p162  Chapter XV

Crozat surrenders his privileges to King Louis XV, 1717
— Law's Mississippi scheme

Up to this period this country had never received, "by authority," any designation or name, it being then for the first time, by a public official act, denominated "Louisiana," and made a dependency of New France, the intendant of which could appoint a sub‑delegate over it, which, if "office hunting" was in fashion in those days, he doubtless did so, but of which there is here no evidence.

These facts serve to strengthen the opinion that previous thereto this portion of the valley was under the entire control of the Jesuits, and subject to their sway.

To effectuate the objects of his grant, Crozat brought out the necessary miners and mining tools, some slaves from the West India Islands, other laborers and artisans, and pursued more  p163 or less diligently his explorations for the precious metals.

The adventurers under his patronage are the first who profited by the mineral treasures of Missouri, gathering their subsistence from the settlers at Kaskaskia and Cahokia, and to whom they added such of their numbers as preferred the cultivation of the earth and fixed employment to the more precarious pursuit in which they had engaged.

Four years digging and boring and "prospecting" were all sufficient to convince the patron and his followers that here was not the home of the pearl and of the precious stone, nor of the silver and the glittering gold, the depraved appetite for which had destroyed the thrones of Montezuma, and of the Incas of Peru, and had immolated thousands of innocent and peaceful human beings upon its accursed altar. It was not to be gratified here, and, therefore, the Sieur Crozat was content, in 1717, to surrender his privileges and his rights to the king who then occupied the throne, under the regency of the Duke of Orleans, the infant Louis XV.

This failure, however, had a beneficial effect  p164 upon the settlements at Kaskaskia and Cahokia, as they were in the neighborhood of the lead mines which were extensively worked, and their happy condition could not fail to allure many to them to participate in it.

Hence, from this source a good supply of Christian muscle and sinew was brought to the colony — men of various aptitudes, all of whom found in due time pursuits congenial to them, and a fit theater on which to act out their appropriate characters.

At this period, including the king's troops sent here to protect the adventurers, the colonists in all Louisiana, of every age, sex and color, did not exceed fifteen hundred, those in the Illinois occupying, besides the principal villages of Kaskaskia and Cahokia, the post at Vincennes, which seven years previously had been established there, and had become the seat of a Jesuit mission, Peoria, and the site at the mouth of the Wea upon the Wabash, Detroit, Mackinaw and Chicago. The other villages, St. Philip, Chartreº village, Prairie du Rocheº and Prairie du Pont not being then in existence.

About this time the attention of all France  p165 was directed toward that "great financier" — for that is the fashionable word — John Law, who, under the auspices of the regent, had organized "the Company of the West," or India Company, better known as "the Mississippi scheme," of which he was the projector, and to whom, and his associates, was granted all Louisiana, with full property in the soil.

The ill success of Crozat had not dispelled the idea which seems to have possessed the leading minds of France, that a hidden Pactolus was here, that oriental gems here found a home.

The long wars of Louis XIV had involved his kingdom in a debt of $400,000,000, at his decease, the surplus revenues of the empire being greatly inadequate to meet the interest upon it, they amounting to less than $1,000,000, the consequence of which was, that the national securities were of but little value, and the national credit at an extremely low point of depression.

Law, then a private banker, with a capital of less than $1,000,000, which he used cautiously, had won the public confidence, in the bills he emitted, and that of the regent by contributing to his private necessities in the career of dissipation he so eagerly pursued. He proposed  p166 to him a "credit system," in comparison to which, that of our times shrinks into insignificance, and by which, without loans or taxes, all the debts of the kingdom should be paid.

The scheme was to collect together all the coin of the kingdom into one bank, and issue notes as its representative, which, by the royal fiat, could be made receivable not only for the public dues, but be made a legal tender in all private transactions.

Law entertained the same opinion which some of our great statesmen inculcate, that the currency of a country is only the representative of its moving wealth, and that the representative need not possess any intrinsic value, that credit consists in the excess of these representatives over the cash to meet them with, and its advantages are in a direct ratio of such excess, hence the plan to collect the bullion and specie of France into a bank and issue notes for circulation. The mint, also the trading companies and the revenues of the kingdom were to be drawn within its influence. The supposed rich mines of Louisiana were to be opened and the product of its fertile soil, giving increased activity to commerce, of which this company had the  p167 control, and of that of Canada also, promised the most abundant returns for every investment. Stocks were created to an amount exceeding $300,000,000, the purchasers of which could pay for them in any certificates of public debt, thus giving an opportunity to change its indebtedness from private individuals to a company under its own patronage, from which the most liberal indulgences were naturally to be expected. The interest being promptly paid by the bank to the government creditors, the evidences of debt, which were receivable for payment for stock in the company, rose rapidly to par, and thus the public credit was completely restored.

The stock of "the company," based as it was upon such a rich foundation, rose many hundred per cent, and was eagerly sought after by all classes of society, and being transferred from hand to hand in quick succession, made the fortunes of thousands. Instances were not uncommon of servants, by their success in gambling in them, being enabled to ape the style of their former masters, in the luxury of their tables and in the splendor of their equipages.

Wealth seemed to be in the grasp of all who  p168 were so fortunate as to possess a few shares only, and none within the magic circle of its influence but felt the potency of the spell, and saw rising to his excited imagination heaps of untold glittering treasure.

All governmental means were employed to aid the operations of the company, but the bubble bursted. In a contest with the precious metals, as the representative of values, and as a currency, paper stood no chance. It became debased, the illusion was dispelled, thousands were overwhelmed in the ruin, and thousands beggared as suddenly as they were enriched.

Thus will it ever be when the circulation of a country is increased by artificial causes.

Every expansion of a currency which rests alone on credit — on promises to pay — will beget the very evils it is intended to remedy, and sooner or later involve the great mass of community in inevitable loss, profiting those only who are skillful in foreseeing the ebbs and flows of the tide.

The people of France learned a lesson by this scheme which they have not yet forgotten, and the relation of its fate is the most appropriate eulogy that can be paid to the much vaunted, but ruinous "credit system."

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