The Great Events by Famous Historians [Volumes 1-14]

The profits from commerce and its future success might soon enable it to increase this dividend. According to the prevailing rates of interest, which had fallen to 3 per cent. since the establishment of the bank, this was a sufficient remuneration on the shares. They had, besides, the hope of increasing their capital. The shares having, in fact, doubled in value during the opposition of the "Antisystem," they ought to increase still more rapidly since they were relieved from this opposition. The expectation that the fifteen or sixteen hundred millions of the debt would be invested in the shares was well founded. There was even a certainty of it; for this immense capital, forcibly expelled from its investment in state securities, could find no other place for investment than in the company.

This plan of Law's was vast and bold. Its success would liquidate the state debt and diminish the annual charges on the treasury, reducing the interest from eighty millions to forty-five or forty-eight millions. The annual charges from which the treasury was to be relieved were to be paid from the profits on the collection of the revenue and the contingent profits of commerce. The whole operation was to pay the creditors of the state 3 per cent. per annum, and the profits and monopolies heretofore granted to farmers of the revenue and commercial companies. This 3 per cent. interest, these profits, and these monopolies, as we shall soon see, might easily amount to the sum of eighty millions annually, which the creditors were formerly paid. Thus far they were not defrauded by this forced conversion of securities; a credit entirely new was substituted for one which was worn out; an establishment had been created, which, combining the functions of a commercial bank and the administration of the finances, must become the most colossal financial power ever known.

The first subscription having been taken up in a few days, Law opened a new one on September 28th, for the same amount and on exactly the same conditions as the preceding.

The eagerness of subscribers was the same. The creditors passed whole days at the offices of the treasury to obtain their receipts, and there were some even who had their meals brought to them there, so that they might not lose their turn in the ranks. The state notes were, of course, much in demand, and had rapidly risen to par. They had even given rise to a most reprehensible speculation. A confidential clerk of Law, the Prussian Versinobre, having known in advance of the decree regarding the payment, abused his knowledge of the secret, and caused to be bought by brokers with whom he was associated a large amount of state notes at 50 or 60 per cent. below their nominal value, and employed them for the subscriptions when they were received at par. When it is considered that the subscriptions, already, were sold at a large advance, and that by means of the state notes they were bought at about half price, it will be understood what a profit this company of brokers must have realized.

Those who intended to subscribe had accomplished comparatively little by obtaining receipts or state notes; it was still necessary to go to the Hôtel de Nevers, where the subscriptions were received. The entrances there were crowded to suffocation. The hall servants made considerable sums by subscribing for those who could not get through the crowd to the offices. Some adventurers, assuming the livery of Law, performed this service, charging and obtaining a very large fee. The most humble employees of the company became patrons who were very much courted. As to the higher officers and Law himself, they received as much adulation as if they were the actual dispensers of the favors of Fortune. The approaches to Law's residence were encumbered with carriages. All that was most brilliant among the nobility of France came to beg humbly for the subscriptions, which were already much above the nominal price of shares, and which were sure to rise much higher. By a clause creating the company, the ownership of the shares entailed nothing derogatory to rank. The nobility, therefore, could indulge in this speculation without endangering its titles. It was as much in debt as the King, thanks to its prodigality and the long wars of that century, and it sought to win, at least, the amount of its debt by fortunate speculations. It surrounded, it fawned upon Law, who, very anxious to gain partisans, reserved very few shares for himself, but distributed them among his friends of the court.