Mississippi Scheme

The long wars occasioned by the ambition of Louis XIV. reduced France to the verge of bankruptcy, and every effort undertaken to remedy the evil seemed only to hasten the calamity. The famous Mississippi Scheme was projected by a Scotchman named John Law. The Regent Orleans, acting for King Louis XV., was persuaded by Law that his project, if adopted, would add enormously to the wealth and prosperity of France. The Mississippi Joint Stock Company was chartered in 1717. It included plans for developing the resources of Louisiana by a French colony on the Mississippi River; also for trading with China and the East Indies. The profits of the trade with North America through Louisiana, it was claimed, would liquidate the whole national debt of France and win fortunes for the stockholders. Paper money was issued and measures taken in connection with stock in the Mississippi Company which depreciated gold and silver coin. The people throughout France, with one impulse of avarice and greed, exchanged their gold and silver for the paper money of the Company, whose notes soon rose to eighty per cent. The success of Louis' project at first exceeded all expectations. But in two years the Company failed to meet its obligations. Gold and silver coin had disappeared and only worthless paper money remained. Thousands of families all over France were suddenly reduced to extreme poverty. When the whole scheme collapsed in 1720, John Law, its promoter, fearing public indignation, escaped from France, and died in poverty in Venice, 1729.