famous imposter 14

famous imposter 14

There remains but the servant of the foreign Archbishop. It is to

him that we must look for any outrage on our normal beliefs. He was

manifestly a person of individually small importance--even Matthew

Paris whose trained work it was to record with exactness, and whose

duty it therefore was to sustain or buttress main facts, did not think

it necessary or worth while to mention his name. He had in himself

none of the dignity, honour, weight, learning or position of the

noble of the Church who was the Abbot’s guest. He was after all but

a personal servant; probably one of readiness and expediency with a

quick imagination and a glib tongue. One who could wriggle through a

difficult position, defend himself with ready acquiescence, gain his

ends of securing his master’s ease, and find all necessary doors open

through the bonhommie of his fellow servitors. Such an one accustomed

to the exigencies of foreign travel, must have picked up many quaint

conceits, legends and japes, and was doubtless a _persona grata_ liked

and looked up to by persons of his own class, sanctified to some little

extent by the reflected glory of his master’s great position. It is

more than likely that he had been the recipient of many confidences

regarding legend and conjecture concerning sacred matters, and that any

such legend as he spoke of would have been imparted under conditions

favourable to his own comfort. After the manner of his kind his

stories doubtless lost nothing in the telling and gained considerably

in the re-telling. Even in the short record of Matthew Paris, there

is evidence of this in the way in which, after the striking story of

Cartaphilus has been told, he returns to the matter again, adding

picturesque and inconclusive details of the manner of the centennial

renewal of the wanderer’s youth. The simplest analysis here will show

the falsity of the story; what the great logician Archbishop Whately

always insisted on--“internal evidence”--is dead against the Armenian

valet, courier, or servitor. He gave circumstantial account of the

periodic illness, loss of memory, and recovery of youth on the part

of Cartaphilus; but there is no hint of how he came to know it, and

Cartaphilus could not have told him, nor anybody else. We may, I think,

take it for granted that no other mere mortal was present, for, had any

other human being been there, all the quacksalvers of a thousand miles

around would have moved heaven and earth to get information of what was

going on, since in mediæval days there was nearly as much competition

in the world of charlatanism as there is to-day in the world of sport.

The Armenian was much too handy a man at such a crisis to be found out,

so we may give him the benefit of the doubt and at once credit him

with invention. It is hard to understand--or even to believe without

understanding--that so mighty a legend and one so tenacious of life,

arose and grew from such a beginning. And yet it is in accord with

the irony of nature that one who has unintentionally and unwittingly

achieved a publicity which would dwarf the malign reputation of

Herostratus should have his name unrecorded.

 

 

 

 

IV. JOHN LAW

 

THE MISSISSIPPI SCHEME AND ITS ANTECEDENTS

 

 

The great “Mississippi Scheme” which wrought havoc on the French in

1720 is the central and turning point in the history of John Law, late

of Lauriston, Controller-General of Finance in France. His father,

William Law (grand nephew of James Law, Archbishop of Glasgow) was a

goldsmith in that city.

 

As in the seventeenth century the goldsmiths were also the bankers and

moneylenders of the community, a successful goldsmith might be looked

on as on the highroad to great fortune. To William Law in 1671 was

born his first son John, who had considerable natural talent in the

way of mathematics--and a nature which was such as to nullify their

use. As a youth he showed proficiency in arithmetic and algebra, but

as he was also in those early days riotous and dissipated, we may

fairly come to the conclusion that he did not use his natural powers

to their best advantage. He was already a gambler of a marked kind.

Before he was of age he was already in debt and was squandering his

patrimony. He sold the estate of Lauriston which his thrifty father

had acquired, and gave himself over to a life of so-called pleasure.

His mother, who had family ambitions, bought the estate so that it

might remain in the family of its new possessors. He removed himself

to London where within a couple of years he was sentenced to death for

murder--not a vulgar premeditated murder for gain, but the unhappy

result of a duel wherein he had killed his opponent, a boon companion,

one Austin who had acquired the soubriquet of “Beau” Austin. Through

social influence the death penalty was commuted for imprisonment,

and the crime only regarded as manslaughter. He had however to deal

with the relatives of the dead man who were naturally vindictive. One

of them entered an appeal against the commutation of the sentence.

Law, with the characteristic prudence of his time and nationality,

did not wait for the leisurely settlement of the legal process, but

escaped to the continent where he remained for some years sojourning

in various places. Being naturally clever and daring he seems to have

generally fallen on his feet. Whilst in Holland he became secretary

to an important official in the diplomatic world, from which service

he drifted into an employment with the Bank of Amsterdam. Here the

natural bent of his mind found __EXPRESSION__. Banking in some of its

forms is gambling, and as he was both banker and gambler--one by

inherited tendency and the other by personal disposition--he began to

find his vogue, addressing himself seriously to the intricacies and

possibilities of the profession of banking. He was back in Scotland in

1701 (a risky venture on his part for his felony had not been “purged”)

and published a pamphlet, “_Proposals and Reasons for constituting a

Council of Trade in Scotland_.” This he followed up after some years,

with another pamphlet, “_Money and Trade considered, with a proposal

for supplying the Nation with Money_”; and in the same year (1709) he

propounded to the Scotch Parliament a scheme for a State Bank on the

security of land--a venture which on being tried speedily collapsed.

This, like other schemes of that period, was based on the issue and use

of paper money.

