Louis XIV lived to see his kingdom torn and distracted, his conquests lost, a large portion of his colonies in the possession of his enemies, and a smouldering hatred for each other arise among his subjects. Monopolies were multiplied in order to meet the needs of the nobles, of whom there were one hundred and forty thousand in France at that time. Together with the clergy, they owned the best mines and farm lands; all of the large and handsome buildings, the palaces and castles and even the best of the movable property. They escaped taxation, disdained labor and eagerly seized and consumed the hard-earned products of the poor laborers. Under the wanton luxury of his successor, Louis XV, silk weaving revived somewhat, and agriculture improved, but the country was practically bankrupt. Farmers were nearly everywhere poor renters of their small holdings, weighed down by tithes and heavy taxes, while the lords lived in their castles or in the principal towns or Paris, squandering the income wrung from their miserable tenants.

About this time there appeared in France one John Law, a Scotchman, who offered a solution of all the country's difficulties. He proposed to liquidate the vast indebtedness with which the ambitious schemes of Louis XIV had burdened France. This was so enormous that the whole annual revenue scarcely sufficed to pay the interest. He founded a Land Bank (1716) and organized the Mississippi Company. In consideration of his liquidating the public debt, his bank was made a state institution and authorized to issue a paper currency. He then issued inconvertible notes to the amount of the value of the land of the kingdom based upon the land itself as a supposed security. France was flooded with this inflated currency. Prices of all commodities rose, the rate of interest advanced, and stock in the bank was in great demand. Law was able to declare a bank dividend of forty per cent payable in paper money. Seeing that Law was such a remarkable financier and his bank so prosperous, the people were eager to participate in his Mississippi scheme. The desire to purchase shares in this scheme now amounted to a frenzy. Enormous profits were expected to be realized by the Mississippi Company from its supposed gold mines yet undiscovered, and from planting and commerce. The new company grew and expanded, absorbed the East India Company, increased its capital stock to six hundred and twenty-four thousand shares of five hundred and fifty francs each, and offered to lend the government a billion six hundred million francs at three per cent. Paris was wild with excitement. The shares in the Mississippi Company rose in the market to forty times their par value. Everybody seemed to grow rich. Law worked his two schemes, the bank and the Mississippi Company, side by side, and one helped the other. Through the bank he inflated the currency, making it possible to float the Mississippi scheme, and as fast as the stock of the Company was sold, the money flowed back into the bank, enabling it to be used in making bank dividends. Government bonds, which a short time before had been selling at twenty cents on the dollar, so low was the credit of the kingdom, were redeemed by Law at par, and investors became eager to buy government securities. Land was bought and sold at fabulous prices. New issues of paper currency continued to be made until the total reached almost to the enormous sum of two thousand million francs. All the while the specie was quietly going out of France, and there was nothing but credit left as a

John Law Land Bank and Mississippi Company basis for the money circulation. Finally, after four years of financial rioting in the wildest schemes and theories, credit became strained to the breaking point. The bubble burst and a panic ensued. Law became a fugitive. Ruin and despair spread through the kingdom, and an insurrection of the common people was imminent, but with great difficulty was prevented. The terrible day of reckoning had not yet come. It is a strange coincidence that while the Mississippi scheme was in operation in France a similar gambling mania, in the form of the South Sea Bubble, held possession of England, and another of the same kind infatuated Holland. They all three collapsed about the same time and with the same effects.*

After the failure of John Law's scheme, the commerce of the country was depressed and manufactures did not improve. In 1756 began the Seven-years war (1756-1763) with England, by which France lost all of her American colonies except Louisiana. The commercial supremacy of Europe, and of the world, then passed over to England. The treasury of France was empty, the country in debt, credit gone, and the people borne down with financial burdens. The new king (Louis XVI) was weak and injudicious, and the queen frivolous and extravagant. The war for American independence had been brought to a successful issue, and had aroused the spirit of popular liberty in France. Under these conditions the common people in 1789 rose in revenge for the wrongs they had suffered for centuries, and inaugurated the great French Revolution.

Peaceful commerce could not exist during a reign of anarchy. Terror made property insecure, and the wealthy fled from the country, carrying their portable wealth with them. So scarce had coin become in the first year of the Revolution, that large issues of paper were resorted to, and it was made a capital offense to refuse to receive this at par; but foreigners were not bound by the statute, and took from the country all of the gold and silver that was not hoarded. The paper currency sank lower and lower in purchasing power, until a pound of butter could not be had for less than 700 or 800 francs, and a pair of boots cost as high as 10,000 francs. Internal trade and manufactures were prostrated and foreign commerce annihilated.

At this juncture Napoleon appeared upon the scene of action, and in 1806 issued what has been called his Berlin Decree, by which he hoped to destroy British commerce by sealing the ports of the entire continent against English vessels. England retaliated by capturing French ships and colonies, and thus for several years the ports of Europe dared not admit English vessels for fear of the wrath of Napoleon nor permit their own vessels to leave their moorings for fear of British cruisers. The commerce of Europe as well as England was thus seriously injured, while the decree caused manufactures and home industries in France to revive, in an effort to meet the demand for goods which could not be imported. Napoleon laid down the principle that France should be self-sustaining in the production of all that was necessary for her maintenance. He increased the duties on imported goods, rigorously protected trade marks, and re-estab.lished several of the old trade corporations. To supply the loss of colonial produce, no longer obtainable from the English colonies, tobacco and corn were cultivated, and for the purpose of making sugar to take the place of cane-sugar, no longer obtainable from San Domingo on account of the negro revolution, beet-sugar was invented and the beet extensively cultivated. Cotton, linen and woolen goods were extensively produced and manufacturers were busy, but not having to compete with foreign imports clothing was neither good, cheap, nor abundant. Roasted beans were substituted for coffee, soda for potash, and bleaching, dyeing, tanning, distilling and other arts depending upon chemistry were greatly promoted by means of ingenious substitutes.