The Great Events by Famous Historians, v. 13
Author: Various
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With a staff of specialists


The National Alumni





An Outline Narrative of the Great Events, xiii CHARLES F. HORNE

John Law Promotes the Mississippi Scheme (A.D. 1716), 1 LOUIS ADOLPHE THIERS

Prince Eugene Vanquishes the Turks Siege and Battle of Belgrad (A.D. 1717), 16 PRINCE EUGENE OF SAVOY

Bursting of the South Sea Bubble (A.D. 1720), 22 LOUIS ADOLPHE THIERS

Bach Lays the Foundation of Modern Music (A.D. 1723), 31 HENRY TIPPER

Settlement of Georgia (A.D. 1732), 44 WILLIAM B. STEVENS

Rise of Methodism (A.D. 1738) Preaching of the Wesleys and of Whitefield, 57 WILLIAM E.H. LECKY

Conquests of Nadir Shah Capture of Delhi (A.D. 1739), 72 SIR JOHN MALCOLM

First Modern Novel (A.D. 1740), 100 EDMUND GOSSE

Frederick the Great Seizes Silesia (A.D. 1740) Maria Theresa Appeals to the Hungarians, 108 WILLIAM SMYTH

Defeat of the Young Pretender at Culloden (A.D. 1746) Last of the Stuarts, 117 JUSTIN McCARTHY

Benjamin Franklin Experiments with Electricity (A.D. 1747), 130 JOHN BIGELOW AND BENJAMIN FRANKLIN

Voltaire Directs European Thought from Geneva (A.D. 1755), 144 JOHN MORLEY GEORGE W. KITCHIN


Exile of the Acadian Neutrals (A.D. 1755), 181 WILLIAM H. WITHROW

Clive Establishes British Supremacy in India Black Hole of Calcutta: Battle of Plassey (A.D. 1756), 185 SIR ALEXANDER J. ARBUTHNOT

Seven Years' War (A.D. 1756-1763) Battle of Torgau, 204 WOLFGANG MENZEL FREDERICK THE GREAT

Conquest of Canada Victory of Wolfe at Quebec (A.D. 1759), 229 A.G. BRADLEY

Usurpation of Catharine II in Russia (A.D. 1762), 250 W. KNOX JOHNSON

Conspiracy of Pontiac (A.D. 1763), 267 E.O. RANDALL

American Colonies Oppose the Stamp Act (A.D. 1765) Patrick Henry's Speech, 299 JAMES GRAHAME GEORGE BANCROFT

Watt Improves the Steam-engine (A.D. 1769), 302 FRANCOIS ARAGO

First Partition of Poland (A.D. 1772), 313 JAMES FLETCHER

The Boston Tea Party (A.D. 1773), 333 GEORGE BANCROFT

Cotton Manufacture Developed (A.D. 1774), 341 THOMAS F. HENDERSON

Intellectual Revolt of Germany Goethe's Werther Arouses Romanticism (A.D. 1775), 347 KARL HILLEBRAND

Pestalozzi's Method of Education (A.D. 1775), 364 GEORGE RIPLEY

Universal Chronology (A.D. 1716-1775), 379 JOHN RUDD




The charge of the British at Quebec (page 248), Painting by R. Caton Woodville. Frontispiece

The British officer reads the decree of exile of the Acadian Neutrals, in the village church, 184 Painting by Frank Dicksee.






During the eighteenth century a remarkable change swept over Europe. The dominant spirit of the time ceased to be artistic as in the Renaissance, or religious as in the Reformation, or military as during the savage civil wars that had followed. The central figure of the world was no longer a king, nor a priest, nor a general. Instead, the man on whom all eyes were fixed, who towered above his fellows, was a mere author, possessed of no claim to notice but his pen. This was the age of the arisen intellect.

The rule of Louis XIV, both in its splendor and its wastefulness, its strength and its oppression, its genius and its pride, had well prepared the way for what should follow. Not only had French culture extended over Europe, but the French language had grown everywhere to be the tongue of polite society, of the educated classes. It had supplanted Latin as the means of communication between foreign courts. Moreover, the most all-pervading and obtrusive of French monarchs was succeeded by the most retiring, the one most ready of all to let the world take what course it would. Louis XV chanced to reign during this entire period, from 1715 to 1774, and that is equivalent to saying that France, which had become the chief state of Europe, was ungoverned, was only robbed and bullied for the support of a profligate court. So long as citizens paid taxes, they might think—and say—wellnigh what they pleased.

The elder Louis had realized something of the error of his own career and had left as his last advice to his successor, to abstain from war. We are told that the obedient legatee accepted the caution as his motto, and had it hung upon his bedroom wall, where it served him as an excellent excuse for doing nothing at all. His government was notoriously in the hands of his mistresses, Pompadour and the others, and their misrule was to the full as costly to France as the wars of the preceding age. They drained the country quite as deeply of its resources and renown; they angered and insulted it far more.

Meanwhile the misery of all Europe, caused by the continued warfare, cried out for reform, demanded it imperatively if the human race were not to disappear. The population of France had diminished by over ten per cent. during the times of the "Grand Monarch"; the cost of the Thirty Years' War to Germany we have already seen. Hence we find ourselves in a rather thoughtful and anxious age. Even kings begin to make some question of the future. Governments become, or like to call themselves, "benevolent despotisms," and instead of starving their subjects look carefully, if somewhat dictatorially, to their material prosperity.

England, to be sure, but England alone, stands out as an exception to the prevalence of despotic rule. There the commons had already won their battle. King George I, the German prince whom they had declared their sovereign after the death of Anne (1714), did not even know his subjects' language, communicated with his ministers in barbaric Latin, and left the governing wholly in their hands. The "cabinet" system thus sprang up; the ministers were held responsible to Parliament and obeyed its will. The exiled Stuart kings made one or two feeble attempts to win back their throne, but the tide of progress was against them and their last hope vanished in the slaughter of Culloden.[1]

By that defeat Great Britain was finally and firmly established as a parliamentary government; and the most marked of all the physical changes of the century was the rapid expansion of her power under this new form of rule. She grew to be really "mistress of the seas," extended her sceptre over distant lands, ceased to be an island, and became a world-wide empire. Her trade increased enormously; her manufactures developed. By his invention of the "spinning-jenny," Arkwright placed England's cotton manufacture among the most giant industries of the world.[2] The land grew vastly rich. It was her reward for political progress, for having been able so to "get the start of the majestic world."


At the opening of this period the talk of the town, both in Paris and in London, ran on colonies and the tremendous wealth to be gained from them as the Spaniards and the Dutch had done. During the minority of Louis XV, even the Prince Regent of France dabbled in colonial investments. The stock market became suddenly a prominent feature of politics. John Law planned his dazzling "Mississippi Scheme," by which all Frenchmen were to become millionaires. Only, unfortunately, the bubble burst, and the industrious were ruined instead.[3] England had its "South Sea Bubble," with the same madness of speculation, vanishing fortunes, and blasted reputations.[4] The nobility having been driven by gunpowder from their ancient occupation as warrior chiefs, having lost to kings and people their rights as governors, became traders instead. We approach a period in which they cease to be the leading order of society, we approach the "reign of the middle classes."

From England, according to the English view, sprang also the great intellectual movement of the age. Voltaire visited the England of Addison and Pope; Montesquieu studied the English Constitution of 1689; and these two men were the writers who overthrew absolutism in Europe, who paved the way for the epoch of Revolution that was to follow. Montesquieu's Persian Letters, satirizing French society, appeared as early as 1721. Voltaire's sarcasms and witty sneers got him into trouble with the French Government as early as 1715. He was imprisoned in the Bastille, but released and at last driven from his country, a firebrand cast loose upon Europe to spread the doctrine of man's equality, to cry out everywhere for justice against oppression, and to mock with almost satanic ingenuity against the religion in whose name Europe had plunged into so many wars. By 1740 Voltaire was the most prominent figure of his world, if we except perhaps the quarrelling sovereigns, Maria Theresa and Frederick the Great. He dwelt for a time with Frederick in Berlin; but the two disagreed as great potentates will, and Voltaire withdrew to Geneva (1755), the little independent city republic which had served as a refuge to so many fugitives on France's border.[5]

From Geneva, Voltaire corresponded with most of the crowned heads of Europe. His advice was eagerly sought by "benevolent despotism." The aid of his mighty pen was claimed by every victim of oppression. In Paris, Diderot and his companions brought out the famous Cyclopaedia, a mighty monument of human learning indeed, but even more a mighty sermon against tyranny, a scornful protest against Christianity, a teacher spreading over all the earth the preachings of Voltaire.

