Extraordinary Popular Delusions and the Madness of Crowds

by Charles MacKay

  The relatives of D’Horn were now reduced to the last extremity. The Prince de Robec Montmorency, despairing of other methods, found means to penetrate into the dungeon of the criminal, and offering him a cup of poison, implored him to save them from disgrace. The Count d’Horn turned away his head, and refused to take it. Montmorency pressed him once more, and losing all patience at his continued refusal, turned on his heel, and exclaiming, “Die, then, as thou wilt, mean-spirited wretch! thou art fit only to perish by the hands of the hangman!” left him to his fate.

  D’Horn himself petitioned the Regent that he might be beheaded, but Law, who exercised more influence over his mind than any other person, with the exception of the notorious Abbe Dubois, his tutor, insisted that he could not in justice succumb to the self-interested views of the D’Horns. The Regent had from the first been of the same opinion, and within six days after the commission of their crime, D’Horn and Mille were broken on the wheel in the Place de Greve. The other assassin, Lestang, was never apprehended.

  This prompt and severe justice was highly pleasing to the populace of Paris; even M. de Quincampoix, as they called Law, came in for a share of their approbation for having induced the Regent to show no favour to a patrician. But the number of robberies and assassinations did not diminish. No sympathy was shown for rich jobbers when they were plundered: the general laxity of public morals, conspicuous enough before, was rendered still more so by its rapid pervasion of the middle classes, who had hitherto remained comparatively pure, between the open vices of the class above and the hidden crimes of the class below them. The pernicious love of gambling diffused itself through society, and bore all public, and nearly all private, virtue before it.

  For a time, while confidence lasted, an impetus was given to trade, which could not fail to be beneficial. In Paris, especially, the good results were felt. Strangers flocked into the capital from every part, bent, not only upon making money, but on spending it. The Duchess of Orleans, mother of the Regent, computes the increase of the population during this time, from the great influx of strangers from all parts of the world, at 305,000 souls. The housekeepers were obliged to make up beds in garrets, kitchens, and even stables, for the accommodation of lodgers; and the town was so full of carriages and vehicles of every description, that they were obliged in the principal streets to drive at a foot-pace for fear of accidents. The looms of the country worked with unusual activity, to supply rich laces, silks, broad-cloth, and velvets, which being paid for in abundant paper, increased in price four-fold. Provisions shared the general advance; bread, meat, and vegetables were sold at prices greater than had ever before been known; while the wages of labour rose in exactly the same proportion. The artisan, who formerly gained fifteen sous per diem, now gained sixty. New houses were built in every direction; an illusory prosperity shone over the land, and so dazzled the eyes of the whole nation that none could see the dark cloud on the horizon, announcing the storm that was too rapidly approaching.

  Law himself, the magician whose wand had wrought so surprising a change, shared, of course, in the general prosperity. His wife and daughter were courted by the highest nobility, and their alliance sought by the heirs of ducal and princely houses. He bought two splendid estates in different parts of France, and entered into a negotiation with the family of the Duke de Sully for the purchase of the Marquisate of Rosny. His religion being an obstacle to his advancement, the Regent promised, if he would publicly conform to the Catholic faith, to make him comptroller-general of the finances. Law, who had no more real religion than any other professed gambler, readily agreed, and was confirmed by the Abbe de Tencin in the cathedral of Melun, in presence of a great crowd of spectators.

  [The following squib was circulated on the occasion : –

  “Foin de ton zele seraphique,

  Malheureux Abbe de Tencin,

  Depuis que Law est Catholique,

  Tout le royaume est Capucin

  Thus, somewhat weakly and paraphrastically rendered by Justansond, in his translation of the “Memoirs of Louis XV:” –

  “Tencin, a curse on thy seraphic zeal,

  Which by persuasion hath contrived the means

  To make the Scotchman at our altars kneel,

  Since which we all are poor as Capucines?]

  On the following day he was elected honorary churchwarden of the parish of St. Roch, upon which occasion he made it a present of the sum of five hundred thousand livres. His charities, always magnificent, were not always so ostentatious. He gave away great sums privately, and no tale of real distress ever reached his ears in vain.

  At this time, he was by far the most influential person of the state. The Duke of Orleans had so much confidence in his sagacity, and the success of his plans, that he always consulted him upon every matter of moment. He was by no means unduly elevated by his prosperity, but remained the same simple, affable, sensible man that he had shown himself in adversity. His gallantry, which was always delightful to the fair objects of it, was of a nature, so kind, so gentlemanly, and so respectful, that not even a lover could have taken offence at it. If upon any occasion he showed any symptoms of haughtiness, it was to the cringing nobles, who lavished their adulation upon him till it became fulsome. He often took pleasure in seeing how long he could make them dance attendance upon him for a single favour. To such of his own countrymen as by chance visited Paris, and sought an interview with him, he was, on the contrary, all politeness and attention. When Archibald Campbell, Earl of Islay, and afterwards Duke of Argyle, called upon him in the Place Vendome, he had to pass through an ante-chamber crowded with persons of the first distinction, all anxious to see the great financier, and have their names put down as first on the list of some new subscription. Law himself was quietly sitting in his library, writing a letter to the gardener at his paternal estate of Lauriston about the planting of some cabbages! The Earl stayed for a considerable time, played a game of piquet with his countryman, and left him, charmed with his ease, good sense, and good breeding.

