1717, Law formed and presented to the public a Company, called the Company of the West, with a capital of 100,000,000 francs, to possess for twenty-four years the entire monopoly of the trade with Canada and Louisiana. He allowed this scheme to dangle before the public for nearly two years, whilst engaged in those speculations nearer home with which his name is so fatally connected. In May, 1719, however, he took in hand the scheme of the Company of the West, and persuading the Regent to suppress by an edict the privileges of the moribund Companies of India and of China, he transferred all their privileges, all their possessions, all their liabilities,—in a word, the remnant of all that they had acquired, and all that they owed,—to the Company of the West. By the eleventh article of the edict, it was directed that the Company should thenceforth be styled the 'Company of the Indies,' and should assume the arms of the Company of the West.
For a brief period it seemed as though the new Company would achieve a brilliant success. Its shares speedily rose to a premium of 200 per cent. It purchased from the Government for 4,020,000 francs the monopoly of tobacco, a purchase which was so profitable that it enabled them to return an annual revenue of 8,000,000 francs, equivalent to eight per cent. of the total capital of the Company as it was fixed in 1725. But at last, and within a brief period, the crash came. In the summer of 1720 a panic set in. The shares fell to the lowest
