"[Lot of 2] Law, als een tweede Don-Quichot, op Sanches Graauwtje zit ten spot [and] De wintgot, uytgebuldert hebbende, laat niet dan rampen na", Anon.
Subject: Satire - Stock Trading
Period: 1720 (circa)
Publication: Het Groote Tafereel der Dwaasheid…
Color: Hand Color
10.8 x 8 inches
27.4 x 20.3 cm
These satirical engravings are from the important account of one the most infamous financial meltdowns in history, known as the Mississippi Bubble incident. The first shows John Law, like Don Quixote sitting on Sancho's ass with a trunk labeled Bombario's coffers. They are followed by a crowd of foolish investors gathering up the shares that are flying out of the ass. The second depicts Jupiter and Mercury surrounded by clouds observing the destruction left behind by the collapse of various investment schemes. Dutch verse below each.
John Law, a Scottish financier, established the Banque Generale (central bank) in France. He was then granted control of Louisiana and founded the Compagnie de la Louisiane d'Occident, in 1717. Law developed an elaborate plan to exploit the fabulous resources of the region, which quickly gained popularity and people rushed to invest, not just in France, but throughout Europe. This resulted in the development of several other overseas companies, such as the English South Sea Company and a number of smaller companies in the Dutch Republic. The share price of the (Carte du Mexique et de la Floride) rose dramatically in a frenzy of speculation. In 1720 the bubble burst; speculators cashed in, caused a run on the shares, and the company went bankrupt. As a consequence of the failure, confidence in other similar companies failed, and thousands of individual investors across Europe were ruined.