8vo, pp. ; neatly written in brown ink within a ruled border, 19-37 lines per page; a few small stains, two small holes to final leaf touching a few letters; stab-stitched with green thread; in very good condition.
US $1968 €1677
A contemporary manuscript by an anonymous copyist reproducing some of the key documents surrounding John Law’s Mississippi system and the Visa instituted following its collapse. In just four years, Law completely transformed the French monetary system to a paper money/bank credit system and substituted shares in the Compagnie des Indes (the Mississippi Company) for the national debt. Having won great personal wealth and risen to the position of France’s finance minister, Law was forced to leave France in December 1720 following the collapse of his system.
The copyist of this manuscript devotes the first five pages to an extract from the register of the Compagnie des Indes for 22 February 1720, comprising twelve points, of which the copyist has omitted the fifth. The extract sets out the following important measures in the history of Law’s system: the Compagnie is charged with the control and administration of the Royal Bank; the Bank is to remain Royal and there is to be no increase in banknotes without arrêts from the Conseil; the Compagnie is to keep accounts of the Bank’s expenses and receipts as prescribed in the declaration of 4 December 1718; the Compagnie cannot demand 5% for money brought to the Bank’s offices nor receive and give specie other than at the current price, payments in specie will be authorised below 100 livres, and in future the Bank will only issue banknotes of 10000, 1000 and 100 livres, and 10000 livres notes are within two months to be exchanged for specie; in return for shares, the Compagnie will pay the king 900 million livres, 300 million in 1720 and 600 million monthly thereafter over ten years; the 300 million is to be put on the king’s account; the Bank is not to make payments for the king until the funds are in the Bank and is not to make payments above this amount; the Compagnie is to keep three books to record deposits of banknotes and individuals’ credits and debits, to record deposits of shares not liable to seizure, and to record deposits of shares subject to mortgages and liable to seizure; the Compagnie is to create 10 million annuity shares (‘actions rentieres’) at 2% per annum; the directors propose that the Compagnie no longer operates offices for purchase and sale of shares and subscriptions and that its directors and employees should not undertake any private business with the Compagnie’s effects; given the expansion of the Compagnie’s operations, the directors propose increasing the number of directors (and here mention is made of Law and eight others).
On pages 6-7 the copyist provides a summary of the contents of the highly important arrêt of 5 March 1720, which guaranteed the price of Compagnie shares at 9000 livres a share, effectively monetising them and creating a financial circuit out of line with the real economy. In May, Law attempted to correct the imbalance by reducing the value of banknotes and shares but by this time it was too late to avoid a crash.
On the final two pages the copyist details the ‘effets’ presented to the Visa in 1721, amounting to a staggering figure of 3060484446 (this is copied out twice), and summarises some points of the arrêt of 23 November 1721. The Visa was established by decree in January 1721, under the direction of Paris Duverney, and set about making an inventory of the property of all those who had, directly or indirectly, shared in the profits of the Mississippi system, with the intention of taxing them retrospectively.
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