John Law and the Mississippi Bubble V

Lead: The Bursting of John Law's Mississippi Bubble created great hardship in France and slowed the development of modern banking for a century.

Intro.: A Moment in Time with Dan Roberts.

Content: After merging most of the national economic system into a huge holding company backed by the French government, John Law began to sell shares in the company. People wanted the shares because the company controlled development of the mysterious territory of Louisiana in America. The wild increase in the price of the shares in his Indies Company has since come to be known as the Mississippi Bubble. To increase the price of the shares his agents spread the word that Louisiana was a land rich in gold and silver. Actually it was little more than a worthless swamp. Law also pushed the price up with speculation. With each share selling for 300 livres or about $500 the bank offered to buy it back in six months for 500 livres. Rumors began to spread that Law knew something about Louisiana, or else he wouldn't offer to buy back the shares at a higher price. The rate went to a 1000 livres and the bubble got bigger.

 

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John Law and the Mississippi Bubble IV

Lead: John Law organized something like the modern national financial system in 1717 in France, the scheme came to be known as the Mississippi Bubble.

Intro.: A Moment in Time with Dan Roberts.

Content: Law convinced French rulers that he could revive their national economy which was mired in debt because of the free-spending previous king, Louis XIV. They chartered his company La Banque Générale to issue bank notes, paper money, in place of gold and silver. At first these notes were issued in limited amounts and worked like goldsmith's receipts, they could be exchanged for the face value in gold. Frenchmen trusted them, saw their economy begin to break out of the doldrums and their government beginning to pay off its debts. Law seemed to have created something of an economic miracle.

 

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John Law and the Mississippi Bubble III

Lead: Convinced he knew how to create wealth, the financier, John Law settled in Paris in 1714 and began his campaign to start a national bank.

Intro.: A Moment in Time with Dan Roberts.

Content: After years of observing the trading and banking system of early 18th Century Europe, John Law asked the Scottish Parliament if he could set up a national bank so as to issue paper money and, in his view, create wealth. They turned him down but he had better luck with the French. After seventy years on the throne, old King Louis XIV was about to die. He had made France the center of European cultural life but his wars and his extravagant lifestyle symbolized by the magnificent palace at Versailles had left France under a crushing load of debt.

 

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John Law and the Mississippi Bubble II

Lead: The face of financial panic is an ugly one. Among the earliest in the modern era was caused by the bursting of John Law's Mississippi Bubble.

Intro.: A Moment in Time with Dan Roberts.

Content: The study economics is a fairly recent thing. Until the 1800s very few thinkers began to understand the way the world worked. Before the Industrial Revolution, before Adam Smith wrote Wealth of Nations, before people knew the meaning of business cycles, inflation, economic depressions, or even before there was widespread use of paper money, a Scotsman, John Law created in early 18th century France an economic system very similar to a modern industrial economy and then watched it self-destruct. He was at least a century ahead of his time. For three years he was the most powerful man in France, some said in all of continental Europe, but he died penniless.

 

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John Law and the Mississippi Bubble I

Lead: Nothing is valuable until someone thinks it is, a lesson John Law, the Scottish financier, found out to his ruin.

Intro.: A Moment in Time with Dan Roberts.

Content: At the beginning of the human era economics was very simple. Men and women hunted animals or gathered wild plants simply to stay alive. When they organized themselves into clan or tribal groups civilization as we know it began to develop. As tribes began to congregate and cultivate the land, trade started to develop within and between villages, therefore man has seen the need for a medium of exchange. At first it was not very complex. It might be sharpened flints or trinkets or beaver pelts or animals or fertile farmland. Something considered valuable that could be traded for something else.

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Elizabeth Zane and the Siege of Fort Henry

Lead: In one of the last skirmishes of the American Revolution Betty Zane performed an act of exceptional heroism.

Intro.: A Moment in Time with Dan Roberts.

Content: The City of Wheeling was established at the juncture of Wheeling Creek and the Ohio River in the panhandle of West Virginia. The name is taken from a Delaware Indian term meaning skull or head which refers to the beheading of a party of early settlers. The story of Elizabeth Zane comes out of that turbulent era.

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Whitefield and Franklin II

Lead: In the middle of the Great Awakening a religious revival in 18th Century Colonial America, two men formed a strange alliance. George Whitefield needed publicity for his revival meetings, Benjamin Franklin was out for profits.

Intro.: A Moment in Time with Dan Roberts.

Content: The two men at the opposite ends of the religious spectrum. Franklin was a deist, whose skepticism about matters religious was widely known. For the publisher of the Pennsylvania Gazzette and Poor Richard's Almanac, at best, religion was ethics and promoted hard work and civic morality. Whitefield was an Anglican priest caught up in the religious ferment of the 1700s, an itinerant evangelist whose preaching missions in England and America drew vast crowds to hear his message of the "new birth" in Jesus Christ and the need to go beyond mere agreement with doctrine.

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Whitefield and Franklin I

Lead: In the 1740s George Whitefield and Benjamin Franklin combined business and religion in a most unlikely alliance.

Intro.: A Moment in Time with Dan Roberts.

Content: The Great Awakening was a powerful religious revival in British North America between 1720 and 1750. Part of a general stirring of religious interest among Protestants and Roman Catholics in Continental Europe and under John Wesley, in England at about the same time. In America the movement was a reaction to dry, formalistic religion in the main denominations and at one point or another many Baptists, Presbyterians, Congregationalists along with some Anglicans were swept along in the tide of revival.

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