Difficult Early Years of the Colony
From its inception Louisiana faced an inauspicious existence. Its fate was bound to the French economy during the last years of the reign of Louis XIV. Already a vast empire, the French government and its highly centralized bureaucracy disfavored policies that would have nurtured the economic independence of its colonies. Further, the French treasury, depleted by wars in Europe, was unable to finance adequately the Department of the Marine, which oversaw colonial operations.
Although all French colonies were subject to the same desperate circumstances, the Mississippi colony, as the newest in the French imperial system, fared the worst. This 1701 mapby Nicholas de Fer depicts the colony in its infant stages, a period when Louisiana's settlers were neglected by the government and left entirely to their own resources. Lured by promises of mines and gold, most of the early settlers made little effort to hunt or plant crops. Few farms developed along the banks of the Mississippi or along the sandy coast. Since the earliest settlers were never furnished with adequate food supplies, they frequently resorted to scavenging for crabs, crayfish, and seeds of wild grasses. Whenever possible they traded blankets and utensils for corn and game with the surrounding Native American tribes. Disease, particularly yellow fever, diminished the community. Floods, storms, humidity, mosquitoes, and poisonous snakes added to the misery. Although few settlers escaped the hardships, by far the sturdiest members were those who had accompanied Iberville from Canada.
Having maintained direct control over its Mississippi colony for 13 unprofitable years, the French court held less than sanguine prospects for its future development. In an effort to instill vitality into Louisiana, King Louis XIV granted a proprietary charter on September 14, 1712, to the merchant and nobleman, Antoine Crozat. The royal charter afforded Crozat exclusive control over all trading and commercial privileges within the colony for a 15-year period. Crozat gained a monopoly over all foreign and domestic trade, the right to appoint all local officials, permission to work all mines, title to all unoccupied lands, control over agricultural production and manufacture, and sole authority over the African slave trade. In return he was obligated to send two ships of supplies and settlers annually and to govern the colony in accordance with French laws and customs.
The colony could neither be governed adequately nor profited from. Estimates placed Crozat's losses in Louisiana at just under 1 million French livres (about $1 billion). Unable to sustain the colony any longer, in August 1717 he petitioned the king and his ministers for release from his charter.
Crozat's failure to turn Louisiana to his financial advantage once more made the colony a ward of the crown. In September 1717 the Regent of France, Philippe, duke of Orléans, fearing that the province would again drain his country's already bankrupt treasury, placed its fortunes into the hands of John Law, a Scottish investment banker.
Law cultivated a childhood talent for equations and games of chance into a career as a financier. His Company of the West, more commonly known as the Mississippi Company, was granted a 25-year proprietorship with a commercial monopoly over the colony, along lines similar to those furnished Crozat. A year earlier Law had made his reputation in Paris by founding a private bank with powers to issue paper money. So successful was his venture that the regent had it chartered as the Royal Bank of France.
Seeing an opportunity to simultaneously pay off the public debt and develop Louisiana by using the bank's deposits, Law also offered his company's shares to the public. The Company of the West later merged with the French East India Company and several trading concessions to form the Company of the East, which became responsible for managing the collection of revenues and taxes. The company's stock soared in value, the bank continued to print money, shareholders indulged in their newfound paper wealth, and Law became the toast of France. Law himself fueled the frenzy by having ingots of gold, advertised as being from the mines of Louisiana, displayed in the shop windows of Paris.
Promotional literature, much of it including maps of Louisiana, added to Law's inflated reputation as a financier par excellence and roused interest in his plans for developing and settling New France. A singular example of such propaganda was the map produced in 1718 by the noted French cartographer Guillaume Delisle. A milestone in North American cartography, incorporating the latest topographical information about the region, the map was designed chiefly for mercantile reasons.
The wild speculative orgy that had inflated the company's stock to ethereal levels burst in 1720, when Law's organization was forced into bankruptcy by reports of mismanagement and dire hardships in the colony. The failure of the company took down its chief creditor, the Bank of France, and financial ruin descended upon thousands of investors on the continent, including John Law, who was run out of Paris by a mob. After several reorganizations and years of financial reverses incurred in managing affairs in Louisiana, the directors of the Company of the East returned the colony to Louis XIV in 1731.
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