Chapter 15 The Gamester by Rafael Sabatini
THE ROYAL BANK
Amazing as must ever be the public history of the Laird of Lauriston, it becomes yet more amazing when we acquaint ourselves with his secret history as it now develops.
By the winter of 1718 his operations had become of an incredible scope and complexity; yet he elaborated and directed them with a mind that must at times--as we have evidence--have been distracted by the thought of Margaret Ogilvy. It has been suggested, and no doubt with truth, that only by deep immersion in affairs could he find surcease of the tormenting longings resulting from his brief encounter with this woman who had been the lodestar of his early years. His awareness that the Count of Horn had gone into banishment and that his Countess remained alone in Paris, in itself presented him with temptations which only by sweat of soul could he subdue.
It also happened that the Regent's attachment to him--his infatuation, as some describe it, for the Scot and all his arts--should have been increased by the Parliament's intrigues and the peril which had overhung him. Then, too, the subjugation of the Parliament which had followed out of that affair had so immeasurably strengthened the Regent's own position that he need no longer hesitate to indulge the Scot in the prosecution of those wider financial schemes of whose soundness Mr Law had been labouring to persuade him. In order to make him quite safe by placing him above such dangers in the future, his Bank, to the profound disgust of Noailles and his friends, was by royal edict raised into a State institution. Its title was changed from Banque Générale to Banque Royale, and its notes were supported by the King's guarantee.
And now, at last, Mr Law was enabled to widen his vast horizons by a charter which joined to the Mississippi Company, and placed similarly under his absolute control, those other French colonial trading companies, the Compagnie des Indes Orientales, the Companie de Chine and the Compagnie du Sénégal. This amalgamation was given the title of the Compagnie des Indes, but was destined to continue to be popularly known as the Compagnie du Mississippi.
For the operations of this imposing concern, which was to hold the monopoly of the entire overseas trade of France, fresh and vast capital would be required, and for its acquisition Mr Law employed to the full those financial arts of which he had given such abundant proof and which none dared now, as formerly, to deride.
The upward move in value of the Mississippi stock was still only gradual, and it had not yet reached par, despite the marvels still related of the inexhaustible wealth of Louisiana.
If this state of things did not trouble Mr Law, who took long views, it certainly troubled his more cautious brother. William Law could foresee no early likelihood of improvement when he pondered the poor accounts that secretly reached them from overseas, so grimly in contrast with the glowing reports that were still being circulated. He pointed to the stagnation of the Mississippi stock when compared with the brisk movement of the stock of d'Argenson's anti-system, which was earning for its shareholders dividends of from twelve to fifteen per centum.
The elder Law derided his brother's timorousness. "Did you suppose that a land that has been so criminally neglected could be rendered immediately productive? The wealth is there. Perhaps not in the gold and precious stones which were just a glittering lure to dazzle dullards, but certainly in the actual land. You'll not expect mere soil to attract minds that are just mud. But, depend upon it, we'll soon be seeing it yield its riches. Overwhelmingly."
"Maybe," said William, without conviction. "Faith, it's what we'll be hoping. Meanwhile would it not have been better to wait at least until the Mississippi stock is at par before burdening ourselves with these other enterprises?"
"That stock will be at par when I so choose, which will be when we launch this Compagnie des Indes."
"I'd like fine to see it," said William, and wagged a dubious head.
"So you shall," his brother assured him, and went confidently to work to make good the assurance.
For his purposes he invented that expedient which has since come to be known as the option, and announced that before the end of the year the Royal Bank would take up the Mississippi stock at par. Two hundred shares at this level represented one hundred thousand livres, and this he undertook to pay for these two hundred, which at the moment might be purchased in the Rue Quincampoix for sixty thousand.
So as to render binding the engagement, he announced the deposit at once with the Bank of forty thousand livres, which he must forfeit if he failed to fulfil his pledge.
Since it was manifest that he could choose to do so only if there were less loss in sacrificing the deposit, it was concluded by a public gaping in astonishment that Monsieur Lass had the best of reasons for knowing that the value of the stock was about to rise. This alone sufficed to awaken a demand for it, which in itself sufficed to send the price upwards.
The real appreciation, however, was not to come until Law played his second and master card in this deep gamble. His issue in the new and all-embracing Compagnie des Indes was of fifty thousand shares with a par value of five hundred livres each, so as to make up a capital of twenty-five millions.
He placed, however, a premium on the shares, so that they were purchasable at five hundred and fifty livres in gold, thus producing a total of twenty-seven and a half millions. Of this only fifty livres were payable on application for each share, the balance of five hundred to follow in twenty equal monthly instalments, and the original fifty livres to be forfeited in the event of failure to complete.
In this manner Law, taking inspiration from the gaming table, attracted the gambler, who, by staking a comparatively trifling amount on the chance of a rise in value, became the potential owner of a block of securities representing a substantial sum.
