John Law and The Mississippi Bubble

John Law and The Mississippi Bubble

Author: Thiers, Adolphe

Cost: $7.99


Format: PDF

Notes

The Dutch Tulip Bubble may be remembered as the first great investment mania, and the SouthSea Bubble in England may be better known for its political shenanigans and associated corruption, but it is the Mississippi Bubble in France which provides a better example of an all-embracing credit bubble and its typical consequences. Adolphe Thiers provided an early and lucid account of the development of John Law's "system" beginning with that scotsman's observations and the economic predicament of France, and then showing step-by-step the transformation of the Kingdom's finances - at first a blessing, but eventually no more than a prelude to chaos.

The downloadable PDF is not a facsimile, but a re-formatted and lightly edited text laid out in a clear legible style.

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First published 1826

Book length: 39,000 words

Synopses of "John Law and the Mississippi Bubble" by Adolphe Thiers

Early Days

Law's Birth, parentage and education - His personal appearance and qualities - His early career in London - Duel and its consequences - His travels and financial studies on the continent - Difference between wealth and money - Banks and banking - Paper money - Law not guilty of the errors attributed to him - His system of a general bank - His attempt and failure to establish a territorial bank in Scotland

Success in France

Law resumes his travels - His success at the gaming-table - Proposes his system to various governments - State of the French Finances - Measures of the Regent - Debasing the coin - Its effect - Law offers his plans - Objections raised to it - Establishment of Law's private bank - Its favourable reception by the people - Its benefit to trade - Its extension to the provinces - Astonishing success

Building the System

Law's scheme of a commercial company - The Mississippi company - Jealousy of, and opposition to, Law - He is sustained by the Regent - The brothers Paris - The anti-system - Law initiates a speculation in stocks - Companies of the East and West Indies united - Shares rise rapidly - The rue Quincampoix - Stockbrokers - Run on the bank - Law triumphs over everything

Acclamation

The national debt - Law's project for redeeming it - Caution necessary in executing the project - The collection of the revenue granted to Law's company - Arrangements for the assumption of the national debt by the company - General eagerness to subscribe for the shares - The nobility pay court to Law - Rage for speculation begins - Stock jobbing operations of the brokers

Unnatural State

Mistake in the execution of Law's project - New privileges granted to the company - Speculation attracts all classes and effects all kinds of business - Foreigners arrive - Tricks of the brokers - Fortunes made in a few hours - Actual value of the shares - Law idolised - Anecdotes - His conversion - Courted by foreign governments - Continued success of the bank - Excessive luxury of speculators - Income of the company

Desperate Measures

Extravagant prices of goods - First decline of shares - Drain of specie from the bank - Forced measures resorted to - Attempts to revive confidence by adding new functions to the company - Letter to a creditor - Panic increases - Odious measures - Licentiousness of the realizers - Bank notes might and should have been disconnected from the shares - Violent and criminal plan

An Elabourate Fix

The bank and the company united - Price of the shares fixed - Measures for regulating the exchange of shares - Frightful depreciation of bank notes - Debtors the only persons benefitted - Father betrayed by his son - Speculators dispersed by soldiers - Second "Letter to a Creditor" - Ingratitude of the Mississippians - Murder and robbery by a young nobleman - Firmness of the Regent

Unwinding the system

Circulation of gold prohibited - Reduction of the nominal value of shares and bank notes - Great clamour raised - Whole blame of the reduction falls on Law - Regent yields to the clamour - He retains Law in his favour - Law repeals some of the most obnoxious regulations - Measures to abolish the System - Difficulties in carrying them out

Fall From Grace

"Spoils of the Mississippians" - Further efforts to bring in the notes - Men suffocated in the crowd at the bank - Mob pursue Law - He seeks protection at the palace of the Regent - Bank closed - Tampering with the currency - Severities towards the Mississippians - Final abolition of the System - Law quits France - Confiscation of his property

Reflections

Recapitulation - Comparison between this and other financial catastrophes - Reflections