Chapter 20 The Gamester by Rafael Sabatini
THE PUBLIC DEBT
Vast though they were beyond anything known in the realm of finance, the achievements hitherto of the Laird of Lauriston were dwarfed by the expansion he was to give them whilst the Count of Horn was languishing in gaol.
It may be that in the pursuit of ever more colossal undertakings he sought an anodyne for the heartache that he had brought away from his last interview with the Countess of Horn. It may even be that since she had avowed her feelings for him he was driven, despite the abyss between them which he could not hope to bridge, to rise to heights that should overpower imagination, and so render him an object of secret pride to her. Such aspirations have been known. Or, more simply, it may be that he was driven by a boundless ambition, which was not to be satisfied until he had brought the entire economy of France within his audacious grasp. More probably the source of his incredible activities is to be sought in a conjunction of these spurs, and it is as much beyond surmise as it is idle to determine the respective part of each.
Following upon the immuring of her husband in the Bastille, an imprisonment for which she had every reason to be thankful as for a deliverance, the Countess of Horn left Paris, the house in the Rue d'Argenteuil was closed, and, as Mr Law was to learn from Lady Stair, she had retired to a château acquired by her in Dordogne. He guessed that this withdrawal might be not merely out of respect for the proprieties imposed by her husband's increased disgrace, but out of dictates of prudence as concerned Mr Law himself. He bowed to it in a resignation blent with approval, and flung himself passionately into work.
As a result, whilst the Count of Horn sat gnawed by vindictiveness within four walls, whilst the Duke of Noailles and his following and the Parliament of Paris were rancorously watchful for opportunity to destroy this foreign adventurer, whilst Catherine Law alternated between exalted gaieties and ill-natured suspicions of a husband from whom she derived her ever-mounting eminence in the beau monde, the splendid star of the Laird of Lauriston, ever more effulgent, climbed steadily towards its zenith.
By now the monopoly of the trade with all French possessions in America, Asia and Africa was firmly within his grasp. He was adding to his fleet, by building and purchase, until soon now it should number some seventy ships. He was developing the commerce in Canadian pelts, which was beginning to assume importance, and he was master of the monopolies of salt and tobacco.
Leaving all this precariously balanced upon his system of credit at a time when the conditions of credit were only imperfectly understood, he gave his attention to obtaining additional powers, with the ultimate aim of assuming the office of Comptroller-General of the Finances which was held by d'Argenson.
As a preliminary step, now that he had buttressed his position by the control of the mint, and in order to obtain the farming of the taxes, he intoxicated the Regent by a staggering proposal to take over the national debt, the colossal burden of which, still amounting to fifteen hundred millions and costing the Treasury an annual interest of eighty millions, he now judged his credit strong enough to bear. Only from a man who had already displayed Mr Law's financial wizardry could the Regent have taken such a proposal seriously.
When His Highness had recovered from his stupefaction, he consented at least to hear the details of the scheme, and summoned d'Argenson to attend that exposition.
Closeted with those two in the Palais Royal on a day of August, Mr Law juggled with figures, countered arguments and smothered objections until both the Prince and the Comptroller-General were dizzy.
His proposal when summarized was that on condition that he be granted the farming of the taxes and paid for the necessary loan an interest at the rate of three per centum, equal to only fifty millions yearly and therefore representing an annual saving to the State of thirty millions, he would issue notes for the necessary capital amount, and with these the State creditors would be paid off in a given order.
He would issue, he announced, as a commencement one hundred thousand shares nominally of five hundred livres, and when the Regent, thrusting out a dubious lip, wondered if he could count upon their being absorbed, Mr Law revealed the lure by which he proposed to attract the public. It was a lure that amounted, indeed, to nothing less than a constraint.
The monopolistic net into which he had swept up by now all the great trading concerns, grouping them under the aegis of the India Company, had left the national debt as virtually the only other available medium of investment. Once this was taken over by the Company, the investing members of the public, the rentiers, would have no choice but to place their money with it if they were to continue to enjoy an annual return. It was of an overwhelming simplicity.
