Seaports of the World
United States: New Orleans, Louisiana
° Louisiana ° The Mississippi Bubble
From 1718 until 1810, New Orleans was essentially European. Decreed a city at its founding by Bienville in 1718, New Orleans was laid out by the French engineer, Adrien de Pauger, in a classic eighteenth-century symmetrical gridiron pattern, but the streets were little more than muddy ruts.
It did not really matter at the time as there were insufficient people to fill the grid until 1800.
From the beginning, New Orleans had a reputation as a very important place; and for most of the eighteenth century, image was more important that reality.
Although its geographical situation, strategically important site, and master plan for development guaranteed New Orleans a bright future, the realization of that promise was dependent upon the ambitions of the dominant political powers of the day.
Like so many American cities, promise and growth depended upon which political power controlled the interior of North America. In the eighteenth century, three European powers, France, Spain, and Britain were rivals for dominance.
Oddly, it was France's economic policy of regulating all mercantilism to the benefit of the state, that held back the growth of New Orleans. Odd, because America's growth at that time depended on sea trade. The French viewed Louisiana and the Mississippi Valley as a buffer against British expansion westward from their seaboard colonies and, so, saw no point in investing large sums in Louisiana, except for the brief period from 1716-1722, that saw the founding of New Orleans.
John Law, a Scotsman, gambler, and financial advisor to the Duc d'Orleans, developed a scheme to form the Mississippi Company to assume the French Crown's debt in return for a charter to operate Louisiana as a colony. Law's ingenious proposal called for the proceeds from the sale of shares in the Mississippi Company to the French public to be used to back the Crown's debt and currency. Shareholders would receive dividends on the profits the Mississippi Company would reap.
1719-1720: MISSISSIPPI BUBBLE
John Law and the French Mississippi Company
By the time of Louis XIV’s death in 1715, the treasury was in shambles, with the value of metallic currency fluctuating wildly. The following year, the French regent turned to a Scotsman named John Law for help. Law, a gambler who had been forced into exile in France as the result of a duel, suggested the Banque Royale take deposits and issue banknotes payable in the value of the metallic currency at the time the banknotes were issued.
Law’s strategy helped the French convert from metallic to paper currency, and resulted in a period of financial stability.
In August 1717, Law incorporated the Companie des Indes (commonly known as the Mississippi Company), to which the French regent gave a monopoly on trading rights with French colonies, including what was then known as “French Louisiana.” In August 1719, Law devised a scheme in which the Mississippi Company subsumed the entire French national debt, and launched a plan whereby portions of the debt would be exchanged for shares in the company. Based upon the expected riches from the trading monopoly, Law promised 120 percent profit for shareholders, and there were at least 300,000 applicants for the 50,000 shares offered.
As the demand for shares continued to rise, the Banque Royale — which was owned by the French government but effectively controlled by Law — continued to print paper banknotes, causing inflation to soar. The bubble burst in May 1720 when a run on the Banque Royale forced the government to acknowledge that the amount of metallic currency in the country was not quite equal to half the total amount of paper currency in circulation. On May 21, the government issued an edict that would gradually depreciate Mississippi Company shares, so that by the end of the year they would be valued at half their nominal worth. The public outcry was such that one week later, on May 27, the Regent’s Council issued another edict restoring the shares to their original value. On the same day, however, the Banque Royale stopped payment in specie. When the Banque Royale reopened in June, the bank runs continued. By November, shares in the Mississippi Company were worthless, the company was eventually divested of its remaining assets, and Law was forced to flee the country.
The Evening Post, London, England
From Thursday September 21 to Saturday September 23, 1721
From the Amsterdam Courant, September 30, Hanover September 23.
The famous John Law arrived here Incognito last Thursday with his Son, and was since Treated by divers Persons of Distinction; The Saturday following he had the Honour of being introduced to Prince Frederick, he is since gone for England if the common Report is true.
The Evening Post, London, England
From Saturday December 23 to Tuesday, December 26, 1721
The Creditors of Mr. John Law have met at the Notary Maignan’s, to consider the properest methods ot recover their Debts.
The Evening Post, London England
From Saturday November 10 to Tuesday November 13, 1722
Hague, November 5: The Committee of Council, nominated in inspect the Affairs of Mr. John Law, have given Judgment for the Sale of his Real Estate.