If there was evil in this movement there was also good. Thought was aroused, was stimulated, and everywhere the products of awakened genius began to appear. The marvellous development of modern music had its origin in this period with the creations of Bach.[6] The modern novel began its tremendously important career with Richardson and Fielding.[7] Inventive genius achieved the first great triumph of modern mechanicism in Watt's steam-engine.[8] Even across the ocean spread the intellectual impulse, and the New World had its Franklin to astonish and delight the old with his experiments in electricity—childish experiments at first, as man reached out slowly, shudderingly, toward control of this last and most marvellous of his servants.[9]

Philanthropy awoke also. Serious folk began to have vague self-questionings as to the righteousness of human slavery. The prison system was investigated; in England there were vague attempts at its reform. The noble Oglethorpe did what he could to arouse public sentiment against imprisonment for debt, and in his own person led to America a colony of the unfortunate victims of the system. They founded Georgia, the latest of the colonies; and the chain of settlements along the Atlantic coastline was complete.[10]

Who would find waste land to live on after that, must journey farther west, must seek the interior of the new continent—a simple fact, but one that was soon destined to produce tempestuous results.

In this age also, as if in answer to the spiritual apathy of which Voltaire was only the expression, not the cause, there arose Methodism, which in externals at least showed itself the most passionate and the most expressive form of devotion to Christianity. Wesley and Whitefield, the celebrated preachers, spread their doctrines over England in the face of insult and persecution. They penetrated the American colonies; their doctrines reached even beyond their language and affected the entire European Continent. The revival of devotion may have been hysterical, yet a vast revival it assuredly was; it has been called by some critics the most important religious movement since the Reformation.[11]


In face of such events as these, we learn to attach less importance to the schemes of kings, and their selfish territorial wars, horrible as these may be in their exhibitions of human heartlessness and blood-guilt, destructive as they have ever been in their consequences of suffering and degeneration.

The Turks were now finally beaten back from their conquests in Hungary. The war which they had begun with the siege of Vienna was continued by the celebrated Austrian general, Prince Eugene, the companion of Marlborough against Louis XIV. Eugene won victory after victory, and finally by the capture of Belgrad (1717) drove the Mahometans forever from Hungarian territory, reduced them from a universal menace to become an ever-fading "Eastern question."[12]

Russia also, at first under Peter the Great and later under Catherine II, began to reach out for Turkish territory. The Turks had risen by the sword, and now, as other nations progressed and they stood still, the power of the sword was failing them. Russia expanded toward the Black Sea, as before she had expanded toward the Baltic, feeling out from her boundaries everywhere, moving along the line of least resistance, already looking toward Poland as her next tempting mouthful.

In Asia too the Turks had troubles to encounter. Asia, the vastly productive, multitudinous through unprogressive, could still raise up conquerors of the Turkish type to stand against them. The last of those sudden waves of temporary, meaningless, barbarian conquest swept over the Asian plains. Nadir Shah, a Persian bandit, freed his country from the yoke of its Afghan tyrants, assumed its throne, and by repeated battles enlarged his domains at Turkish expense. He subdued Afghanistan, and then extending his attention to India made a sudden invasion of that huge land, overthrew the forces of the Great Mogul, and, having captured both him and his capital, permitted him to continue to reign as a sort of subject prince. Returning from this distant expedition, Nadir Shah was beginning to push his conquests over Northeastern Asia when he was slain by a conspiracy among his Persian followers, driven to desperation by his savage tyranny. His dominions fell to pieces with his death.[13]

Europe meanwhile was going through a series of wars which seem small improvement over those of Nadir, except that they have had more polished historians. The selfish principles of Louis XIV had not lost their influence, the passion for territorial aggrandizement had not disappeared. In all history it would be hard to find a war more brazen in the avowed selfishness of its beginning, more utterly callous in its persistence, than that into which all Europe plunged in 1740.

This astonishing turmoil is known as the War of the Austrian Succession. We have seen how the extinction of the line of the Spanish Hapsburgs had given rise to kingly jealousies and strife in 1700. Next the Austrian Hapsburgs, or at least the male line of them, became extinct in 1740. Their surviving representative was a daughter, a young and energetic woman, Maria Theresa, the "Empress Queen." Her father, the Emperor Charles VI, foreseeing the difficulties she must encounter, had during his lifetime made treaties with every important court of Europe, by which he yielded them valuable concessions in return for their guarantee that on his death his daughter should succeed to his throne and his possessions undisturbed. Her husband was to be made emperor.

The moment Charles was gone, every treaty was thrown to the winds, and every hand seemed extended by a common impulse to clutch what it could from a woman's weakness.[14] The first to move was Frederick II, King of Prussia, he whom his admirers have called the Great. He was a young man, he had just succeeded to the Prussian kingdom which his father had left peaceful and prosperous, guarded by a powerful and well-trained army, made secure by a well-filled treasury. Young Frederick was undoubtedly great in intellect and in cynical frankness. He saw his opportunity, he made no pretence of keeping his promises; marching his army forward he seized the nearest Austrian province, the rich and extensive land of Silesia. The other kingdoms rushed to get their share of the spoils; France, Bavaria, Saxony, Sardinia, and Spain formed an alliance with Prussia. Only England, in her antagonism to France, made protest—purely diplomatic. Austria was assailed from every side. Her overthrow seemed certain. A French army was within three days' march of Vienna; it captured the Bohemian capital, Prague.

It was then that Maria Theresa made her famous appeal to the Hungarians, and the impressionable Magyars swore to die in her defence. She gathered armies, Austrian and Hungarian. She made a desperate alliance with Frederick, consenting to give him Silesia so as to save her other domains. The members of the coalition quarrelled among themselves. The French were driven to a disastrous retreat from Prague. Louis XV remembered his disapproval of war, as soon as it became disastrous; and the whole assault on the Empress Queen faded away as selfishly as it had risen.

The only result was that Frederick had Silesia, and Maria Theresa intended to have it back; and so they plotted and plotted, fought and fought. War followed war, and battle, battle. Silesia became a desert at last and of little value to either party. As to the Silesians who had once existed there, a few of them escaped starvation and massacre, not many, some hundred thousands, a mere matter of figures this in the kingly game and not accurately kept count of.


The final upshot of this Silesian argument was the Seven Years' War. Maria Theresa made friends with the mistress of Louis XV, and so secured a French alliance. Frederick offended the Empress of Russia by his witty tongue, and she also joined in the "ladies' war" against him. Saxony, the nearest state to Prussia, was ever on the side of the strongest. So here was the European coalition hurled against Frederick in his turn. He proved the ablest general of his age, one of the master minds of military skill. For seven years he withstood all his enemies, Austria and Russia mainly, for Saxony he soon conquered, and France showed no great military powers—disgraced herself if further disgrace were possible to her condition.

Over the military details of the contest we need not pause.[15] Prussia had always been regarded as one of the lesser European states, Austria and France as the chief powers. Russia now proved herself of equal weight with the greatest, so that even the genius of Frederick began to fail against the enormous odds which crushed him down. His land was laid waste, his capital seized by a sudden attack and held for ransom. He was saved by the death of the Russian Empress; her son and successor, an admirer of Frederick, promptly changed sides in the war. By degrees everyone abandoned it but Maria Theresa; and she, finding her single strength insufficient against Prussia, was compelled to yield at last. Frederick kept his dear-bought desert of Silesia.

This Seven Years' War caused what that of the Austrian Succession had attempted, a complete redistribution of the balance of European power, England, Russia, and Prussia rising to at least equality with Austria and France. Even before the opening of the formal war France and England had been engaged in a colonial strife, which had caused England to declare herself Frederick's ally; and, while in Europe the grapple between England and France did not assume serious proportions, it was of enormous consequence to their colonies in India and America.

In India both countries had trading-stations, but the French were popular with the natives and the English were not. The weakness of the native support was not realized by either party. The conquests of Nadir Shah were scarcely known to them; the name of the Great Mogul at Delhi was one of vagueness and mysterious power; it seemed to the French that with Indian aid they could easily drive the English into the sea; and the attempt was made. It must have been successful but for Clive. That remarkable young warrior rose from his subordinate desk, laid aside his clerkly pen, and gathering a little band of fighters round him, defeated both French and natives in the remarkable siege of Arcot. Then came the hideous tale of the "black hole of Calcutta," and Clive achieved revenge and completed his work of conquest at Plassey (1757).[16]

Centuries had elapsed since Europeans had encountered, in serious battle, any Asiatics except the Turks—and these had proved quite equal to the strife. Hence the vast superiority which the more progressive civilization had attained was little realized. The American aborigines had indeed fallen an easy prey to Europe, but the conquest of Asia and Africa had not yet been begun. Thus the victories of Clive seemed to his contemporaries even more marvellous than they were. They won for England not only an empire in India, but a high prestige in Europe also.


