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Lettres Patentes en Forme D’Edit, Portant Etablissement d’une Compagnie de Commerce sous le nom de Compagnie d’Occident. Donné à Paris au mois d’Aoust 1717.

Paris: Chez la Veuve Saugrain & Pierre Prault, à l’entrée du Quay de Gêvres, du côté du Pont au Change, au Paradis, [1717] Quarto, 12 pages, a fine copy with wide untrimmed margins.

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This is the charter of John Law’s famous Mississippi Company, the Compagnie d’Occident (also known as the Compagnie du Mississippi), was established in 1717 by the Scottish financier John Law and changed its name to the Compagnie des Indes in May 1719, had a monopoly over trade in Louisiana from 1717 to 1731, as well as a monopoly over Canadian beaver exports from 1718 to 1760.

          As early as 1715, John Law had put to the Regent a plan for the economic and financial recovery of France, the “Système,” which was at first refused but which Law finally succeeded in putting into place progressively. After founding the Banque Générale Privée, which developed the use of paper money, in May 1716, he created the Compagnie d’Occident, which received its letters patent in August 1717 (the present item) and was granted a monopoly over trade in Louisiana. The area covered by the company included the whole of the Mississippi valley, the Illinois Country becoming part of Louisiana through a decree in September 1717. The company’s obligations were vast: it was to transport 6,000 colons and 3,000 black slaves over twenty-five years; it was also responsible for expenditure related to religion and defense.

           Over the following years, the Compagnie d’Occident took over all the other large French trading companies, as well as all large sources of state revenue. Farms were to have brought the company the financial support necessary for the exploitation of its immense colonial domain. Nevertheless, these purchases initially forced it to issue new shares, which the general public bought with banknotes. The Banque Générale had been turned into a Banque Royale in December 1718; in August 1719, an edict was issued according to which the state’s debt would be written off through the refunding of loans and offices in banknotes. Because the investment market was too rigid, the new holders of banknotes invested them by buying shares in the Compagnie des Indes. From May 1719, the share value began to increase, and this feverish period of investment, fueled by intense propaganda, continued to grow, while the bank continued to issue bank notes that did not correspond to a metal standard. The “Système” thus found itself at the mercy of a shift in public opinion that took place in the first months of 1720. The inability to refund all investors led to bankruptcy.

           After July 1720, the “Système” was liquidated: the bank was closed, the original financial and fiscal organization was reintroduced, and the Compagnie des Indes was henceforth only responsible for any trade activity under the tight control of the monarchy. While its actions in Louisiana between 1717 and 1720 had helped to give the colony stability, the company then imposed destructive cuts. Eventually, after the massacre of the Natchez in 1729, the company returned Louisiana to the Crown in 1731. It retained the monopoly over exports of Canadian beaver products until the fall of New France.

        Wroth and Annan 603, one of several issues of this decree. See Sabin 40716, citing the issue printed by the Imprimerie Royale, “Du Pratz characterizes it as ‘A very scarce pamphlet.’” Maggs, French Colonisation of America, 98, listed a variant, Wroth and Annan 601 at £ 10 10s.