MISSISSIPPI SCHEME. The gigantic commercial scheme commonly known by this name was projected in France by the celebrated John Law (q.v.) of Lauriston, in 1717 and collapsed in 1720. Its primary object was to develop the resources of the of Louisiana and the country bordering on the Mississippi, a tract at that time believed to abound in the precious metals. The company was incorporated in Aug., 1717, under the designation of the company of the west, and started with a capital of 200.000 shares, of 500 Byres each. They obtained the exclusive privilege of trading to the Mississippi, farming the taxes, and coining money. The prospectus was so inviting that shares were eagerly bought; and when, in 1719, the company obtained the monopoly of trading to the East Indies, China, the South seas, and all the possesSions of the French East India company, the brilliant vision opened up to the public gaze was irresistible. The Com pany of the Indio, as it was .now called,. created 50,000 additional, shares, but a rage for speculation had seized all classes, and there were at least 300,000 applicants for the new shares, which consequently rose to an enormous premium. Law, as director-general, promised an annual dividend of 200 livres per share, which, as the shares were paid for in the depreciated billets d'e.'rtt, amounted to an annual return of 120 per cent. The pub lic enthusiasm now rose to absolute frenzy, and Law's house, and the street in front of it, were daily crowded with applicants of both sexes and of all ranks, who were content to wait for hours, nay, for days together, in order to obtain an interview with the modern Plutus. While confidence lasted, a factitious impulse was given to trade in Paris; the value of manufactures was increased fourfold, and the demand far exceeded the supply.
The population is said to have been increased by hundreds of thousands, many of whom were glad to take shelter in garrets, kitchens, and stables. But the regent had mean while caused the paper circulation of the national hank to be increased as the Mississippi scheme stuck rose in value, and many wary speculators, foreseeing a crisis, had secretly converted their paper and shares into gold, which they transmitted to England or Bel gium for security. The increasing scarcity of gold and silver becoming Celt, a general run was made on the bank. The Mississippi scheme stock now fell considerably, and despite sundry desperate efforts, which were attended with momentary success, to keep up its credit, it continued to fall steadily and rapidly. In Feb., 1720, the national bank and the Company of the Indies were amalgamated, but though this gave an upward turn to the share market, it failed to put the public credit on a sound basis. Several useless attempts were made to mend matters; and those suspected of having more than a limited amount (fixed by a law passed at the time) of gold and silver in their possession, or of having removed it from the country, were punished with the utmost rigor. The crisis came at last. In July, 1720, the bank stopped payment, and Law was compelled to flee the country. A share in the Mississippi scheme now with difficulty brought 24 livres. An examination into the state of the accounts of the company was ordered by govern ment; much of the paper In circulation was canceled; and the rest was converted into rentes" at an enormous sacrifice.