In America the British success was equally decisive though more dearly bought. Here the war had originated in the Ohio valley. Finding no more room upon the coast, the English colonists were pressing westward and there met the French. The vast wilderness which had lain unoccupied for centuries, even though men knew of its existence, now became suddenly of importance. Frenchmen needed it for their fur trade; Britons for colonization. They fought for it.

Here as in India the natives had been won by the diplomatic French, but their aid proved of no avail. The British Parliament sent over General Braddock in 1757, and he perished with a large portion of his army in the celebrated ambuscade from which Washington escaped.[17] For a time French energy made the war seem not unequal; but the number of French in America was small; the home Government of Louis XV seemed wholly lost in sloth and indifferent to the result. The English Government was doggedly resolute. Its unwilling subjects, the French colonists of Acadia, were driven from their homes.[18] Troops were poured into America, and in 1759 Wolfe won his famous victory at Quebec.[19] The next year Montreal also fell into the hands of the British, and the conquest of Canada was complete.

The treaty of 1763, which ended the Seven Years' War for Prussia, brought peace also between England and France. The latter surrendered her colonial pretensions, partly in India, wholly in America, without having really exerted herself to retain them. Perhaps her experience in the Mississippi Scheme of Law had convinced her they were of but little worth.


The latter half of the reign of Frederick the Great was very different from its beginning. He had encountered war sufficient to satiate even his reckless appetite, and he clung to peace. Prussia became for a while the centre of European government and intrigue; and Frederick, by far the ablest sovereign of his time, remained until his death (1786) the leader in that system of paternal government, of kindly tyranny, which typifies the age. He husbanded the resources of his country with jealous care; he compelled his people to work, and be provident, and prosper, whether they would or no. Maria Theresa treated her subjects with much the same benevolence; and her son and successor Joseph II became the most ardent of the admirers of Frederick. Russia also came under a ruler of similar ideas, Catharine II,[20] a German princess by birth, who wedded a czar, deposed him, and, ruling in his stead, became the most Russian of the Russians. She ruled her land wisely and well, with a little more than Frederick's tyranny, a little less than his benevolence. She was cynical, as was the fashion, and her moral life shocked even that easy-going age. Also she was a philosopher, and invited Diderot, chief of the French Cyclopaedists, to dwell at her court, much as Voltaire had dwelt at Frederick's. French literature was still the literature of Europe, and both Frederick and Catharine openly despised the tongue of their own lands.

It was among these three congenial rulers, of Russia, Prussia, and young Joseph of Austria, that the scheme arose of dividing Poland among themselves.[21] This has been termed "the crime of the century," but it was in strict accordance with what the rest of Europe had attempted to do to Austria and then to Prussia. Only, the first two victims had proved unexpectedly capable of resistance, the third was more shrewdly selected. Kindly benevolent despotism had also a voice in the matter, for Poland was wretchedly misgoverned, a source of constant danger to herself and to her neighbors. It was really a kindness, as those neighbors explained, to relieve her of half her territories. So well were their successors of the next generation pleased with the results, that they took each another slice, and then, fully convinced of the ancestral wisdom and good-will, divided what was left.


The new cynicism and philosophy which was thus spreading even among monarchs, was soon destined to have most explosive results. It found expression first in a further revolt against the dominion of the Roman Church. Most of the sovereigns joined in a determined attack against the Jesuits, the enthusiastic and devoted priests who had become the mainstay of the papal power. After a long resistance, the Jesuits succumbed; their order was abolished by Pope Clement XIV in 1773.

The next startling symptom of the changing times was the rapid literary development of Germany. Its young men had been left free to think and talk. Frederick half contemptuously declared that his people might believe what nonsense they pleased so long as they remained orderly. The poet Lessing by his books roused the ancient spirit of liberty, long dormant in the German mind. Goethe and Schiller became the foremost of a crowd of younger men whose revolt at first took the form of an extravagant devotion to romance as opposed to the dull workaday world about them.[22] Pestalozzi, a Swiss, conceived the idea of reforming the world through its children, encouraging the little ones by constant, loving example to develop all the strength and goodness that was in them.[23]

Yet the first open defiance given to despotism by the fast-growing spirit of freedom came not from Europe but from America; was a revolt not against the lazy tyranny in France or the kindly tyranny of Eastern Europe, but against the constitutional government of England. When the French minister signed the treaty surrendering to England all his country's possessions in America he justified himself with a well-turned phrase, "I give her all, on purpose to destroy her."

The words seemed prophetic, England's loss came through her gain. The Indians, devoted to the French, refused to submit peacefully to the change of rule. Pontiac, often regarded as the ablest statesman of his fading race, gathered them into a widespread confederacy, and for years held the English at bay in the region of the Great Lakes.[24] The expenses involved both upon England and upon her American colonists by this strife and by the French war itself were a constant source of friction. England insisted that she had spent her substance in defence of the colonists, and should be repaid by them. They on the other hand asserted that she had fought for her own glory, and had been well repaid by her vast increases of territory both in India and America; that they had become impoverished, while she had now the richest trade in the world, and stood upon the top-most pinnacle of national grandeur with wealth pouring in to her from every quarter of the globe.

Neither side being able to convince the other by abstract argument, England exerted her authority and passed the "Stamp Act," laying new taxes on the colonists.[25] They responded with protests, argumentative, eloquent, fiery, and defiant. They refused to trade with Great Britain, and became self-supporting. Thus the obnoxious laws, instead of bringing money to the mother country, caused her heavy losses. English merchants joined the Americans in petitioning for the repeal of the offensive acts of Parliament; and soon every tax was withdrawn except a tiny one on tea, so small that the money involved was trifling. But it was not the money, it was the principle involved, which had aroused the Americans; and their resistance continued as vigorous as against the previous really burdensome taxation. The tea which King George commanded should be sent forcibly to the colonists, they refused to receive. In Boston it was dumped into the harbor.[26]

The English Parliament drew back in amazement; its members found themselves dealing, as one of them put it, with a nation of lawyers. They were wrong; they had encountered a force far more potent, a nation of freemen who had been permitted for a century and a half to rule themselves, who had reached the fullest measure of self-reliance and self-assertion. America had become earliest ripe for the Age of Revolution toward which the European middle classes, more lately left to themselves, were more slowly, but not less surely, developing.



[1] See Defeat of the Young Pretender at Culloden, page 117.

[2] See Cotton Manufacture Developed, page 341.

[3] See John Law Promotes the Mississippi Scheme, page 1.

[4] See Bursting of the South Sea Bubble, page 22.

[5] See Voltaire Directs European Thought from Geneva, page 144.

[6] See Bach Lays the Foundation of Modern Music, page 31.

[7] See First Modern Novel, page 100.

[8] See Watt Improves the Steam-engine, page 302.

[9] See Benjamin Franklin Experiments with Electricity, page 130.

[10] See Settlement of Georgia, page 44.

[11] See Rise of Methodism: Preaching of the Wesleys and of Whitefield, page 57.

[12] See Prince Eugene Vanquishes the Turks: Siege and Battle of Belgrad, page 16.

[13] See Conquests of Nadir Shah: Capture of Delhi, page 72.

[14] See Frederick the Great Seizes Silesia: Maria Theresa Appeals to the Hungarians, page 108.

[15] See Seven Years' War: Battle of Torgau, page 204.

[16] See Clive Establishes British Supremacy in India: The Black Hole of Calcutta: Battle of Plassey, page 185.

[17] See Braddock's Defeat, page 163.

[18] See Exile of the Acadian Neutrals, page 181.

[19] See Conquest of Canada: Victory of Wolfe at Quebec, page 229.

[20] See Usurpation of Catharine II in Russia, page 250.

[21] See First Partition of Poland, page 313.

[22] See Intellectual Revolt of Germany, page 347.

[23] See Pestalozzi's Method of Education, page 364.

[24] See Conspiracy of Pontiac, page 267.

[25] See American Colonies Oppose the Stamp Act, page 289.

[26] See Boston Tea Party, page 333.


A.D. 1716


Known under the various titles of the "Mississippi Scheme," the "Mississippi Bubble," and the "System," the financial enterprise originated by John Law, under authority of the French government, proved to be the most disastrous experiment of the kind ever made by a civilized state.

Louis XIV ended his long reign in 1715, leaving his throne to his great-grandson, a child of five years, Louis XV. The impoverished country was in the hands of a regent, Philippe, Duke of Orleans, whose financial undertakings were all unfortunate. John Law, the son of a Scotch banker, was an adventurer and a gambler who yet became celebrated as a financier and commercial promoter. After killing an antagonist in a duel in London, he escaped the gallows by fleeing to the Continent, where he followed gaming and at the same time devised financial schemes which he proposed to various governments for their adoption. His favorite notion was that large issues of paper money could be safely circulated with small security.

