Millionaire - Janet Gleeson [57]
While the holiday mood continued, the foundation of the fabulous gains remained unquestioned. Shrouded in the mists of inexperience, speculators of the rue Quincampoix had no yardstick against which to measure their experience. Almost a century earlier, in the 1630s, speculation fever had descended on Holland when the price of tulips and futures contracts for bulbs had bubbled and burst—the now notorious Tulipmania. But though shares had long been available, investors had been largely confined to small, select groups. The wider general public had never before taken part, nor had such rapid rises on such a scale ever been witnessed. Like gluttons at a Mississippi banquet, most investors ingenuously accepted the opportunity to gorge themselves and never considered the consequence. The fact that the huge increase in share prices was founded on little more than hype and the hugely expanded money supply was unthinkingly brushed aside.
The quantities of notes that had been circulated were vast indeed. Estimates differ—there are no precise figures, because all records were burned in the aftermath of the Mississippi—but one assessment generally accepted by scholars puts the figure at over 1.2 billion livres’ worth by the end of 1719. Added to this, the 624,000 shares that had been issued at 221 million livres were, on current market valuations at the end of November 1719, worth 4.8 billion livres. Of these the Crown and the company probably owned a third. France, thanks to Law’s magic system, was now richer to the tune of 5.2 billion livres. The regent himself had earned a fortune, which he circulated liberally to his paramours and favorites, and Law believed himself “the richest subject in Europe.” But the question of what underpinned these paper fortunes had been dangerously ignored.
The share price had been boosted on its upward path by the ease with which money could be borrowed from the bank. Loans at 2 percent interest were readily available and shares could be used as collateral. The eighteenth-century economist Du Tot summed it up: “Law,” he said, “had built a seven-storey building on foundations that would support only three.” Now we would call it a bubble. As the autumn of 1719 yielded to winter, share prices scaled ever more precarious heights: shares that in August had traded for 3,000 livres tripled in value by December and by the new year reached a peak of 10,000, a twentyfold increase on the original par price of 500 livres, for which Law had been so hard pressed to find subscribers seven months earlier.
As the year drew to a close there were signs, however, that he was beginning to succumb to the pressures of his own success. In November the journalist Buvat noted that the Duc d’Antin, the Marquis de Lassay, Law, and several unnamed ladies had traveled by carriage to the rue Quincampoix—where carriages were banned to everyone else—to visit a banker by the name of Bergerie. Law was at the carriage window and, to amuse the ladies, threw several fistfuls of coins into the street. They watched as “the rabble and courtiers tumbled over one another in the mud to pick them up [and] someone threw from a neighbouring window several buckets of water on the opportunists, one can imagine as a result the state they were in.” The incident’s unsavory undertone raised questions as well as eyebrows. Had Law’s concern for public well-being been blunted by his success? Was ego blinding his moral sensibility to the extent that he now saw avarice as a form of entertainment?
One key long-standing supporter feared the worst: the Earl of Stair, Law’s old friend, became increasingly antagonistic. An inveterate and often unlucky gambler, Stair was distrustful of Mississippi speculation and scoffed at every price rise. In August, as share prices zoomed upward, he had commented venomously that the frenzied market was “more extravagant and more ridiculous than anything