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.Louis XIV, King of France, Lettres Patentes du Roy, Qui permettent au Sieur Crozat Secretaire du Roy, de faire feul le Commerce dans toutes les Terres possedées par le Roy, & bornées par le nouveau Mexique & autres, 1712. Printed document, 8 pp. Manuscript Division, Library of Congress. Manning F. Force Papers, Peter Force Collection, Series 8D, no. 49.
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.Seeking instant fortunes, peasants and nobles from all over France jammed the Rue Quincampoix, otherwise known as "The Street of Speculators, " before the offices of the Mississippi Company in Paris. Investors mortgaged estates in an effort to purchase 100-par shares of John Law's stocks, which at one point were valued at $3600 apiece. Only those few who had managed to turn their stock into solid value were saved from ruin.
Farm Security Administration - Office of War Information Photograph Collection. Prints and Photographs Division, Library of Congress. Reproduction number: LC-USE6-D-009367
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.