Law offered to relieve Orleans from his financial troubles, and the Regent listened with favor to his proposals. In 1716 Law, with others, organized what he called the General Bank. It was ably managed, became popular, and by means of it Law successfully carried out his paper-currency ideas. His notes were held at a premium over those of the government, whose confidence was therefore won. Two years later Law's institution was adopted by the state and became the Royal Bank of France. The further undertakings of this extraordinary "new light of finance," the blowing and bursting of the great "bubble," are recorded by Thiers, the French statesman and historian, himself eminent as his country's chief financier during her wonderful recovery after the Franco-German War.

Law was always scheming to concentrate into one establishment his bank, the administration of the public revenues, and the commercial monopolies. He resolved, in order to attain this end, to organize, separately, a commercial company, to which he would add, one after another, different privileges in proportion to its success, and which he would then incorporate with the General Bank. Constructing thus separately each of the pieces of his vast machine, he proposed ultimately to unite them and form the grand whole, the object of his dreams and his ardent ambition.

An immense territory, discovered by a Frenchman, in the New World, presented itself for the speculations of Law. The Chevalier de la Salle, the famous traveller of the time, having penetrated into America by Upper Canada, descended the river Illinois, arrived suddenly at a great river half a league wide, and, abandoning himself to the current, was borne into the Gulf of Mexico. This river was the Mississippi. The Chevalier de la Salle took possession of the country he had passed through for the King of France, and gave it the beautiful name of Louisiana.

There was much said of the magnificence and fertility of this new country, of the abundance of its products, of the richness of its mines, which were reported to be much more extensive than those of Mexico or Peru. Law, taking advantage of this current of opinion, projected a company which should unite the commerce of Louisiana with the fur trade of Canada. The Regent granted all he asked, by an edict given in August, 1717, fifteen months after the first establishment of the bank.

The new company received the title of the "West Indian Company." It was to have the sovereignty of all Louisiana on the condition only of liege homage to the King of France, and of a crown of gold of thirty marks at the commencement of every new reign. It was to exercise all the rights of sovereignty, such as levying troops, equipping vessels-of-war, constructing forts, establishing courts, working mines, etc. The King relinquished to it the vessels, forts, and munitions of war which belonged to the Crozat Company,[27] and conceded, furthermore, the exclusive right of the fur trade of Canada. The arms of this sovereign company represented the effigy of an old river-god leaning upon a horn of plenty.

Law revolved in his mind many other projects relating to his Western company. He spoke, at first mysteriously, of the benefits which he was preparing for it. Associating with a large number of noblemen, whom his wit, his fortune, and the hope of considerable gains attracted around him, he urged them strongly to obtain for themselves some shares, which would soon rise rapidly in the market. He was himself soon obliged to buy some above par. The par value being five hundred francs, two hundred of them represented at par a sum of one hundred thousand francs. The price for the day being three hundred francs, sixty thousand francs were sufficient to buy two hundred shares. He contracted to pay one hundred thousand francs for two hundred shares at a fixed future time; this was to anticipate that they would gain at least two hundred francs each, and that a profit of forty thousand francs could be realized on the whole. He agreed, in order to make this sort of wager more certain, to pay the difference of forty thousand francs in advance, and to lose the difference if he did not realize a profit from the proposed transfer.

This was the first instance of a sale at an anticipated advance. This kind of trade consisted in giving "earnest-money" called a premium, which the purchaser lost if he failed to take the property. He who made the bargain had the liberty of rescinding it if he would lose more by adhering to it than by abandoning it. No advantage would accrue to Law for the possible sacrifice of forty thousand francs, unless at the designated time the shares had not been worth as much as sixty thousand francs, or three hundred francs each; for having engaged to pay one hundred thousand francs for what was worth only fifty thousand, for instance, he would suffer less to lose his forty thousand francs than to keep his engagement. But, evidently, if Law did wish by this method to limit the possible loss, he hoped nevertheless not to make any loss at all; and, on the contrary, he believed firmly that the two hundred shares would be worth at least the hundred thousand francs, or five hundred francs each, at the time fixed for the expiration of the contract. This large premium attracted general attention, and people were eager to purchase the Western shares. They rose sensibly during the month of April, 1719, and went nearly to par. Law disclosed his projects; the Regent kept his promise, and authorized him to unite the great commercial companies of the East and West Indies.

The two companies of the East Indies and of China, chartered in 1664 and 1713, had conducted their affairs very badly: they had ceased to carry on any commerce, and had underlet their privileges at a charge which was very burdensome to the trade. The merchants who had bought it of them did not dare to make use of their privileges, for fear that their vessels would be seized by the creditors of the company. Navigation to the East was entirely abandoned, and the necessity of reviving it had become urgent. By a decree of May, 1719, Law caused to be accorded to the West India Company the exclusive right of trading in all seas beyond the Cape of Good Hope. From this time it had the sole right of traffic with the islands of Madagascar, Bourbon, and France, the coast of Sofola in Africa, the Red Sea, Persia, Mongolia, Siam, China, and Japan. The commerce of Senegal, an acquisition of the company which still carried it on, was added to the others, so that the company had the right of French trade in America, Africa, and Asia. Its title, like its functions, was enlarged; it was no longer called the "West India Company," but the "Indian Company." Its regulations remained the same as before. It was authorized to issue another lot of shares, in order to raise the necessary funds either to pay the debts of the companies which it succeeded or for organizing the proper establishments. Fifty thousand of these shares were issued at a par of five hundred francs, which made a nominal capital of twenty-five millions. But the company demanded five hundred fifty francs in cash for them, or a total of twenty-seven millions two hundred fifty thousand francs, inasmuch as it esteemed its privileges as very great and its popularity certain. It required fifty francs to be paid in advance, and the remaining five hundred in twenty equal monthly payments. In case the payments should not be fully made, the fifty francs paid in advance were forfeited by the subscriber. It was nothing but a bargain made at a premium with the public.

The prompt realization of the promises of Law, the importance and extent of the last privileges granted to the company, the facilities accorded to the subscribers, everything, induced a subscription to the new shares. The movement became animated. One could, by the favorable terms offered, by paying out five hundred fifty francs, obtain eleven shares instead of one, and thus, with a little money, speculate to a considerable amount. To this method of attracting speculators Law added another; he procured a decision that no one should subscribe for the new shares without exhibiting four times as many old ones. It was necessary, therefore, to hasten to obtain them in order to fulfil the requisite condition. In a short time they were carried up to par, and far above that. From three hundred francs, at which they were at the start, they rose to five hundred, five hundred fifty, six hundred, and seven hundred fifty francs; that is, they gained 150 per cent. These second shares were called the "daughters," to distinguish them from the first.

Law contemplated at last the completion of his project by uniting the collection of the revenues to the other privileges of the Indian Company, and redeeming the national debt. This was the greatest and most difficult part of his plan.

The national debt was fifteen to sixteen hundred millions, partly in contracts for perpetual annuities, partly in State notes which would soon be due. The interest on the debt was eighty millions, or one-half the revenue of the government. Some combination was necessary to meet the state notes at their maturity, and to reduce the annual charges which the public treasury could no longer sustain.

Law conceived the idea of substituting the company for the government, and converting the whole national debt into shares in the Indian Company. To accomplish this he wished the company to lend the treasury the fifteen to sixteen hundred millions which would redeem the debt; and that, to obtain this enormous sum, it should issue shares to that amount. In this manner the fifteen or sixteen hundred millions furnished to the government by the company, and paid out by the government to its creditors, must return to the company by the sale of its shares. Let us see the means which Law had devised to insure the success of his scheme. The government would pay 3 per cent. interest for the sum loaned to it, which would make forty-five or forty-eight millions a year. The treasury would thus effect an annual saving of thirty-two or thirty-five millions in the interest on the debt. In return, the collection of the revenue must be transferred to the company, notwithstanding that it had been actually granted to the brothers Paris. The collection would pay the collectors a net profit of fifteen or sixteen millions. The company, receiving 3 per cent. interest on the capital invested, and reaping from another source a profit of fifteen or sixteen millions, would be in a position to pay 4 per cent. on the sixteen hundred millions of the debt converted into shares.

The profits from commerce and its future success might soon enable it to increase this dividend. According to the prevailing rates of interest, which had fallen to 3 per cent. since the establishment of the bank, this was a sufficient remuneration on the shares. They had, besides, the hope of increasing their capital. The shares having, in fact, doubled in value during the opposition of the "Antisystem," they ought to increase still more rapidly since they were relieved from this opposition. The expectation that the fifteen or sixteen hundred millions of the debt would be invested in the shares was well founded. There was even a certainty of it; for this immense capital, forcibly expelled from its investment in state securities, could find no other place for investment than in the company.

