In 1719 the company absorbed several other organizations for the development of the Indies, China, and Africa, and Law thus controlled French colonial trade. The consolidated company, renamed the Compagnie des Indes (but commonly known as the Mississippi Company), was given, among other privileges, the right of farming the taxes. It then assumed the state debt and finally was officially amalgamated (1720) with the royal bank. Public confidence was such that a wild orgy of speculation in its shares had set in. The speculation received a strong impetus from Law's advertising, which described Louisiana as a land full of mountains of gold and silver. One story told of a fabulous emerald rock on the Arkansas River, and an expedition promptly set out to find it.
Overexpansion of the company's activities, the almost complete lack of any real assets in the colonial areas, and the haste with which Law proceeded soon brought an end to his scheme. A few speculators sold their shares in time to make huge profits, but most were ruined when the
Mississippi Bubble burst in Oct., 1720. In the governmental crisis that followed, Law's financial system was abolished, and he fled the country (Dec., 1720). Although a failure in its financial aspects, the Mississippi Scheme was responsible for the largest influx of settlers into Louisiana up to that time.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: U.S. History