Mississippi Company

“ Mississippi Scheme was started in France 1717 by John Law and the Government, ostensibly to develop the Mississippi basin, but really to ease the pressure on the exchequer; a company was formed and empowered to monopolise almost all the foreign trade ”

“ A few years later a gigantic enterprise was undertaken by the South Sea Company, a body of merchants originally organized as a company trading in the southern Atlantic and Pacific oceans. A Scotchman named Law had started a similar project in France, known as the "Mississippi Company," which proposed to pay off the national debt of France from the profits of its commerce with the West Indies and the country bordering on the Mississippi River. ”

“ He proceeded to read a private letter from a relation in the colony of Pennsylvania in which it was shewn that the Mississippi Company required close watching.
"Its leaders are egged on by the Jesuits, and will stop at no bloody measures to draw down trade from the Indians. Their projects must inevitably succeed if we are not watchful." ”

“ The state took advantage of the popular frenzy to issue increased quantities of paper money, which was readily accepted and invested in shares of Law's company. This went on till the value of the paper money became depreciated in value and the shares fell in price. Law, the originator of the bankrupt company, fled from France in 1720 ”

“ That corporate powers are to be strictly construed; and that corporations possess only such powers as are specifically granted them, or are necessary for the exercise of those expressly granted.
3. That neither by the charter of the Mississippi Railroad Company, nor by that of the Planters' Bank, nor by those of any of the other banks of Mississippi which were incorporated prior to the year 1837, has the power to transfer promissory notes been expressly given. ”

“ The twenty-five millions secured on the municipal revenues of the city of Paris, bearing so low an interest as two and a half per cent, were not very popular among the large holders of Mississippi stock. The conversion of the securities was, therefore, a work of considerable difficulty; for many preferred to retain the falling paper of Law's Company, in the hope that a favourable turn might take place. ”

“ We do not feel at liberty, by mere construction, to qualify the explicit declaration in the 1st section of plaintiff's charter as to the corporate existence thereby created. We therefore hold that under the statutes of Mississippi the only conditions precedent to the existence of the corporation was the approval by the governor of the state of its proposed charter, and the certification of that approval under the great seal of the state. ”

“ Apart from the ruling of the Mississippi court, we think it is entirely clear that the effect of organizing the consolidated corporation after the adoption of the Mississippi Constitution of 1890 was to bring the new corporation within the terms and limitations of that Constitution, which prohibited exemption of corporate property from taxation. ”

“ Mississippi, through its Supreme Court, had declared that there is no attempt to tax the privilege of doing an interstate business or to secure anything from the corporation by thi statute except compensation for the protection of the enumerated local activities of 'maintaining, keeping in repair and otherwise in manning the facilities.' 201 Miss. ”

“ Law’s plan was to set up a bank to manage the royal revenue and to issue notes backed by landed security. In selling shares in his Company of the Indies, which was to accomplish financial wonders, “large engravings were distributed in France, representing the arrival iv of the French at the Mississippi river, and savages with their squaws rushing to meet the new arrivals with evident respect and admiration.” ”

“ Mississippi Scheme, the, its history, i. 1-44; financial difficulties in France, expedients of the Regent Orleans, i. 6; official peculation and corruption, 7; John Law's propositions; his French cognomen, "Lass;" his bank established, 9; his notes at a premium; branch banks established; Mississippi trading company established; bank made a public institution; extensive issue of notes, 10; opposition of the Parliament, 11; the Regent uses coercion; Mississippi shares rise, 12; the Company of the Indies formed; magnificent promises; immense excitement and applications for shares ”

“ The suggestion is made that by the stipulation of facts in the trial court, Mississippi concedes the truth of an allegation of the challenged petition before the State Tax Commission reading as follows: 'To carry on interstate commerce is not a franchise or a privilege granted by the state; it is a right which every citizen of the United States is entitled to exercise under the constitution and laws of the United States ”

“ The amount of the tax is reasonable. [8] It is properly apportioned to the investment in Mississippi. [9]
However, a state tax upon a corporation doing only an interstate business may be invalid under our decisions because levied (1) upon the privilege of doing interstate business within the state, [10] or (2) upon some local event so much a part of interstate business as to be in effect a tax upon the interstate business itself. [11] Petitioner asserts that the Mississippi statute so offends. ”

“ An association of French merchants, known as the Western Company, sprang up in the early days of the eighteenth century and many forts and factories were built in the Mississippi region. Its promoters expected great results from a new skin until now turned to little account, that of bison, great herds of which animal had been discovered roaming the western plains. ”

“ Matthias W. Baldwin, George Vail, and George W. Hufty, copartners, brought this action on the 15th April, 1841, in the Circuit Court of Jefferson county, Mississippi, against James Payne, Abner E. Green, and Robert Y. Wood, the makers, and the Mississippi Railroad Company, the indorsers, of two certain promissory notes, each in the sum of $6,283.95, payable at the Merchants' Bank, New Orleans, the first, sixty days after December 4, 1839, and the other ninety days thereafter. ”

“ The population of Paris is said to have been increased by hundreds of thousands, many of whom were glad to take shelter in garrets, kitchens, and stables. But the Regent Orleans had meanwhile caused the paper circulation of the national bank to be increased as the Mississippi scheme stock rose in value, and paper currency to the face value of 2,700,000,000 livres flooded the country. The result was that many wary speculators, foreseeing a crisis, secretly converted their paper and shares into gold, which they transmitted to England or Belgium for security. ”

“ The twenty years after 1865 were a period of economic depression, the result of the havoc wrought by the war and of the difficulties encountered in readjusting production to the new conditions of labor, but later the rise of manufactures marked the beginning of a bright era. The racial problem assumed a momentous aspect in 1844, when a vast migration of colored men into the swamp lands of Mississippi seemed to threaten the rise of a negro State within the State of Mississippi. ”