Convinced, at last and the conviction growing to enthusiasm, the Regent was brought to consent.
It was in vain that d'Argenson, no longer of a booming eloquence, but almost spluttering in indignation, still opposed the measure. Before him lay the prospect of being deprived of his tax farm, and, as Comptroller-General of the Finances, of being left with no finances to control.
"Your Highness cannot fail to perceive that this is merely a substitution of the India Company for the State; no more, in effect, than a dangerous conversion of the bonds of the public debt into shares in the company of Monsieur Lass. Nor can Your Highness neglect the interest of the shareholders in the tax farms, to whom we have been paying a dividend of twelve per centum. Is it just that their annuities should be arbitrarily reduced to three per centum?"
"Not arbitrarily," said the Regent. "You assume that they will reinvest in the shares of the Company. They are under no compulsion to do so."
"I think Monsieur Lass has made it clear that they will have no alternative. If this project is carried into effect, the India Company will become the only subject of investment in France, and it is precisely upon this that Monsieur Lass is counting--that the enormous capital of a milliard and a half cast out of investment in the State can find no other refuge but in the shares of his Company. Can Your Highness imagine that these annuitants will rest content with a rate of interest that must of necessity be enormously reduced?"
The Regent looked questioningly at Mr Law, who had been listening with a smile, and left him to answer the objection.
"That is an assumption for which there is no real warrant, Marquis. The interest of three per centum which is to be paid by the State to the Company for a loan will produce forty-eight millions annually. The tax farms yield, as you should know, a profit of sixteen millions; the balance necessary to produce the eighty millions which the bond-holders have been receiving and will receive again, can well be spared from the profits of the Company."
"That," said the Marquis, violently "is to build on something that does not yet exist."
"Your pardon, Marquis. It exists and must exist increasingly as trade develops."
"Must! I perceive no such assurance." D'Argenson's dark countenance was flushed with indignation. "What your all-embracing company may do is still in the realm of speculation. And I tell you frankly, sir, and you, monseigneur, if you will permit me, that to place this tremendous monopoly of trade in the hands of the State is an experiment fraught with appalling dangers. The stimulus of competition among merchants, which is the real mainspring of a nation's wealth, is abolished; those experienced traders will be replaced by inexperienced officials of Monsieur Lass' appointing. Disorganization must follow, and extravagance will become unbridled once the consequences of it are imposed upon the nation as will be all those losses which independent merchants must avoid or perish."
"I seem to hear again," said Mr Law, "the late Chancellor d'Aguesseau. It will be in your memory, Marquis, that when he urged those very arguments, yours was the only voice that opposed them."
"Not so," d'Argenson contradicted him. "My support was for your banking system only. None envisaged such a monstrous all-encompassing grasp as this upon the nation's economy. I declare it a madness to expose the country to the dangers inherent in so sudden a disturbance of the generally accepted financial practice, and I can foresee only disaster."
"Yet the arguments against my banking system were similar. Their fallacy has been exposed by results, just as the fallacy of these will be exposed. And meanwhile the State's obligation to find an annual interest of eighty millions is a burden lightened almost by half at a stroke."
This last was the consideration that made an end of d'Argenson's dialectics, but by no means of his fierce resentment. On the contrary, it was immeasurably increased by the blow to his pocket as well as to his pride, for the anti-system was now irrevocably smashed and the great profits he had derived from the tax farms were lost to him.
Remembering how he had supported Law's banking proposals at a time when all opinion had been against him, d'Argenson looked malevolently upon the Scot as a snake that he had nourished in his bosom. Defeated both as a financier and a lawyer, he went from the Palais Royal that day as Mr Law's bitterest enemy.
Later, at the Hôtel de Nevers, when Mr Law announced this triumph to his brother, far from arousing in him an exultation comparable with his own, he was met by dismay framed in arguments akin to those of d'Argenson and advanced with far greater frankness.