  Among the nobles who, by means of the public credulity at this time, gained sums sufficient to repair their ruined fortunes, may be mentioned the names of the Dukes de Bourbon, de Guiche, de la Force [The Duke de la Force gained considerable sums, not only by jobbing in the stocks, but in dealing in porcelain, spices, &c. It was debated for a length of time in the Parliament of Paris whether he had not, in his quality of spice-merchant, forfeited his rank in the peerage. It was decided in the negative. A caricature of him was made, dressed as a street porter, carrying a large bale of spices on his back, with the inscription, “Admirez La Force.”], de Chaulnes, and d’Antin; the Marechal d’Estrees, the Princes de Rohan, de Poix, and de Leon. The Duke de Bourbon, son of Louis XIV by Madame de Montespan, was peculiarly fortunate in his speculations in Mississippi paper. He rebuilt the royal residence of Chantilly in a style of unwonted magnificence, and, being passionately fond of horses, he erected a range of stables, which were long renowned throughout Europe, and imported a hundred and fifty of the finest racers from England, to improve the breed in France. He bought a large extent of country in Picardy, and became possessed of nearly all the valuable lands lying between the Oise and the Somme.

  When fortunes such as these were gained, it is no wonder that Law should have been almost worshipped by the mercurial population. Never was monarch more flattered than he was. All the small poets and litterateurs of the day poured floods of adulation upon him. According to them he was the saviour of the country, the tutelary divinity of France; wit was in all his words, goodness in all his looks, and wisdom in all his actions. So great a crowd followed his carriage whenever he went abroad, that the Regent sent him a troop of horse as his permanent escort, to clear the streets before him.

  It was remarked at this time, that Paris had never before been so full of objects of elegance and luxury. Statues, pictures, and tapestries were imported in great quantities from foreign countries, and found a ready market. All those pretty trifles
in the way of furniture and ornament which the French excel in manufacturing, were no longer the exclusive play-things of the aristocracy, but were to be found in abundance in the houses of traders and the middle classes in general. Jewellery of the most costly description was brought to Paris as the most favourable mart. Among the rest, the famous diamond, bought by the Regent, and called by his name, and which long adorned the crown of France. It was purchased for the sum of two millions of livres, under circumstances which show that the Regent was not so great a gainer as some of his subjects, by the impetus which trade had received. When the diamond was first offered to him, he refused to buy it, although he desired, above all things, to possess it, alleging as his reason, that his duty to the country he governed would not allow him to spend so large a sum of the public money for a mere jewel. This valid and honourable excuse threw all the ladies of the court into alarm, and nothing was heard for some days but expressions of regret, that so rare a gem should be allowed to go out of France; no private individual being rich enough to buy it. The Regent was continually importuned about it; but all in vain, until the Duke de St. Simon, who, with all his ability, was something of a twaddler, undertook the weighty business. His entreaties, being seconded by Law, the good-natured Regent gave his consent, leaving to Law’s ingenuity to find the means to pay for it. The owner took security for the payment of the sum of two millions of livres within a stated period, receiving, in the mean time, the interest of five per cent. upon that amount, and being allowed, besides, all the valuable clippings of the gem. St. Simon, in his Memoirs, relates, with no little complacency, his share in this transaction. After describing the diamond to be as large as a greengage, of a form nearly round, perfectly white, and without flaw, and weighing more than five hundred grains, he concludes with a chuckle, by telling the world, “that he takes great credit to himself for having induced the Regent to make so illustrious a purchase.” In other words, he was proud that he had induced him to sacrifice his duty, and buy a bauble for himself, at an extravagant price, out of the public money.

  Thus the system continued to flourish till the commencement of the year 1720. The warnings of the Parliament, that too great a creation of paper money would, sooner or later, bring the country to bankruptcy, were disregarded. The Regent, who knew nothing whatever of the philosophy of finance, thought that a system which had produced such good effects could never be carried to excess. If five hundred millions of paper had been of such advantage, five hundred millions additional would be of still greater advantage. This was the grand error of the Regent, and which Law did not attempt to dispel. The extraordinary avidity of the people kept up the delusion; and the higher the price of Indian and Mississippi stock, the more billets de banque were issued to keep pace with it. The edifice thus reared might not unaptly be compared to the gorgeous palace erected by Potemkin, that princely barbarian of Russia, to surprise and please his imperial mistress: huge blocks of ice were piled one upon another; ionic pillars, of chastest workmanship, in ice, formed a noble portico; and a dome, of the same material, shone in the sun, which had just strength enough to gild, but not to melt it. It glittered afar, like a palace of crystals and diamonds; but there came one warm breeze from the south, and the stately building dissolved away, till none were able even to gather up the fragments. So with Law and his paper system. No sooner did the breath of popular mistrust blow steadily upon it, than it fell to ruins, and none could raise it up again.