This plan of Law's was vast and bold. Its success would liquidate the state debt and diminish the annual charges on the treasury, reducing the interest from eighty millions to forty-five or forty-eight millions. The annual charges from which the treasury was to be relieved were to be paid from the profits on the collection of the revenue and the contingent profits of commerce. The whole operation was to pay the creditors of the state 3 per cent. per annum, and the profits and monopolies heretofore granted to farmers of the revenue and commercial companies. This 3 per cent. interest, these profits, and these monopolies, as we shall soon see, might easily amount to the sum of eighty millions annually, which the creditors were formerly paid. Thus far they were not defrauded by this forced conversion of securities; a credit entirely new was substituted for one which was worn out; an establishment had been created, which, combining the functions of a commercial bank and the administration of the finances, must become the most colossal financial power ever known.

The first subscription having been taken up in a few days, Law opened a new one on September 28th, for the same amount and on exactly the same conditions as the preceding.

The eagerness of subscribers was the same. The creditors passed whole days at the offices of the treasury to obtain their receipts, and there were some even who had their meals brought to them there, so that they might not lose their turn in the ranks. The state notes were, of course, much in demand, and had rapidly risen to par. They had even given rise to a most reprehensible speculation. A confidential clerk of Law, the Prussian Versinobre, having known in advance of the decree regarding the payment, abused his knowledge of the secret, and caused to be bought by brokers with whom he was associated a large amount of state notes at 50 or 60 per cent. below their nominal value, and employed them for the subscriptions when they were received at par. When it is considered that the subscriptions, already, were sold at a large advance, and that by means of the state notes they were bought at about half price, it will be understood what a profit this company of brokers must have realized.

Those who intended to subscribe had accomplished comparatively little by obtaining receipts or state notes; it was still necessary to go to the Hotel de Nevers, where the subscriptions were received. The entrances there were crowded to suffocation. The hall servants made considerable sums by subscribing for those who could not get through the crowd to the offices. Some adventurers, assuming the livery of Law, performed this service, charging and obtaining a very large fee. The most humble employees of the company became patrons who were very much courted. As to the higher officers and Law himself, they received as much adulation as if they were the actual dispensers of the favors of Fortune. The approaches to Law's residence were encumbered with carriages. All that was most brilliant among the nobility of France came to beg humbly for the subscriptions, which were already much above the nominal price of shares, and which were sure to rise much higher. By a clause creating the company, the ownership of the shares entailed nothing derogatory to rank. The nobility, therefore, could indulge in this speculation without endangering its titles. It was as much in debt as the King, thanks to its prodigality and the long wars of that century, and it sought to win, at least, the amount of its debt by fortunate speculations. It surrounded, it fawned upon Law, who, very anxious to gain partisans, reserved very few shares for himself, but distributed them among his friends of the court.

This new subscription was also taken up in a few days. If we reflect that fifty millions in cash was sufficient to secure five hundred millions of each issue, we shall understand how the state notes which remained in market and the receipts already delivered would suffice to monopolize the shares offered to the public. The creditors who had not liquidated their claims—and the greater number had not—could not avail themselves of the right to subscribe for shares, and were obliged to buy them in the market at an exorbitant price. The shares subscribed for at the Hotel de Nevers for five thousand francs were re-sold in the Rue Quincampoix for six, seven, and eight thousand francs. To the need of having some of this investment was joined the hope of seeing the shares rise in the market to an indefinite extent, and it is not surprising that the eagerness to obtain them soon increased to frenzy. In order to satisfy this demand a third subscription was opened on October 2d, three days after the second. Similar in every respect to the first two, it ought to bring in a capital of five hundred millions and complete the fifteen hundred millions which the company needed to redeem the public debt.

The concourse of people was as great as ever at the treasury, where the receipts were given and at the Hotel de Nevers, where the applications for shares were received. The occasion of this eagerness is evident, since that which was obtained at the Hotel de Nevers for five thousand francs was worth seven and eight thousand in the Rue Quincampoix. This new issue at five thousand francs caused the rates in the Rue Quincampoix to diminish: in an instant they were below five thousand francs—even as low as four thousand—so blind were these movements, and, so to speak, convulsive, during this period of feverish excitement. There was no possible reason for selling in one place for four thousand francs that for which they paid five thousand at another. But this phenomenon lasted only a few hours; the rates rose again rapidly, and, the subscription being taken up, the shares sold again for seven and eight thousand francs. The crafty brokers had already had two opportunities of making some profitable operations.

Having obtained the state notes at a very small price, they procured shares at the most moderate rates, between five hundred and a thousand francs; then they sold them for from seven to eight thousand francs; and October 2d, the day of the decline, they repurchased them for four thousand, to sell them again the next day for seven or eight thousand. It will be seen how they must have made money with these opportunities.

It was no longer a few scattered groups which were seen in the Rue Quincampoix, but a compact crowd engaged in speculating from morning till night. The subscriptions had been divided into coupons, transferable, like notes, to the bearer by an indorsement simply formal. During the course of October the shares had already risen above ten thousand francs, and it was impossible to know where they would stop.

The end of the month of December, 1719, was the term of this delusion of three months. A certain number of stock-jobbers, better advised than others, or more impatient to enter upon the enjoyment of their riches, combined to dispose of their shares. They took advantage of the rage which led so many to sell their estates—they purchased them, and thus obtained the real for the imaginary. They established themselves in splendid mansions, upon magnificent domains, and made a display of their fortunes of thirty or forty millions. They possessed themselves of precious stones and jewels, which were still eagerly offered, and secured solid value in exchange for the semblance of it, which had become so prized by the crowd of dupes. The first effect of this desire to realize was a general increase in the price of everything. An enormous mass of paper being put in the balance with the existing quantity of merchandise and other property, the more paper there was offered against purchasable objects the more rapid the increase became. Cloth which heretofore brought fifteen to eighteen francs a yard rose to one hundred twenty-five francs a yard. In a cook-shop a "Mississippian," bidding against a nobleman for a fowl, ran the price up to two hundred francs.

From this instant the shares suffered their first decline, and a heavy uneasiness began to spread abroad. The extent of the fall was not measured by those whom it menaced; but people wondered, doubted, and began to be alarmed. The shares declined to fifteen thousand francs. However, the bank-notes were not yet distrusted. The bank was, in fact, entirely distinct from the company, and their fate, up to this time, appeared in no way dependent the one on the other. The notes had not undergone any fictitious and extraordinary advance. Large amounts had been issued, certainly, but for gold and silver, and upon the deposit of shares. The portion which had been issued upon the deposit of shares partook of the danger of the shares themselves; but no one thought of that, and the bank-notes still possessed the entire confidence of the public; only they no longer had the same advantage over specie since the latter had been so much sought by the "realizers." The notes already began to be presented at the bank for coin, and the vast reserve which it had possessed began to diminish perceptibly.

Law did then what governments do so often, and always with ill-success: he resorted to forced measures. He declared, in the first place, by decree, that the bank-notes should always be worth 5 per cent. more than coin.

In consideration of this superiority in value the prohibition which forbade the deposits of gold and silver for bills, at Paris, was taken off, so that notes could be procured at the bank for coin. This permission was simply ridiculous, for no one now wished to exchange specie for paper, even at par. But this was not all; the decree declared that thereafter silver should not be used in payments of over one hundred francs nor gold in those over three hundred francs. This was forcing the circulation of notes in large payments, and that of specie in small, and was designed to accomplish by violence what could only be expected from the natural success of the bank.

These measures did not bring any more gold and silver to the bank. The necessity of using bank-notes in payment of over three hundred francs gave them a certain forced employment, but did not procure them confidence. Notes were used for large payments, but coin was amassed secretly as a value more real and more assured. The creditors of the state ceased to carry their receipts to the Rue Quincampoix, because they already distrusted the shares; they could not decide to buy real estate, because the price had been quadrupled; they suffered the most painful anxiety, and in their turn embarrassed the holders of shares who needed the receipts to pay their instalments of one-tenth. The catastrophe approached, and nothing could avert it, unless some magic wand could give the company an income of four or five hundred millions a year, which was now only seventy or eighty millions.

Law, adding measures to measures, at last prohibited the circulation of gold, because this metal was, by its convenience, a rival of bank-notes infinitely more dangerous than silver. He then announced an approaching reduction in the value of coin, which he had raised by a decree in February, only to reduce it again in a short time. The mark, in silver, raised from sixty to eighty francs, was reduced to seventy on April 1st, and sixty-five on May 1st. But this measure was utterly insufficient to bring it to the bank.

The situation grew worse every day; the issue of notes to pay for the shares presented at the bank had risen to two billions six hundred ninety-six millions; their depreciation increased; and creditors of every description, being paid in paper which was at a discount of 60 per cent., complained bitterly of the theft authorized by law.