The steady, prudent, younger Law was aghast at a project of such perilous magnitude. Aware that his brother had been contemplating this scheme, which he regarded as a terrifying gamble, he had put his trust in the Regent's fundamental acuteness and had been confident that His Highness would reject it. Even now he could scarcely believe that audacity and plausibility should so far have overborne prudence and carried the day.
He sat glumly in his chair, listening to a paean of victory, that brought sweat to his brow. Instead of the fanfare of trumpets which Mr Law believed that he deserved, a groan was all he got from William.
"It frightens me," said he.
"It must be that you don't yet understand. In simple terms, I am replacing a credit that is old and moribund by one that is new and vigorous."
"How long will it retain its vigour when supporting this terrific load--a couple of milliards added to what we already carry? It's a load that will crush us."
Mr Law derided him. "Cassandra foretelling the doom of Troy."
"But I'll hope, not like Cassandra, unheeded by the doomed."
"Doomed! Pray consider, Will, that once we have the edict and I complete the conversion we shall have raised an establishment that will unite in itself the banking, the commerce and the administration of all the finances of France. It will constitute the most formidable financial power that was ever wielded."
"That is what daunts me: this monopoly of powers such as are exercised only with difficulty even when normally distributed. Are you equal to it?"
"With your help, Will."
"Oh, as to that, my help is yours for the bidding; every ounce of it. But you'll need a deal more. Lord! Whither will it all lead us in the end? I'd feel better if I saw aught in the trend of things in Louisiana to encourage us. The Mississippi's proving no Pactolus. Will it ever? Aye, smile, John. You account me fearful, I know. The fact is I haven't your gambler's nerves."
"Confess at least that I've not fumbled the dice so far."
"I do, John. I'll say that you've the devil's own skill in reckoning the chances. But--God's sake," he groaned, "could you not be content with what we have? Is there no end to your greed?"
"Greed!" Mr Law was provoked into laughter. "What greed do I display? I can plunge my hands into millions, yet what do I take for myself? What possessions have I acquired beyond that little property of Guermande down in Brie, to humour Catherine, so that between whiles she may play the châtelaine? The train that I keep in Paris may be princely, but it is no more than I could maintain on the fortune I brought with me into France. Greed, forsooth! I've told you before, Will, that with me the game is all. And," he added, with a sudden grimness, "it is all I have. Why grudge it me?"
"It's not grudging it you I am. It's fearing it may break you in the end."
Mr Law shrugged. "A soldier knows that he risks his life. That does not prevent him from being a soldier. Each of us must dree his weird as his nature bids him." Airily he quoted Montrose: "'He either fears his fate too much or his desserts are small, that dares not put it to the touch to gain or lose it all'."
"Ah, well. Ye ken what came of that."
"Maybe I'll build better than did he."
"If you think it canny to build on sand, which is what I doubt you're doing."
"The sand will turn to rock once the yield from overseas begins to flow."
"Ay, ay. But will it flow in time?"
"Why shouldn't it?"
Will sighed, and mopped his brow. His deliberate Scottish accents were gloomy. "I'm thinking ye'll need to work a miracle, like Moses when he struck water from his rock."
"With this difference, that whilst he merely brought forth water I shall bring forth gold. Meanwhile there's work to be done against the granting of the edict."
That edict was promulgated before the end of the month, and registered by Parliament in smothered anger. It cancelled the existing lease of the tax farms and conveyed them to the India Company. It ordered the reimbursement of capital to the shareholders in the farms as well as to all annuitants in the public debt. The holders of these securities were to present themselves at the Treasury, each to obtain a quittance for the amount of his holding, which he was immediately to take to the India Company to be discharged there either in gold or banknotes as he wished.
Considering the premium established by now upon the paper currency it was confidently reckoned that this would be preferred to specie, and the Regent had agreed that to meet the consequent requirements Law should print a sufficiency of notes. These were subsequently to be destroyed in a measure as they were paid in to the India Company for the purchase of the shares of the new issue.