MISSISSIPPI SCHEME. A gigantic bank ing and commercial scheme projected in France by the celebrated Scotch linanuier ,Iohn Law (rot.), at the beginning of the reign of Louis XV. The primary object of the scheme was to re suscitate the French finances by removing some of the (Hit and disorder which had followed on the wars of Louis XIV. Money was to flow into France by developing the re sources of the Province of Louisiana and the country bordering on the Mississippi—a tract at that time believed to abound in the precious metals. The was incorporated in IT IT under the designation of the Cninpagnie dent, and started with ? large capital. Two hun dred thousand shares were placed on the market and eagerly bought up. The company obtained exclusive privileges of I radium to the Nlississippi for t went y.tive years. of farming the taxes. and of coining 1111111ey. In 1719 it obtained a nopoly of trading In the East Indies, China, the South Seas, and all the possessions of the French East India Company, and the hrill opened op to the public gaze was irresistible. The Comps:Mile des Irides. as It was now' created fifty thousand additional shares; but there were at least three hundred thousand appli cants for these, and consequently shares rose to an enormous premium. 'the public enthusiasm became absolute frenzy, and while confidence lasted, a fictitious impulse was given to trade in Paris; the value of manufactures was increased fourfold, and the demand far exceeded the sup ply. The population of Paris 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 Orleans . had meanwhile caused the paper circulation of the national bank to be increased as the Mississippi scheme stock rose in value, and paper currency to the face value of 2.700,000,000 livres flooded the country. The result was that many wary speculators, foresee ing a crisis, secretly converted their paper and shares into gold. which they transmitted to Eng land or Belgium for security. The increasing scarcity of gold and silver in France becoming felt, a general run was made on the national bank, which in March, 1720, had been incorporated with the Compagnic des lades. On May '21st the Government issued an edict which reduced the value of bank notes and of shares in the company by one-half. Law was now controller-general of finances, and he made several unavailing attempts to mend matters. Those suspected of having more than a limited amount (fixed by a law passed at the time) of gold and silver in their• posses sion, or of having removed it from the coun ty. were punished with the utmost vigor. The final crisis came in July. 1720. when the bank stopped payment, and Law was compelled to {lee the country. A share in the Mississippi scheme now with difficulty brought 24 livres. An exami nation into the state of the accounts of the com pany was ordered by Government; much of the paper in circulation was canceled: and the rest was converted into `rentes' to an enormous amount.