In this juncture there remained but one step to be taken. As the necessary sacrifice had not been made in the first place, and the shares abandoned to their fate in order to protect the notes, both must now be sacrificed, shares and notes together, in order to finish this wicked fiction. The falsehood of this nominal value, which obliged men to receive at par what was depreciated 30 or 40 per cent., could not be prolonged. The immediate reduction of the nominal value of the shares and bank-notes was the only resource. Sacrifices cannot be too hastily made when they are inevitable.

M. d'Argenson, although dismissed from the treasury, still remained keeper of the seals; he had risen in the esteem of the Regent as Law had declined, and he advised the reduction of the nominal value of the shares and notes as an urgent necessity. Law, who saw in this reduction an avowal of the fiction in the legal values, and a blow which must hasten the fall of the "System," opposed it with his whole strength. Nevertheless, M. d'Argenson prevailed. On May 21, 1720, a decree, which remains famous in the history of the "System," advertised the progressive reduction in the value of shares and notes. This reduction was to begin on the very day of the publication of the decree, and to continue from month to month until December 1st. At this last term the shares were to be estimated at five thousand francs, and a bank-note of ten thousand francs at five thousand; one of a thousand at five hundred, etc. The notes were thus reduced 50 per cent., and the shares only four-ninths per cent. Law, although opposed to the decree, consented to promulgate it.

Scarcely was it published when a fearful clamor was raised on all sides. The reduction was called a bankruptcy; the government was reproached with being the first to throw discredit upon the values which it had created, with having robbed its own creditors, a number of whom had just been paid in bank-notes, even as late as the preceding day—in a word, with assailing the fortunes of all the citizens. The crowd wished to sack Law's hotel and to tear him in pieces. Nothing that could have happened would have produced a greater clamor; but in times like those it was not only necessary not to fear these clamors: it was even a duty to defy them.

The reply to the complaints would have soon been evident to the intelligence of everybody. Without doubt the creditors of the state, and some private individuals, who had been paid in bank-notes, were half ruined by the reduction, but this was not the fault of the decree of May 21st—the real reduction was long before this; the decree only stated a loss already experienced, and the notes were worth still less than the decree declared. Because a number of creditors had been ruined by the falsity of nominal values, was it a reason to continue the fiction that it might extend the ruin? On the contrary, it was necessary to put an end to it, to save others from becoming victims. The official declaration of the fact, although it was known before, must produce a shock and hasten the discredit, but it was of little importance that it was hastened, since it was inevitable.

The public thought Law the author of this measure, advised exclusively by M. d'Argenson, and he became the sole object of hatred. The Parliament, making common cause with the public, thought it a good opportunity to take up arms. It did not perceive, in its blind hatred of the "System," that it was going to render a service to its author, and that to declare itself against the reduction of the bank-notes was to maintain that the values created by Law had a solid foundation. It assembled on May 27th to demand a revocation of the decree of the 21st. At the very moment when it was deliberating, the Regent sent one of his officers to prohibit all discussion, announcing the revocation of the decree.

The Regent had the weakness to yield to the public clamor. Had the decree been bad, its revocation would have been worse. To declare that the shares and notes were still worth what they purported to be availed nothing, for no one believed it, and their credit was not restored by it. A legal falsehood was reaffirmed, and, without rendering any service to those who were already ruined, the ruin of those who were obliged to receive the notes at their nominal value was insured. The decree of May 21st, wise if it had been sustained, became disastrous as soon as it was revoked. Its only effect was to hasten the general discredit, without the essential advantage of reestablishing a real, legal value.

We have just said that the bank was not obliged to pay notes of over one hundred francs. It paid them slowly, and employed all imaginable artifices to avoid the payment of them. Nevertheless, its coffers were almost exhausted, and it was necessary to authorize it to confine its disbursements to the payment of notes of ten francs only. The people rushed to the bank in crowds to realize their notes of ten francs, fearing that these would soon share the fate of those of one hundred. The pressure was so great that three persons were suffocated. The indignant mob, ready for any excess, already menaced the house of Law. He fled to the Palais Royal to seek an asylum near the Regent. The mob followed him, carrying the bodies of the three who had been suffocated. The carriage which had just conveyed him was broken to pieces, and it was feared that even the residence of the Regent would not be respected.

The gates of the court of the Palais Royal had been closed; the Duke of Orleans, with great presence of mind, ordered them to be opened. The crowd rushed into the court and suddenly stopped upon the steps of the palace. Leblanc, the chief of police, advanced to those who bore the corpses, and said, "My friends, go place these bodies in the Morgue, and then return to demand your payment." These words calmed the tumult; the bodies were carried away and the sedition was quelled.

Severities against the rich "Mississippians" were commenced in this same month of October. For a long time it had been suspected that the government, following an ancient usage, would deprive them, by means of visas and chambres-ardentes, of what they had acquired by stock-jobbing. A list was made of those known to have speculated in shares. A special commission arbitrarily placed on this list the names of those whom public opinion designated as having enriched themselves by speculation in paper. They were ordered to deposit a certain number of shares at the offices of the company, and to purchase the required number if they had sold their own. The "realizers" were thus brought back by force to the company which they had deserted. Eight days were given to speculators of good faith to make, voluntarily, the prescribed deposit. To prevent flight from the country, it was prohibited, under pain of death, to travel without a passport.

These measures increased still more the decline of the shares. All those whose names were not upon the list of rich speculators, and who could not tell what became of the shares not yet deposited, hastened to dispose of all they retained.

The "System" wholly disappeared in November, 1720, one year after its greatest credit. All the notes were converted into annuities or preferred shares, and all the shares were deposited with the company. Then a general visa was ordered, consisting of an examination of the whole mass of shares, with the purpose of annulling the greater portion of those which belonged to the enriched stock-jobbers.

Law, foreseeing the renewed rage which the visa would excite, determined to leave France. The hatred against him had been so violent since the scene of July 17th that he had not dared to quit the Palais Royal. The following fact will give an idea of the fury excited against him: A hackman, having a quarrel with the coachman of a private carriage, cried out, "There is Law's carriage!" The crowd rushed upon the carriage, and nearly tore in pieces the coachman and his master before it could be undeceived.

Law demanded passports of the Duke of Orleans, who granted them immediately. The Duke of Bourbon, made rich by the "System," felt under obligations to Law, and offered money and the carriage of Madame de Prie, his mistress. Law refused the money and accepted the carriage. He repaired to Brussels, taking with him only eight hundred louis. Scarcely was he gone when his property, consisting of lands and shares, was sequestrated.


[27] A company headed by Anthony Crozat. It was chartered in 1712, and formed a commercial monopoly in Louisiana.—ED.



A.D. 1717


This struggle marked the disastrous end of a determined effort of the Ottoman empire to recover lost possessions. It also resulted in giving all Hungary, with Belgrad and a part of Servia, permanently to Austria. After their last great invasion of Austrian territory and their crushing defeat by Sobieski and the Imperialists (1683), the Turks suffered many losses of territory at the hands of various European powers. In 1696 Peter the Great took from them Azov, an important entrance to the Black Sea. By the treaty of the Pruth (1711) this, with other Russian possessions, was again ceded to the Turks.

The temporary success led them to seek further recoveries. Their aim was chiefly directed against Austria and Venice, which had aggrandized themselves at the expense of the Moslem power. Turkish victories caused the Venetians to call in the aid of Austria. The Austrian intervention not only saved Venice, but once more checked the Turkish arms.

The Emperor Charles VI appointed as leader of the Austrian forces Prince Eugene of Savoy, already distinguished through a long series of wars as one of the greatest soldiers of his time, the companion of Marlborough. In 1716 Eugene defeated the grand vizier at Temesvar, and in the following year took Belgrad and destroyed the Turkish army, as told in his own racy and cavalier style.

From all sides men flocked to serve under me. There were enough to form a squadron of princes and volunteers. Among the former a Prince of Hesse, two of Bavaria, a Bevern, a Culenbach, one of Wuertemberg, two of Ligne, one of Lichtenstein, of Anhalt-Dessau, the Count of Charolai, the Princes of Dombes, of Marsillac, of Pons, etc.

The Emperor made me a present of a magnificent diamond crucifix, and strongly assured me that all my victories came, and would come, from God; this was getting rid of gratitude toward me; and I set off for Futack, where I assembled my army toward the end of May, 1717.

It was necessary to possess myself of Belgrad, which for three centuries had been so many times taken and retaken. Luckily, I did not find there the cordelier, John de Capistran, who, with the crucifix in his hand, and in the hottest part of the fire during the whole day, defended the place so well: and Hunyady, who commanded there, against Mahomet II in 1456. Hunyady died of his wounds. The Emperor lost Belgrad; Mahomet lost an eye, and the cordelier was canonized.

