat. I have seen him arrive in the halls of the Palais Royal, followed by dukes and peers, marshals of France, and bishops."

This extraordinary boom lasted four years, and then, as our historian tells us, "le credit tomba tout dun coup. Un ne vit plus que dv papier ; une misere reelle commencait a succeder a tant de richesses fictices. ' ' It would be difficult to find a mare expressive sentence than this of Voltaire's but some more details from Professor Nicholson- may serve to show what a panic on a' great scale really means. "A few weeks- before, the streets were crowded with throngs of people eager to obtain new issues of shares and indulge in the wildest speculation. Money was- abundan 1 - and the consumption of wealth most extravagant. Now the approaches to the bank were packed with people driven by hunger and misery to try to exchange their bits of paper, often the reward of hard work, for money with which they might obtain the means of life. On one occasion, on a hot dark night in July, about 15,000 people were wedged in the narrow streets about the bank. When the day broke it was found that 15 persons had been crushed to death and trampled upon. This scene, dreadful as it is, perhaps hardly strikes the imagination with such horror as the discovery" in the middle of December, of a house' in aa hich the husband had killed his wife and children and Ironed himself through destitution, whilst in the very room was found, with two or three halfpence, 200,000 1 ivies of bank notes, which at one time wuulu hare been woith £10,000 sterling." It was a terrible cinsh, but Voltaire, who witnessed it, appends an interesting little no te:— "Men will speak," he says, "with astonishment in those times of madness, and of that public pest ; but how insignificant it is in comparison w ith the civil and religious wars which have so long bathed Europe in blood, and the wars between ncople and people, or rather between Prince and Prince, which lay &o many countries waste! '— Cornhill Magazine.