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TeachMeFinance.com - explain Mississippi Company historic definition...
Mississippi Company -- In 1718 John Law, a financial adventurer,
the son of a goldsmith in Edinburgh, Scotland,
created in Paris, with the consent and concurrence of the
regent of France (Due D'Orleans), the Company of the West,
to which was granted the vast territory in the valley of the
Mississippi in North America which bore the name of Louisiana.
In this company also were vested the privileges and
possessions of all foreign trading companies, the control of the
French mint, the handling of the king's revenues and the
management of the Royal Bank. Subsequently the company
assumed the title of Company of the Indies on its acquisition
of the exclusive rights of the East India Company
in addition to its other prerogatives. The company was always
commonly known as the Mississippi Company; it derived
this name from the fact that through the province of
Louisiana which was granted to it flowed the great Mississippi
River.
A wild speculation took place in the stock of the company.
The shares, which were of the par or face value of 500 livres
(about $100) each, sold in September, 1719, as high as 10,000
livres (about $2,000) each. In the middle of the following
year the whole scheme collapsed and John Law, who held the
office of Comptroller General of the Finances of the Empire,
fled from France.
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