“ The disasters which followed the commercial crisis of 1837 crushed almost every interest in Mississippi: especially was this true of the planting, the great interest of the State. On the healthy condition of him who tills the soil depends that of every other interest. The rapid rise in cotton, commencing in 1832, from the increased demand all over the world for cotton fabrics, caused a heavy immigration to the fertile cotton-lands of the West, and particularly to the extensive and newly acquired lands of Mississippi. The world was at peace, and great prosperity was universal ”

“ In a commercial point of view is the Mississippi equally as remarkable as in its physical presentations. It is the aorta through which, from the heart of the nation, flow the bountiful returns of industrious and productive labor, which thus find an outlet to all parts of the world, opening an avenue of trade for millions of energetic men and fertile acres. Thus not only is it the life-supporting, but as well the life-imparting artery of a great section of the republic.
But it is unnecessary to speak of the commercial importance of the river. This is patent to everybody. ”

“ That even the two banks of the Mississippi, the most beautiful tract of this country, otherwise so fertile, remain still uncultivated; and as there are wanted so many hands, it is not at all probable to presume, that they will or can occupy themselves to establish new manufactures, both because of the new charges, which they would put upon the augmentation and exportation of their productions. ”

“ He demonstrated its necessity, not only to the Atlantic states, but to the vast west. ‘If,’ said he, ‘there be a point more than any other in the United States demanding the aid of naval protection, that point is the mouth of the Mississippi. The population of the whole western country are dependent on this single outlet for their surplus productions. These productions can be transported in no other way. Close the mouth of the Mississippi, and their export trade is annihilated. ”

“ The following table gives the number of domestic animals on farms for the years indicated:
Manufactures. The manufacturing industry is probably less developed in Mississippi than in any other of the older States of the Union. On the other hand, the rate of the recent increase has been greater than that of most of the other States. Prior to 1837 some prominence had been attained in the manufacture of cotton, leather, liquor, and flour; but the financial panic of that year left these industries in a bad condition. There was a decided revival in the decade following 1850 ”

“ Finance.—The chief sources of revenue are taxes on realty, personalty and corporations, a poll-tax, and licences. The more important expenditures are for public schools, state departments, educational and charitable institutions and pensions for Confederate veterans. The early financial history of the state is not very creditable. The Bank of Mississippi, at Natchez, incorporated by the Territorial legislature in 1809, was rechartered by the state in 1818, and was guaranteed a monopoly of the banking business until 1840. ”

“ But it is none the less true that the corporation created by each state is, for all the purposes of local government, a domestic corporation, and that its railroad within the state is a matter of domestic concern. Every person, every corporation, every thing within the territorial limits of a state is, while there, subject to the constitutional authority of the state government. Clearly, under this rule, Mississippi may govern this corporation, as it does all domestic corporations, in respect to every act and everything within the state which is the lawful subject of state government. ”

“ The wealth of the Middle West, of the fifteen Western States that are appealing to the government for the profitable service of the Mississippi, is based largely on the foundation laid when ten thousand steamers plied the great river, in high water and low, before a railroad had entered its basin. Those steamboats, carrying the people, carrying their products, importing their necessities, insured to the nation the States of Missouri, lower Illinois, Indiana, Ohio, Kentucky, Tennessee, Mississippi, Iowa, Arkansas, and Louisiana. ”

“ And yet you ain't absolutely obliged to believe they can't. I reckon the safe way, where a man can afford it, is to copper the operation, and at the same time buy enough property in Vicksburg to square you up in case they win. Government is doing a deal for the Mississippi, now—spending loads of money on her. When there used to be four thousand steamboats and ten thousand acres of coal-barges, and rafts and trading scows, there wasn't a lantern from St. Paul to New Orleans, and the snags were thicker than bristles on a hog's back ”

“ Cotton and lumber are the chief exports. The coasting and river trade is large. The coasting trade is chiefly directed to Mobile and New Orleans, while the Mississippi river trade centres in the latter, and that of the Tombigbee in Mobile. The railroads terminating at these two ports and at Memphis are also large carriers of merchandise. There are three customs districts: Natchez, Pearl River (port of entry, Shieldsborough) , and Vicksburg. The direct foreign and the coasting trade are centred entirely in the district of Pearl River. ”

“ Whatever our future necessities may exact, or coming eventualities justify, posterity cannot fail to approve the forbearance of the United States in leaving so long and under so many provocations a weak and distant Government in possession of the gate which commands the great Valley of the Mississippi, destined to be, if it has not already become, the center of agricultural empire, and the source of our most valuable exports. ”

“ A more ludicrous and yet painful spectacle, than that which Holland presented in the years 1635 and 1636, or France in 1719 and 1720, can hardly be imagined. Taking them in the order of their importance, we shall commence our history with John Law and the famous Mississippi scheme of the years above mentioned.
THE MISSISSIPPI SCHEME Some in clandestine companies combine; Erect new stocks to trade beyond the line; With air and empty names beguile the town, And raise new credits first, then cry 'em down; Divide the empty nothing into shares, And set the crowd together by the ears. ”

“ There are men now living who may see all this vast expenditure utilized, as it is not now. The building of the inter-oceanic canal across the isthmus is certain to give new direction to the commerce of the world. It is fair to presume that the Mississippi 80 may again assert itself as one of the greatest arteries of commerce in the world, and that the products of the Minnesota and Dakota farms will find their way down the river to New Orleans, instead of across the continent to New York, Boston, Philadelphia, and Baltimore tidewater. ”