Unfortunately the Grand Seignior had but too well replaced the wrong-headed grand vizier, who had been killed. It was the Pacha of Belgrad, who supplied the vacancy, called Hastchi Ali, who made the most judicious arrangements for the preservation of the place, and caused me a great deal of embarrassment. On June 10th I passed the Danube: my volunteer princes threw themselves into boats to arrive among the first, and to charge the spahis with some squadrons of Mercy, which had already passed below Panczova, to protect the disembarkation of some, and the bridge constructed for the others, with eighty-four boats. On the 19th I went, with a large escort, to reconnoitre the place where I wished to pitch my camp. Twelve hundred spahis rushed upon us with unequalled fury, and shouted "Allah! Allah!" I know not why one of their officers broke through a squadron which was in front, to find me at the head of the second, where I placed myself from prudential motives, having many orders to give. He missed me, and I was going to obtain satisfaction with my pistol when a dragoon at my side knocked him under his horse. On the same day we had a naval combat, which lasted two hours; and our saics having the advantage I remained master of the operations on the Danube. On the 20th I continued working on the lines of contravallation, under a dreadful fire from the place. Toward the end of June I advanced my camp so near Belgrad that the bullets were constantly flying over my head. A storm destroyed all my bridges: and, but for the courage of a Hessian officer, in a redoubt, I do not know how I should have been able to reestablish the one upon the Save.

Wishing to take the place on the side next the water, I caused a fort at the mouth of the Donawitz to be attacked by Mercy, who fell from his horse, in an apoplectic fit. They carried him away, thinking him dead. He was afterward successfully cured; but, being informed of his accident I went to replace him, and the fort was taken. The Prince of Dombes narrowly escaped being killed at my side by a bullet which made my horse rear. Marcilly was killed in bravely defending a post which I had charged him to intrench. He demanded succor from Rudolph Heister, who refused him, and who was deservedly killed as a punishment for his cowardice, by a cannon-ball which reached him behind his chevaux-de-frise. I arrived, accidentally at first, with a large escort; I sent for a large detachment; I halted, and completely beat the janizaries, leaving, indeed, five hundred men killed upon the field, Taxis, Visconti, Suger, etc. The Pacha of Roumelia, the best officer of the Mussulmans, lost his life also.

On July 22d my batteries were finished. I bombarded, burned, and destroyed the place so much that they would have capitulated if they had not heard that the grand vizier had arrived at Missa, on the 30th, with two hundred fifty thousand men.

On August 1st we saw them on the heights which overlooked my camp, extending in a semicircle from Krotzka as far as Dedina. The Mussulmans formed the most beautiful amphitheatre imaginable, very agreeable to look at, excellent for a painter, but hateful to a general. Enclosed between this army and a fortress which had thirty thousand men in garrison, the Danube on the right, and the Save on the left, my resolution was formed. I intended to quit my lines and attack them, notwithstanding their advantage of ground: but the fever, which had already raged in my army, did not spare me. Behold me seriously ill, and in my bed, instead of being at the head of my troops, whom I wished to lead the road to honor.

I can easily conceive that this caused a little uneasiness at the court, in the city, and even in my army. It required boldness and good-fortune to extricate one's self from it. The general who might have succeeded me would, and indeed, almost must, have thought that he should be lost if he retreated, and be beaten if he did not retreat. Every day made our situation worse. The numerous artillery of the Turks had arrived on the heights of which I have spoken. We were so bombarded with it, as well as with that from the garrison, that I knew not where to put my tent, for, in going in and out, many of my domestics had been killed. In the small skirmishes which we often had with the spahis, my young volunteers did not fail to be among them, discharging their pistols, though cannon-balls intermingled also. And one day, D'Esrade, the governor of the Prince of Dombes, had his leg shot off by his side, and one of his pages was killed. All our princes, whom I have enumerated above, distinguished themselves, and loved me like their father.

I had caused the country in the rear of the grand vizier's army to be ravaged: but these people, as well as their horses and especially their camels, will live almost upon nothing. Scarcely an hour passed in which I did not lose a score of men by the dysentery, or by the cannon from the lines, which the infidels advanced more and more every night toward my intrenchments. I was less the besieger than the besieged. My affairs toward the city went on better. A bomb which fell into a magazine of powder completed its destruction and occasioned the loss of three thousand men.

At length I recovered from my illness; and, on August 15th, notwithstanding the ill-advice of persons who were not fond of battles, the matter was fixed. I calculated that listlessness and despair would produce success.

I did not sleep, as Alexander did before the battle of Arbela; but the Turks did, who were no Alexanders: opium and predestination will make philosophers of us. I gave brief and explicit instructions touching whatever might happen. I quitted my intrenchments one hour after midnight: the darkness first and then a fog rendered my first undertakings mere chance. Some of my battalions, on the right wing, fell, unintentionally, while marching, into a part of the Turkish intrenchments. A terrible confusion among them, who never have either advanced posts or spies; and, among us, a similar confusion, which it would be impossible to describe: they fired from the left to the centre, on both sides, without knowing where. The janizaries fled from their intrenchments: I had time to throw into them fascines and gabions, to make a passage for my cavalry who pursued them, I know not how: the fog dispersed and the Turks perceived a dreadful breach. But for my second line, which I ordered to march there immediately, to stop this breach, I should have been lost. I then wished to march in order: impossible! I was better served than I expected. La Colonie, at the head of his Bavarians, rushed forward and took a battery of eighteen pieces of cannon. I was obliged to do better than I wished. I sustained the Bavarians; and the Turks, after having fled to the heights, lost all the advantages of their ground. A large troop of their cavalry wished to charge mine, which were too much advanced; a whole regiment was cut in pieces; but two others, who arrived opportunely to their aid, decided the victory. It was then that I received a cut from a sabre; it was, I believe, my thirteenth wound, and probably my last. Everything was over at eleven o'clock in the morning. Viard, during the battle, retained the garrison of Belgrad, which capitulated the same day. I forgot that there was no Boufflers there: I played the generous man: I granted the honors of war to the garrison, who, not knowing what they meant, did not avail themselves of them. Men, women, and children, chariots and camels, issued forth all at once, pell-mell, by land and by water.

At Vienna the devotees cried out, "A miracle!" those who envied me cried out, "Good-fortune!" Charles VI was, I believe, among the former: and Guido Stahrenberg among the latter. I was well received, as might have been expected.

Here is my opinion respecting this victory, in which I have more cause for justification than for glory; my partisans have spoken too favorably of it, and my enemies too severely. They would have had much more reason to propose cutting off my head on this occasion than on that of Zenta, for there I risked nothing. I was certain of conquering: but here, not only I might have been beaten, but totally ruined and lost in a storm, for the enemy's artillery to the left, on the shores of the Danube, had destroyed my bridges. I was, indeed, superior in saics and in workmen and artillerymen to protect or repair them: I had a corps also at Semlin.

Could I anticipate the tardiness or disinclination of the authorities who engaged in this war, where there were so many vices of the interior in administration, and so much ignorance in the chiefs of the civil and commissariat departments? Hence it was that I was in want of everything necessary to commence the siege, and to take Belgrad before the arrival of the grand vizier, and which hindered me afterward from checking him on the heights. This, however, I should have done—but for my cursed fever—before his artillery arrived. And then that unlucky dysentery, which put my army into the hospital, or rather into the burying-ground, for each regiment had one behind its camp—could I anticipate that also? These were the two motives which induced me to attack, and to risk all or nothing, for I was as certainly lost one way as another. I threw up intrenchments against intrenchments: I knew a little more upon that subject than my comrade the grand vizier; and I had plenty of troops in health to guard them. I obliged him for want of provisions—for, as I have already said, I caused all the country in his rear to be ravaged—to decamp, and, consequently, Belgrad to surrender. Thus, if this manuscript should be read, give me neither praise, my dear reader, nor blame. After all, I extricated myself, perhaps, as Charles VI said, his confessor, and the pious souls who trust in God, and who wished me at the Devil, by the protection of the Virgin Mary, for the battle was fought on Assumption Day.

Europe was getting embroiled elsewhere. Some charitable souls advised the Emperor to send me to negotiate at London, reckoning that they might procure for another the easy glory of terminating the war.

I was not such a fool as to fall into this snare, and I set off for Hungary at the commencement of June, with a fine sword worth eighty thousand florins which the Emperor had presented to me.


A.D. 1720


Never, perhaps, was there a time when rash monetary speculation seized with a firmer grip upon people and governments than during the early part of the eighteenth century. Concurrently with the delusive "Mississippi Scheme" of John Law (1717), which resulted in financial panic in France, a similarly disastrous enterprise was carried on in England. This was the attempt to turn the South Sea Company into a concern for enriching quickly both its private and its governmental investors. The collapse of this scheme, in the same year as that of Law's, caused even more serious and widespread ruin.

