Page:History of the French in India.djvu/65

 LAW CREATES THE COMPANY OF THE WEST. extraordinary state of depression, national bankruptcy appeared inevitable. The Duke of Orleans, brother of the King, upon whom had devolved the office of Regent, whilst he almost despaired of the means whereby to extricate the country from the calamity by which it was threatened, was yet determined to resort to any ex- pedient rather than declare bankruptcy. Whilst yet meditating on the courses open to him, there suddenly appeared in Paris, within a month after the death of the King, a young Scotchman named Law, who, addressing himself to the Regent, declared his ability to rescue the country from the financial abyss into which it had fallen, and to restore to it credit and prosperity. To understand the revolution which overtook the affairs of the East India Company at this juncture, it will be necessary to give here a brief outline of the measures adopted by Law, under the sanc- tion of the Regent. In pursuance of his demands there was created, by letters patent dated May 2, 1716, a bank of deposit and discount, authorised to issue notes payable to the bearer in coin of the current value of the day. The capital of this bank, styled the General Bank, consisted of 6,000,000 francs, in 1,200 shares of 5,000 francs each, payable in four instalments, one-fourth in specie, and three-fourths in Government notes. One great object of the establish- ment of bank was thus to relieve the public credit, by accepting at par, for the payment of its shares, Government notes which were then scarcely saleable at 70 or 80 per cent, discount. At the same time that it did this it declared its own notes payable in cash to the bearer at the current value of silver. The sudden establishment of a bank on such principles, and with a comparatively low rate of discount, at a period when confidence had disappeared, had an electric effect. Instantly there was a strong demonstration in its