On a forgotten quotation about Cantillon’s life

«The Economic Journal», settembre 1933, pp. 534-537

I think it will interest the readers of The economic journal to be acquainted with a mention of the name of Richard Cantillon which I have happened recently to come across and which, exclusive of course of the printed documents in the law – suits between the banker and his clients – is, as far as I know, the first mention made of him in a book relating to economics. At least, it is not recorded in the learned articles of Jevons, Niggs and Hayek.

The occasion of this mention was the famous Order (Arrêt) of January 26, 1721, in virtue of which all public securities current during the «System» were to be submitted within two months to an accurate examination by special commissioners for the purpose of cancelling or reducing or maintaining them. A visa, or stamp, on the security was declared essential to its validity. On September 14, 1721, a new order compelled all public notaries to send to the commissioners a sworn extract of all transactions made through their instrumentality between July 1, 1719, and December 31,1720. The commissioners having been thus enabled to draw up an account of the fortunes acquired during the «System», an extraordinary tax of 187,893,661 livres was levied on them by an order of September 15, 1722. A list of so-called «Mississipiens» or millionaire shareholders of the Mississippi and other mushroom companies was drawn up. Mississipiens, called also hommes nouveaux, were divided into four classes, the first of which included forty-six (not thirty eight, as is said by Levasseur) names; the highest assessment, that of a Dame Chaumont, being of 80 million livres, and the lowest of 15 million, besides nine persons whose recently acquired fortune was not disclosed, but who, notwithstanding, were taxed for no less than 1,302,000 livres. The yield of the tax ought to have been 117,650,211 livres for this first class, 58,642,576 for the second, 7,109,336 for the third, and 4,491,538 for the fourth; a total of 187,893,661 livres. What the net true yield was is not known; probably less than the estimate, as many speculators managed to fly to foreign countries with their acquired riches, or to buy with various corrupt means total or partial immunity. The story is told at length in two books, Histoire du système des finances sous la minorité de Luis XV pendant les années 1719 and 1720 (six tomes, La Haye, chez Pierre de Hondt, 1739), and Histoire générale et particulière du Visa fait en France pour la réduction et l’extinction de tous papiers royaux et des actions de la Compagnie des Indes, que le Système des Finances avoit enfantez (four tomes, La Haye, chez F. II. Scheurleer, 1743), par Dun Hautchamp. Mr. Levasseur writes that Du Hautchamp’s two books are «the most precious source known» on the System (E. Levasseur, Recherches historiques sur le système de Law, 1854, p. XI).

Du Hautchamp gives us indeed many interesting and lively details on the Law episode. Among others, he tells us that the Mississipiens hoped that the jolly bonfire, which on October 17, 1722, burned all the deeds, registers, and other papers of the great liquidation of the “System”, had destroyed also the list of taxpayers’ of the extraordinary levy of 187 million livres. But the list was preserved, and Du Hautchamp was able to publish it at the end of the second volume of the Histoire du Visa. I do not know if the original list is preserved in the public archives; but the bookseller who sold me a copy of the book assures me that the Histoire du Visa became very scarce on account of this very list. The hommes nouveaux whose names were put on the taxpayers’ list (there are 243 in the four classes, and fifty-nine more are added by Du Hautchamp as notorious “Mississipiens” who managed not to be included) did not like the publicity, and bought and destroyed the volumes. The inference is the more plausible as Du Hautchamp adds to names and figures of fortunes and taxes observations of its own, sometimes disagreeable.

Unfortunately, no positive observation is added to the name of Cantillon, contained in the first class of profiteers by the Mississippi mania. Here is the quotation, taken from page 170 of the second volume of the Histoire (1743).

Cantillon, who was mostly absent from Paris between 1720 and 1726, did not care, or was not able to search for protection among the aristocracy, and his noble clients were, moreover, too angry with him to allow his name to be dropped from the larger provisional list, as happened with several other big financiers (Du Hautchamp, Histoire du Visa, II, 11 and 196/197). The estimate of the fortune acquired by Cantillon was, as for other profiteers, largely a matter of guess, as it was based on the examination of deeds or transactions registered in public notaries’ offices or in the India Company’s books and other public sources, supplemented by a roused public opinion.

May I add to the present too long note on a too short quotation that some relevancy can, however, be attached perhaps to the «unknown» characterisation of the great economist? We are told by the Counsel for Cantillon in the legal suit brought against him by the brothers Carol that Cantillon left business in 1719; and from letters exchanged between Cantillon and his clients and partners it appears that he was a «bear» of India Stocks, and remitted large sums to England and Amsterdam (see Higgs’s Appendix to the Reprint of the Essay, p. 368). Cantillon was clearly one of those clever men whom Du Hautchamp, who was friendly to the System, calls «réalisateurs»; but he always kept himself in the background, never coming to the front, so as to be counted along with those small men suddenly risen to prodigious fortunes whose names had acquired great notoriety in Paris. Du Hautchamp, who likes to relate deeds and words of almost every noted «Mississipien», does not mention Cantillon except in the taxpayers’ list; and here he is bound to confess that he knows nothing of the man, notwithstanding the fact that his was one of the biggest fortunes discovered by the royal commissioners. Surely Cantillon did not invest the proceeds of his Paris speculations in houses and lands in France, because he would have been obliged to disgorge them. The house of which he appears possessed in Paris at his death (Higgs, loc. cit., p. 376) was probably his property already in August 1719 (ibid., p. 366), i.e. before the visa period. It would be interesting to know if Cantillon paid his 2,400,000 livres tax; but Du Hautchamp, who is loquacious about tax-defaults of other «Mississipiens», who took care, as Cantillon did too, not to return at once to France from foreign refuges, leaves us in the dark on this point. Researches in the archives of the Contrôle des Finances and of the Chambre des Comptes of Paris may perhaps supplement the hint which Du Hautchamp’s quotation gives us as to the origin of Cantillon’s fortune, and provide further information as to the levy made or attempted on it by the French taxing authorities.