Thiers' relation of the origin and development of the South Sea Company, of the forming and collapse of the "bubble," and of the spread of the speculative mania which manifested itself in so many other extravagant projects, makes a fitting counterpart to this historian's narrative of the rise and fall of the contemporary scheme in his own country.

The South Sea Company was originated by the celebrated Harley, Earl of Oxford, in the year 1711, with the view of restoring public credit, which had suffered by the dismissal of the Whig ministry, and of providing for the discharge of the army and navy debentures and other parts of the floating debt, amounting to nearly ten millions sterling. A company of merchants, at that time without a name, took his debt upon themselves, and the government agreed to secure them for a certain period the interest of 6 per cent. To provide for this interest, amounting to six hundred thousand pounds per annum, the duties upon wines, vinegar, India goods, wrought silks, tobacco, whale-fins, and some other articles were rendered permanent. The monopoly of the trade to the South Seas was granted, and the company, being incorporated by act of Parliament, assumed the title by which it has ever since been known. The minister took great credit to himself for his share in this transaction, and the scheme was always called by his flatterers "the Earl of Oxford's masterpiece."

Even at this early period of its history the most visionary ideas were formed by the company and the public of the immense riches of the eastern coast of South America. Everybody had heard of the gold and silver mines of Peru and Mexico; everyone believed them to be inexhaustible, and that it was only necessary to send the manufactures of England to the coast to be repaid a hundred-fold in gold and silver ingots by the natives. A report industriously spread, that Spain was willing to concede four ports on the coasts of Chile and Peru for the purposes of traffic, increased the general confidence, and for many years the South Sea Company's stock was in high favor.

Philip V of Spain, however, never had any intention of admitting the English to a free trade in the ports of Spanish America. Negotiations were set on foot, but their only result was the assiento contract, or the privilege of supplying the colonies with negroes for thirty years, and of sending once a year a vessel, limited both as to tonnage and value of cargo, to trade with Mexico, Peru, or Chile. The latter permission was only granted upon the hard condition that the King of Spain should enjoy one-fourth of the profits, and a tax of 5 per cent. on the remainder. This was a great disappointment to the Earl of Oxford and his party, who were reminded, much oftener than they found agreeable, of the

"Parturiunt montes, nascitur ridiculus mus."

But the public confidence in the South Sea Company was not shaken. The Earl of Oxford declared that Spain would permit two ships, in addition to the annual ship, to carry out merchandise during the first year; and a list was published in which all the ports and harbors of these coasts were pompously set forth as open to the trade of Great Britain. The first voyage of the annual ship was not made till the year 1717, and in the following year the trade was suppressed by the rupture with Spain.

The name of the South Sea Company was thus continually before the public. Though their trade with the South American states produced little or no augmentation of their revenues, they continued to flourish as a monetary corporation. Their stock was in high request, and the directors, buoyed up with success, began to think of new means for extending their influence. The Mississippi scheme of John Law, which so dazzled and captivated the French people, inspired them with an idea that they could carry on the same game in England. The anticipated failure of his plans did not divert them from their intention. Wise in their own conceit, they imagined they could avoid his faults, carry on their schemes forever, and stretch the cord of credit to its extremest tension without causing it to snap asunder.

It was while Law's plan was at its greatest height of popularity, while people were crowding in thousands to the Rue Quincampoix, and ruining themselves with frantic eagerness, that the South Sea directors laid before Parliament their famous plan for paying off the national debt. Visions of boundless wealth floated before the fascinated eyes of the people in the two most celebrated countries of Europe. The English commenced their career of extravagance somewhat later than the French; but as soon as the delirium seized them they were determined not to be outdone.

Upon January 22, 1720, the House of Commons resolved itself into a committee of the whole house to take into consideration that part of the King's speech at the opening of the session which related to the public debts, and the proposal of the South Sea Company toward the redemption and sinking of the same. The proposal set forth at great length, and under several heads, the debts of the state, amounting to thirty million nine hundred eighty-one thousand seven hundred twelve pounds, which the company was anxious to take upon itself, upon consideration of 5 per cent. per annum, secured to it until midsummer, 1727; after which time the whole was to become redeemable at the pleasure of the legislature, and the interest to be reduced to 4 per cent. It was resolved, on February 2d, that the proposals were most advantageous to the country. They were accordingly received, and leave was given to bring in a bill to that effect.

Exchange Alley was in a fever of excitement. The company's stock, which had been at 130 the previous day, gradually rose to 300, and continued to rise with the most astonishing rapidity during the whole time that the bill in its several stages was under discussion. Sir Robert Walpole was almost the only statesman in the House who spoke out boldly against it. He warned them, in eloquent and solemn language, of the evils that would ensue. It countenanced, he said, "the dangerous practice of stock-jobbing, and would divert the genius of the nation from trade and industry. It would hold out a dangerous lure to decoy the unwary to their ruin, by making them part with the earnings of their labor for a prospect of imaginary wealth. The great principle of the project was an evil of first-rate magnitude; it was to raise artificially the value of the stock by exciting and keeping up a general infatuation, and by promising dividends out of funds which could never be adequate to the purpose."

The bill was two months in its progress through the House of Commons. During this time every exertion was made by the directors and their friends, and more especially by the chairman, the noted Sir John Blunt, to raise the price of the stock. The most extravagant rumors were in circulation. Treaties between England and Spain were spoken of whereby the latter was to grant a free trade to all her colonies; and the rich produce of the mines of Potosi-la-Paz was to be brought to England until silver should become almost as plentiful as iron. For cotton and woollen goods, which could be supplied to them in abundance, the dwellers in Mexico were to empty their golden mines. The company of merchants trading to the South Seas would be the richest the world ever saw, and every hundred pounds invested in it would produce hundreds per annum to the stockholder. At last the stock was raised by these means to near 400, but, after fluctuating a good deal, settled at 330, at which price it remained when the bill passed the Commons by a majority of 172 against 55.

Contrary to all expectation South Sea stock fell when the bill received the royal assent. On April 7th the shares were quoted at 310, and on the following day at 290. Already the directors had tasted the profits of their scheme, and it was not likely that they should quietly allow the stock to find its natural level without an effort to raise it. Immediately their busy emissaries were set to work. Every person interested in the success of the project endeavored to draw a knot of listeners round him, to whom he expatiated on the treasures of the South American seas. Exchange Alley was crowded with attentive groups. One rumor alone, asserted with the utmost confidence, had an immediate effect upon the stock. It was said that Earl Stanhope had received overtures in France from the Spanish government to exchange Gibraltar and Port Mahon for some places on the coast of Peru, for the security and enlargement of the trade in the South Seas. Instead of one annual ship trading to those ports, and allowing the King of Spain 25 per cent. out of the profits, the company might build and charter as many ships as it pleased, and pay no percentage whatever to any foreign potentate.

"Visions of ingots danced before their eyes," and stock rose rapidly. On April 12th, five days after the bill had become law, the directors opened their books for a subscription of a million, at the rate of three hundred pounds for every one hundred pounds capital. Such was the concourse of persons of all ranks that this first subscription was found to amount to above two millions of original stock. It was to be paid in five payments, of sixty pounds each for every one hundred pounds. In a few days the stock advanced to 340, and the subscriptions were sold for double the price of the first payment. To raise the stock still higher it was declared in a general court of directors, on April 21st, that the midsummer dividend should be 10 per cent., and that all subscriptions should be entitled to the same. These resolutions answering the end designed, the directors, to improve the infatuation of the moneyed men, opened their books for a second subscription of a million, at 4 per cent. Such was the frantic eagerness of people of every class to speculate in these funds that in the course of a few hours no less than a million and a half was subscribed at that rate.

In the mean time innumerable joint-stock companies started up everywhere. They soon received the name of "bubbles," the most appropriate that imagination could devise. The populace are often most happy in the nicknames they employ. None could be more apt than that of "bubbles." Some of them lasted for a week or a fortnight, and were no more heard of, while others could not even live out that short span of existence. Every evening produced new schemes and every morning new projects. The highest of the aristocracy were as eager in this hot pursuit of gain as the most plodding jobber in Cornhill. The Prince of Wales became governor of one company, and is said to have cleared forty thousand pounds by his speculations. The Duke of Bridgewater started a scheme for the improvement of London and Westminster, and the Duke of Chandos another. There were nearly a hundred different projects, each more extravagant and deceptive than the other. To use the words of the Political State, they were "set on foot and promoted by crafty knaves, then pursued by multitudes of covetous fools, and at last appeared to be, in effect, what their vulgar appellation denoted them to be—bubbles and mere cheats." It was computed that near one million and a half sterling was won and lost by these unwarrantable practices, to the impoverishment of many a fool and the enriching of many a rogue.

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