 

[Illustration: JOHN LAW]

 

In the meantime, and for five or six years afterwards, he was

travelling variously throughout Europe, occupying himself with

formulating successive schemes of finance, and in gambling--a process

in which he, being both skilled and lucky, amassed a sum of over a

hundred thousand pounds. He had varying fortunes, however, and was

expelled from several cities. He was not without believers in his

powers. Amongst them was the Earl of Stair, then Ambassador to France,

who allured by his specious methods of finance, suggested to the Earl

of Stanhope that he might be useful in devising a scheme for paying off

the British National Debt. After the death of Louis XIV, in 1715, he

suggested to the Duke of Orleans, the Regent for the young King (Louis

XV), the formation of a State Bank. The Regent favoured the idea, but

his advisers were against it; it was, however, agreed that Law might

found a bank with power to issue notes and accept deposits. This was

done by Letters Patent and the _Banque Générale_ came into existence in

1710, and was an immediate success. Its principle was to issue paper

money which was to be repayable by coin. Its paper rose to a premium

in 1716; in 1717 there was a decree that it was to be accepted in the

payment of taxes. This created a new form of cheap money, with the

result that there was a great and sudden extension of industry and

trade. From this rose the idea of a new enterprise--The Mississippi

Company--which was to outvie the success of the East India Company

incorporated by Charter in 1600 under the title of “The Governor and

Company of the Merchants of London trading to the East Indies,” which

after periods of doubtful fortune, and having become consolidated with

its rival “The General East India Company”--partially in 1702, and

completely in 1708, under the somewhat elephantine name of “The United

Company of Merchants of England trading to the East Indies”--was now

a vast organization of national importance. To the new French Company

for exploiting the Mississippi Valley was made over Louisiana (which

then included what were afterwards the States of Ohio and Missouri).

The Decree of Incorporation was issued in 1717. The Parliament at

Paris presently grew jealous of such a concession having been given

to a foreigner; and the next year a rumour went about that Parliament

was about to have him arrested, tried, and hanged. The Regent met

the parliamentary resistance by making (1718) the _Banque Générale_

into the _Banque Royale_--the King guaranteeing the notes. Law was

made Director General; but he was unable to prevent the Regent from

increasing the issue of paper money, by which means he managed to

satisfy dishonestly his own extravagance. It was a fiscal principle

of the time that the State accountants did not go behind the King’s

receipt--the _acquit de comptant_ as it was called.

 

The Western Company was enlarged in 1718 by a grant of a monopoly of

tobacco, and of the rights of trading ships and merchandise of the

Company of Senegal. In 1719, the _Banque Royale_ absorbed the rights of

the East India and China Companies, and then assumed the all-embracing

title of _Compagnie des Indes_. The next year it took in the African

Company; and so through that the whole of the non-European trade of

France. In 1719, the management of the Mint was handed over to Law’s

Company; and he was thus enabled to manipulate the coinage. In the

same year he had undertaken to pay off the French National Debt, and

so become the sole creditor of the Nation. He already exercised the

functions of Receiver General and had revenue-farming abolished in its

favour. He now controlled the collection and disposal of the whole of

the State taxation. At this stage of his adventure, Law seemed a good

fiscal administrator. He repealed or reduced pressing taxes on useful

commodities, and reduced the price of necessaries by forty per cent.

so that the peasants could increase the value of their holdings and

their crops without fear of coming later into the remorseless grip of

the tax-farmer under the infamous _metayer_ system. Free-trade was in

the Provinces practically established. This, so far as it went, was all

Law’s doing. Turgot, who later got credit for what had been done, only

carried out what the Scotch financier had planned.

 

Law had promised high dividends to the speculators in his scheme, and

had so far paid them; so it was no wonder that “The System” raised its

head again. In 1719-20, all France seemed to flock to Paris to such a

degree and with such unanimity of purpose, that it was difficult to

obtain room to go on with the necessary work of the Mississippi Scheme.

In such matters, resting on human greed which throws all prudence to

the winds, the pressure is always towards the centre; and the narrow

street of Quin cam poix became a seething mass, day and night, of

speculators in a hurry to buy shares. The time for trying to sell them

had not yet arrived.

 

Naturally such a locality rose in value, and as demand emphasises

paucity of space, extraordinary prices ruled. Even a small share in

the lucky street, where fortunes could be made in an hour, rose to

fabulous value. Houses formerly letting for forty pounds a year now

fetched eight hundred pounds per month. And no wonder, when shares of

the face value of five hundred livres sold for ten thousand! When there

is such an overwhelming desire to buy, then is the opportunity for

sellers to realise, and the time for such speculation on the one side,

and for such commerce on the other, is naturally short and the need

pressing.

 

At the beginning of 1720 everything seemed to be increasing in a sort

of geometric ratio. After a dividend of forty per cent. had been

declared, shares of five hundred value rose to eighteen thousand.

Greed, and the opportunity for satisfying its craving, turned the

heads of ordinarily sensible people. The whole world seemed mad. It

appeared right enough that the financial wonder-worker who had created

such a state of things should be loaded with additional honours. It

was only scriptural that he who had already multiplied his talents

should be entrusted with more. There was universal rejoicing when

John Law--exiled foreigner and condemned murderer--was appointed, in

January, 1720, Controller-General of the whole finances of France.

Naturally enough, even the hard head of the canny Scot began to

manifest symptoms of giving way in the shape of becoming _exalté_. And

naturally enough his enemies--financial, political and racial--did not

lose the opportunities afforded them of taking advantage of it. Tongues

began to wag, and all sorts of rumours, some of them reconcilable with

common sense and easily credible, others outrageous, began to go about.

Lord Stair reported that Law had boasted that he would raise France on

the ruins of England and Holland, to a greater height than she had ever

reached; that he could crush the East India Company and even destroy

British trade and credit when he chose. Stair resented this, and he and

Law from being close friends became enemies. To appease the incensed

and at present all-powerful Law, the powers that were recalled Lord Stair.