  The first slight alarm that was occasioned was early in 1720. The Prince de Conti, offended that Law should have denied him fresh shares in India stock, at his own price, sent to his bank to demand payment in specie of so enormous a quantity of notes, that three waggons were required for its transport. Law complained to the Regent, and urged on his attention the mischief that would be done, if such an example found many imitators. The Regent was but too well aware of it, and, sending for the Prince de Conti, ordered him, under penalty of his high displeasure, to refund to the Bank two-thirds of the specie which he had withdrawn from it. The Prince was forced to obey the despotic mandate. Happily for Law’s credit, De Conti was an unpopular man: everybody condemned his meanness and cupidity, and agreed that Law had been hardly treated. It is strange, however, that so narrow an escape should not have made both Law and the Regent more anxious to restrict their issues. Others were soon found who imitated, from motives of distrust, the example which had been set by De Conti in revenge. The more acute stockjobbers imagined justly that prices could not continue to rise for ever. Bourdon and La Richardiere, renowned for their extensive operations in the funds, quietly and in small quantities at a time, converted their notes into specie, and sent it away to foreign countries. They also bought as much as they could conveniently carry of plate and expensive jewellery, and sent it secretly away to England or to Holland. Vermalet, a jobber, who sniffed the coming storm, procured gold and silver coin to the amount of nearly a million of livres, which he packed in a farmer’s cart, and covered over with hay and cow-dung. He then disguised himself in the dirty smock-frock, or blouse, of a peasant, and drove his precious load in safety into Belgium. From thence he soon found means to transport it to Amsterdam.

  Hitherto no difficulty had been experienced by any class in procuring specie for their wants. But this system could not long be carried on without causing a scarcity. The voice of complaint was heard on every side, and inquiries being instituted, the cause was soon discovered. The council debated long on the remedies to be taken, and Law, being called on for his advice, was of opinion, that an edict should be published, depreciating the value of coin five per cent. below that of paper. The edict was published accordingly; but, failing of its intended effect, was followed by another, in which the depreciation was increased to ten per cent. The payments of the bank were at the same time restricted to one hundred livres in gold, and ten in silver. All these measures were nugatory to restore confidence in the paper, though the restriction of cash payments within limits so extremely narrow kept up the credit of the Bank.

  Notwithstanding every effort to the contrary, the precious metals continued to be conveyed to England and Holland. The little coin that was left in the country was carefully treasured, or hidden until the scarcity became so great, that the operations of trade could no longer be carried on. In this emergency, Law hazarded the bold experiment of forbidding the use of specie altogether. In February 1720 an edict was published, which, instead of restoring the credit of the paper, as was intended, destroyed it irrecoverably, and drove the country to the very brink of revolution. By this famous edict it was forbidden to any person whatever to have more than five hundred livres (20 pounds sterling) of coin in his possession, under pain of a heavy fine, and confiscation of the sums found. It was also forbidden to buy up jewellery, plate, and precious stones, and informers were encouraged to make search for offenders, by the promise of one-half the amount they might discover. The whole country sent up a cry of distress at this unheard-of tyranny. The most odious persecution daily took place. The privacy of families was violated by the intrusion of informers and their agents. The most virtuous and honest were denounced for the crime of having been seen with a louis d’or in their possession. Servants betrayed their masters, one citizen became a spy upon his neighbour, and arrests and confiscations so multiplied, that the courts found a difficulty in getting through the immense increase of business thus occasioned. It was sufficient for an informer to say that he suspected any person of concealing money in his house, and immediately a search-warrant was granted. Lord Stair, the English ambassador, said, that it was now impossible to doubt of the sincerity of Law’s conversion to the Catholic religion; he had established the inquisition, after having given abundant evidence of his faith in transubstantiation, by turning so much gold into paper.

  Every epithet that popular hatred could suggest was showered upon the Regent and the unhappy Law. Coin, to any amount above five hundred livres, was an illegal tender, and nobody would take paper if he could help it. No
one knew to-day what his notes would be worth to-morrow. “Never,” says Duclos, in his Secret Memoirs of the Regency, “was seen a more capricious government-never was a more frantic tyranny exercised by hands less firm. It is inconceivable to those who were witnesses of the horrors of those times, and who look back upon them now as on a dream, that a sudden revolution did not break out – that Law and the Regent did not perish by a tragical death. They were both held in horror, but the people confined themselves to complaints; a sombre and timid despair, a stupid consternation, had seized upon all, and men’s minds were too vile even to be capable of a courageous crime.” It would appear that, at one time, a movement of the people was organised. Seditious writings were posted up against the walls, and were sent, in hand-bills, to the houses of the most conspicuous people. One of them, given in the “Memoires de la Regence,” was to the following effect : – ” Sir and Madam, – This is to give you notice that a St. Bartholomew’s Day will be enacted again on Saturday and Sunday, if affairs do not alter. You are desired not to stir out, nor you, nor your servants. God preserve you from the flames! Give notice to your neighbours. Dated Saturday, May 25th, 1720.” The immense number of spies with which the city was infested rendered the people mistrustful of one another, and beyond some trifling disturbances made in the evening by an insignificant group, which was soon dispersed, the peace of the capital was not compromised.