Memoir of the life of John Law of Lauriston

APPENDIX. 231
System. The public perceived at last that paper
property was precarious and illusory ; the next day
every one was anxious to get rid of it at any price.*
The Regent, seeing the lamentable consequences
of the decree, revoked it six days afterwards ; he
* As bank notes did not appear to sink in value when
compared with specie, the greater number of contempora-
ry authors imagine that their value was not affected up to
the 20th of May, and that it would have continued to have
been maintained but for the decree of the 21st, which was a
death-blow to their credit. This opinion, which is maintain-
ed by Stewart, as well as by the French authors, is evidently
false ; it Is impossible that the circulation of a country, whose
money before this period was not reckoned to exceed 1,200
millions, could absorb 2,235 millions of paper money, conse-
quently this last must sink in value. The writers on the
System, as well as the evidence of experience, prove the truth
of this position ; all agree in saying that the prodigious
quantity of paper money had excessively advanced the price
of provisions, and that the nominal value of the notes was
only reduced with the view of diminishing these prices ; but
the high price of all sorts of merchandise is the result of
the low value of the money with which they are purchased ;
if the notes of the system bore a premium over specie, it was
only because the Government received them at this rate in
payment of taxes, but at bottom this preference was factitious
and chimerical. How was it possible to estimate the value
of notes by that of specie in a country where specie had
been prohibited, and where the bank only paid small notes
of ten livres ?