[Np, but Holland]. 1720. Title printed in red and black. Folding engraved frontispiece, engraved list of plates within a decorative surround, seventy-two engraved plates, maps, and broadsides on 73 leaves (5 of the single- page plates cut the edge of the image and mounted [as issued], 45 double-page, 19 folding and including 10 which combine both engraving and letterpress text). Folio. Contemporary Dutch speckled calf, spine gilt with raised bands, red morocco label. Joints slightly split, extremities scuffed. One plate loosely inserted, two with sections of blank margins torn away, some other clean tears occasionally affecting the image area. Else very good. Item #WRCAM39674
A very rare economics work in which are reprinted a collection of the contemporary satirical texts and prints relating to the financial exploits of John Law and his infamous Mississippi scheme of 1717-20, events connected with the founding of a viable colony in Louisiana. John Law (1671-1729) was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself, but that national wealth depended on trade. He is said to be the father of finance, responsible for the adoption or use of paper money or bills in the world today. A gambler and an expert in statistics, he was the originator of economic theories, including two major ideas: "The Scarcity Theory of Value" and the "Real Bills Doctrine." The present work records the economic crisis precipitated by Law. The crisis had its origins in the decision of the French regent, Philippe d'Orléans, to appoint John Law the Controller General of Finances for France. "[In] May 1716 the Banque Générale Privée ('General Private Bank'), which developed the use of paper money, was set up by Law. It was a private bank, but three quarters of the capital consisted of government bills and government accepted notes. In August 1717 he bought the Mississippi Company, to help the French colony in Louisiana. In 1717 he also brokered the sale of Thomas Pitt's diamond to the regent, Philippe d'Orléans. In the same year Law floated the Mississippi Company as a joint stock trading company called the Compagnie d'Occident which was granted a trade monopoly of the West Indies and North America. The bank became the Banque Royale...in 1718, meaning the notes were guaranteed by the king. The Company absorbed the Compagnie des Indes Orientales, Compagnie de Chine, and other rival trading companies and became the Compagnie Perpetuelle des Indes on 23 May 1719 with a monopoly of commerce on all the seas. The system however encouraged speculation in shares in 'The Company of the Indies' (the shares becoming a sort of paper currency)...In 1720 the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was extremely successful until it collapsed and caused an economic crisis in France and across Europe. "Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the shares of the company in 1719. In February 1720 it was valued for a very high future cash flow at 10,000 livres. Shares rose from 500 livres in 1719 to as much as 15,000 livres in the first half of 1720, but by the summer of 1720, there was a sudden decline in confidence, leading to a 97 per cent decline in market capitalization by 1721. Predictably, the 'bubble' burst at the end of 1720, when opponents of the financier attempted en masse to convert their notes into specie. By the end of 1720 Philippe II dismissed Law, who then fled from France" - Cole. GOLDSMITHS 5829. KRESS 3217. MULLER 3535. SABIN 28932. A.H. Cole, THE GREAT MIRROR OF FOLLY...AN ECONOMIC-BIBLIOGRAPHICAL STUDY (Harvard, 1949).