Page:Appletons' Cyclopædia of American Biography (1892, volume 3).djvu/673

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the establishment of any kind of paper credit. He thereupon went to Paris, gained the favor of the Duke of Orleans, and sought to introduce his pro- ject to the attention of the government, but was expelled as a gambler. Then he broached the scheme in Genoa, Turin, Vienna, and at various German courts ; but it was every- where rejected. His fascinating manners gained him admission to court circles, and his success at the gaming- table supplied him with means. When the Duke of Orleans suc- ceeded to the regency, Law re- turned to France with a private fortune of $500,-

000 that he had

made by gambling and speculation. The government was on the verge of bankruptcy, and the debasement of the currency had produced disorder in mercantile business. The council of finance rejected his project of a national bank, and the replacement of the metallic currency by an irre- deemable one of paper. He was authorized, how- ever, to establish a private bank of issue, which was chartered in May, 1716, and soon obtained a vast business. Law then conceived the project of raising the credit of the state and satisfying a part of its creditors, and at the same time developing the resources of the recently explored Mississippi valley, by transferring that region to a company whose shares should be made exchangeable at par for government stock. In August, 1717, the Com- pany of the west, or West India company, was formed, and was endowed by the king with sover- eign and proprietary rights over the Mississippi valley, with power to construct forts, raise troops, fit out ships of war, establish courts of justice, and develop mines. The regent presented the company with the vessels, forts, and factories that Antoine Crozat had constructed, and gave it a monopoly of the fur-trade with Canada for twentv-five vears. The capital of the company was fixed at 100,000,000 francs, divided into shares of 500 francs each. The government funds, which had fallen to one third of their face value, on being made exchange- able for the new stock, immediately rose to par. Subscribers were required to pay for one quarter of their stock in money, while for the remainder government bills of credit were accepted at their face value. The colonization of Louisiana was be- gun on a prodigal scale. Three vessels arrived with 800 emigrants on 25 Aug., 1718, and other bands followed ; yet few could endure the climate except hardy pioneers from Canada. The capital was named New Orleans, after the regent. Large sections of rich land were granted by the western company to corporations and individuals. Law received a prairie in Arkansas, and invested 1,500,- 000 francs in the colony. The regent, on 4 Dec, 1718, issued a decree transforming Law's banking establishment into a state bank, and guaranteeing its circulation. Bank-notes were issued until there were 1,000,000,000 francs in circulation in Decem- ber, 1719. The Company of the west in May, 1719, obtained the new monopoly of the commerce with Asia, Africa, and the South sea. whereupon the name was changed to the India company, and new stock was issued, the total number of shares in November, 1719, being 624,000. Law hoped to complete his system by having the company as- sume the financial administration of the state and pay off the public debt, and engaged with the pro- ceeds of the new shares to lend the king 1,600,000,- 000 francs at 3 per cent. The payment of the state debt with this loan, and the inflation of the cur- rency, caused a mania for speculation to take pos- session of the people of Paris. Land and all com- modities rose rapidly in price, and the shares of the India company at the end of November, 1719, sold for thirty-six or forty times their nominal value. The crisis lasted from the end of October, 1719, till the beginning of February, 1720. When the panic began, Law. who was appointed comp- troller-general on 5 Jan., 1720. attempted to sus- tain the inflated values by edicts declaring the value of the paper money to be five per cent, above that of specie, forbidding the payment of large sums in metallic money, and requiring holders of coin in excess of a certain amount to exchange it for bills. The prices of all things rose with the emission of additional paper money, but the shares in Law's company fell in the market. On 21 May, 1720, he acknowledged partial bankruptcy by pro- claiming the gradual reduction of the value of bank-notes to one half of their face value, which corresponded with their actual exchange value. The system of inflated currency and fictitious stock, by which he had sought to relieve the French government of its great burden of debt, finally collapsed, its author was dismissed from his ministerial post, and in December, 1720, fled from France. He lived for some time in London, a pen- sioner on his friends, and passed his last years in poverty in Venice. With the downfall of Law, ex- penditures in Louisiana ceased. But the colony survived the loss of such aid, as well as subsequent dangers and disasters. See " Histoire du systeme des finances sous la minorite de Louis XV." (the Hagxie, 1739): John P. Wood's "Memoirs of the Life of John Law " (Edinburgh, 1824) ; " Law. son systeme et son epoque." by Andre Cochut (Paris, 1853): and "The Mississippi Bubble," from the French of Adolphe Thiers (New York. 1859).

LAW, Jonathan, colonial governor, b. in Milford, Conn., 6 Aug., 1674 ; d. 9 Nov., 1750. He was graduated at Harvard in 1695, studied law, and opened an office in Milford. In 1715 he was appointed a judge of the supreme court of Connecticut, and in 1725 chief justice and lieutenant-governor. In 1741 he was chosen governor, and filled that office till his death. He opposed the preaching of George Whitefield and other revivalists, and signed an act prohibiting any itinerating clergyman or exhorter from preaching in a parish without the express desire of the pastor or people, under which Rev. Samuel Finley and others were driven out as vagrants. — His son, Richard, jurist, b. in Milford, Conn., 17 March, 1733; d. in New London, Conn.. 26 Jan., 1806, was graduated at Yale in 1751, studied law with Jared Ingersoll, was admitted to the bar at New Haven in 1754, and practised in New London. He won reputation in his profession, and was appointed a judge of the county court. He sat in the general assembly, was a member of the council from 1776 till 1786, and in 1777-8 and 1781-4 was a delegate to the old congress. After the return of peace he and Roger Sherman revised and codified the statute laws of Connecticut. In 1784 he was elevated to the su-