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By Root 658 0

engulfed in unprecedented speculation madness. By mid-August the shares that three months earlier had languished at 490 livres were being snapped up at 3,500. A carnival atmosphere descended on the city, and on the evening before St. Louis Day, August 25, thousands gathered in the Jardin des Tuileries to enjoy a firework and musical extravaganza. At the end of the evening the fashionable crowd funneled toward an exit at one end of the gardens but found their way partially barred because a steward had forgotten to open one of the gates. Impatience became a surge of panic when word spread that pickpockets were capitalizing on the wealthy captive audience. A dozen or so thieves were later arrested, pockets crammed with gold and silver snuff boxes, watches, diamond crosses, embroidered shawls, handkerchiefs, lace headdresses, pieces of men’s waistcoats, and panels of expensive ladies’ coats that had been subtly cut from their backs. Amid the pandemonium, eleven women fell and were suffocated or trampled to death. Hundreds more suffered broken limbs, heat exhaustion, the aftereffects of crushing. Paris mourned.

News of the disaster reached the rest of Europe along with reports of Law’s most daring maneuver. He had offered to take over the burden that had weighed so heavily on the nation since Louis’s final failing years, and lend the state enough to repay the national debt—1.2 billion livres at an interest rate of 3 percent. The proposal was intertwined with a highly contentious pledge to pay 52 million livres for the right to take over tax collection. At the time France leased this right to private enterprise in the shape of the General Receivers, who were responsible for direct taxation, and to the Farmers General, a syndicate of forty private financiers, who were responsible for collecting indirect taxes, such as customs duties and levies on salt and alcohol. The Farmers General were also the largest creditors of the state and profiteers from government indebtedness. The owner of a so-called tax farm lease had to estimate the sum of revenue he would raise and advance it to the state. If the revenue was below this amount, he himself was obliged to pay the state, while any revenue above it he could keep. In fact, research has recently shown that the forty financiers were not actually rich enough to advance the whole sum to be collected. They acted as “names,” or front men, for numerous anonymous investors and courtiers. It was a system that lay open to huge profits, corruption, and inefficiency, and one that was dominated by the Pâris brothers, the four most powerful financiers of France. Law’s fascination for finance had always been entwined with concern for moral economic issues. He saw injustice in the huge advantages the tax system gave to an established elite. Now he grasped the chance to eliminate them, little realizing how fiercely they would respond.

The massive sum needed to cover the government loan would be raised by a further issue of Mississippi shares. Existing bondholders would be given a choice of converting into shares or company annuities, which offered a return of 3 percent—at least 1 percent less than they currently received. The intention was to make shares a far more attractive proposition than annuities. The scheme was by far the most grandiose yet: Law was aiming to raise seventeen times more than the sum of all the previous issues, and again he made it sound entirely plausible.

Thus on September 13 a fourth issue of 100,000 shares, known as cinq-cents, was launched, priced at 5,000 livres with a nominal value of 500. As before, the issue was consumed hungrily by the Mississippi-mad public. Two more identical issues followed, then a final one of 24,000. Unlike earlier subscriptions, there were no restrictions on purchase—you did not need to own shares already; anyone might grow rich by buying into the Mississippi dream. The Earl of Stair noted, “The public had run upon this new subscription with that fury, that near the double of that sum is subscribed for: and there have been the greatest brigues