Nor was this all. Having invented this allurement, he now imposed the further condition that shares in the new venture should be available only to shareholders in the original Mississippi Company, and that in order to acquire one of the new India Company's shares, known as daughters it was necessary to prove possession of four of the old, described as mothers.
It followed that those who wished to subscribe to the India Company were compelled first to procure themselves the necessary Mississippi stock. From his knowledge of human nature, he conceived that this obstacle would prove a whet, and he was justified by the immediate sequel. The price of the old stock took at last a vigorous upward movement, and soon the Rue Vivienne was blocked by carriages and the Hôtel de Nevers besieged by persons of quality, who came to beg of Mr Law the favour of allocation before the lists should close.
A story ran that the Regent, requiring a lady-in-waiting to accompany one of his daughters to the Court of Savoy, and mentioning that he did not know where to find a duchess for the purpose, was answered that he would find all the duchesses he could want in Mr Law's anteroom, and there might take his choice.
At the same time the Rue Quincampoix was resounding from dawn to dusk with the cries of less illustrious buyers and sellers.
Gathering momentum in its rise under this fierce demand, the price of the stock went soaring beyond par. The more it soared the more eager were the buyers, and soon the price stood at seven hundred and fifty livres, representing an appreciation of fifty-five per centum on the face value.
The effect was enormously to enhance the already solidly established credit of Mr Law. It was seen that he had made good all his assertions concerning the Mississippi Company, just as he had earlier triumphed over the mistrust and ridicule with which his Bank had been assailed.
William Law was robbed of breath as he contemplated the reckless ease with which his brother's genius extracted millions from nothing more than faith in what he might achieve with them. Again he would have had his brother rest content and apply himself exclusively to the development of the stupendous enterprise for which all these millions had been assembled.
But that supreme gamester aimed at the control of a far wider field, every stage in the conquest of which he was carefully plotting whilst waiting to be served by opportunity.
It was not long delayed. It came, as he counted that it would, when the spendthrift Regent stood again in need of money. Settlements were sought by his bastard, the Chevalier d'Orléans, there was an estate required by Madame de Parabère, and Jouflotte was clamouring for money to maintain her more than royal splendours. His amiable Highness, who had never aquired the art of refusing, turned to Monsieur Lass as the natural provider. Monsieur Lass was ready to oblige. His Highness might have fifty millions when he pleased. All that Mr Law would require in exchange would be an assignment to the Company of the administration of the mint, and the faculty of minting.
His Highness did not hesitate. He granted the assignment for a term of nine years, in ever-mounting esteem of this alchemist who conjured millions out of air. At least, that is what his brother now asked him was he prepared to do in order to pay for the concession. "For the Mississippi Company, let me tell you, John, cannot spare fifty millions for such a purpose."
As usual, Mr Law smiled upon his brother's qualms. "It was never in my reckoning that it should. The public will provide the money as readily as before."
And readily the infatuated public did provide it when for his purposes Mr Law made a fresh issue of shares in the India Company--this time to be styled the granddaughters--of the nominal value of five hundred livres but at a premium of no less than five hundred.
He was emboldened to this daring step by the rapid absorption of his previous issue, and this time in order to acquire the new shares he made it necessary to hold four mothers and one daughter, whilst the lists were open for only twenty days. The further attraction of a promise of a dividend of twelve per centum, caused the stock to be avidly subscribed.
The acquisition of the mint was no more than a subtle preliminary to the destruction of d'Argenson's anti-system and the absorption of its privileges. This, however, must wait until the public should have digested the heavy meal which Mr Law had just served up.
In the meantime he quietly added to his other undertakings the monopolies of salt and tobacco, and he obtained an edict forbidding remittances from one part of France to another to be made in specie, enforcing the use of banknotes for the purpose.
It was an edict that must have proved highly dangerous to any who enjoyed a credit less absolute than his had now become. Actually it was covered by the specious pretext of making for greater security, and so as to render this manifest Mr Law added to his other financial inventions that of the endorsement, by which a banknote could be made payable only to the person named on it.
It followed from this and similar measures that now, three years after the inception of his activities, virtually all the coin of the realm, amounting to some seven or eight hundred millions, had passed into the vaults of the Royal Bank, whilst its colossal paper issue carried the country's commerce.
At the turn of the year the Rue Quincampoix became a humming hive of activity, from dawn to dusk, and every little money-changer's office there functioned as a succursal of Mr Law's Temple of Mammon, dealing with the overflow from the Royal Bank of the ever-increasing numbers who were eager to buy or sell.
Trade, which apprehension and lack of confidence in the financial policy of the government had rendered stagnant, was flowing freely once more, employment was being found for the idle hands of starvelings, and the wages of the poorest labour had already doubled.
If the dawn of prosperity was as yet no more than breaking, it already sufficed, after all the misery endured, to cause the nation to hail Monsieur Lass as its saviour and to pour blessings upon his name.