John Law who had been born into a family of bankers, believed that money was only a means of exchange that did not constitute wealth in itself. He received a pardon in 1719, moved to London, then to Venice where he died a poor man on March 21, 1729.
Law thereby launched one of the first modern public relations campaigns to convince thousands of Frenchmen of the fortunes to be made in a Louisiana rich in gold and fertile land. For two years, frenzied speculation shot the value of Mississippi Company stock upwards as Frenchmen of all persuasions rushed to invest their savings. But, by 1720, when no bonanza of dividends had been forthcoming, the company collapsed when thousands of Frenchmen rushed to unload their shares, and Law fled France just ahead of an irate mob.
Both Spain and France proved unable to hold New Orleans as part of an empire against the Americans flooding into the Mississippi Valley after 1800. Napoleon tried to reestablish the French Empire in Louisiana, taking control of New Orleans from Spain in 1802; but financial troubles and the difficulty of holding French conquests in Europe and the Caribbean led him to sell all of Louisiana, including New Orleans, to the United States. In December 1903, Thomas Jefferson had pulled off one of the great real estate buys in history.
Commercial families from many European countries established branches in the city, and John Law's efforts accounted for 2,000 German immigrants. Spain made serious attempts to encourage Spanish emigration, settling several thousand Canary Islanders in the 1780's twenty miles south of New Orleans and also to the west of New Iberia. Ironically, the biggest influx under Spanish rule was that of French-speakers: the Acadians who, expelled by the British from Canada, settled from the late 1760's through the late 1700's on all sides of the city, particularly to the west, near modern Lafayette. In the last years of Spanish rule, growing numbers of Americans settled and around New Orleans.John Law's efforts to raise funds accounted for 2,000 German immigrants. Spain made serious attempts to encourage Spanish emigration, settling several thousand Canary Islanders in the 1780's twenty miles south of New Orleans and also to the west of New Iberia. Ironically, the biggest influx under Spanish rule was that of French-speakers: the Acadians who, expelled by the British from Canada, settled from the late 1760's through the late 1700's on all sides of the city. In the last years of Spanish rule, growing numbers of Americans settled and around New Orleans.
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New Orleans and American Annexation
For New Orleans, American annexation brought population growth and economic development. The Louisiana Purchase removed the political barriers to the development of New Orleans' natural economic and situational advantages. From 1803 until 1861, New Orleans' population increased from 8,000 to nearly 170,000. The 1810 census revealed a population of 10,000 making New Orleans the United States' fifth largest city, after New York, Philadelphia, Boston, and Baltimore and the largest city west of the Appalachians. From 1810 until 1840, New Orleans grew at a faster rate than any other large American city.
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In 1803, New Orleans was basically 8,000 people directly or indirectly tied to moving goods from river vessels to dock to ship and vice versa. Its primary industry was the port, moving and storing goods. Ship chandling, repairing, and building were a distant second industry, but rapid economic growth after 1803 spawned new economic interests.
October 10, 1818, London Times, London, Middlesex, United Kingdom
A New Orleans paper of the 7th inst states, that a vessel had arrived at that port with the intelligence of the Patriot and Spanish squadrons having met near the coast of Terra Fuego; that Aury, not being able to escape from the Spanish frigate, of 38 guns, on accunt of her superior sailing, determined to carry her by boarding, which he effect, adn a few hours afterwards he died on board of his prize of wounds he had received in the contest. The frigate was sent direct from the Governor of Cuba, in pursuit of Aury's squadron. The frigate is now cruising off Carthagena, under Patriotic colours.
By the 1820's and 1830's, New Orleans was the commercial and financial intermediary for goods from all reaches of the Mississippi.
The first steamboat came downriver in 1812, providing a more efficient of transportation for cotton. In 1821, 287 steamboats arrived in New Orleans; by 1826, there were 700 steamboat arrivals. In 1845, 2,500 steamboats were recorded, and during the 1850's an average of 3,000 steamboats a year called at the city.
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After 1830, then, steamboats were in general use on the Mississippi, allowing two-way packet lines to operate, carrying both cargo and passengers on regular schedules. Flatbed boats, which were once the main river vessels, virtually disappeared after 1857.
In spite of the huge volume of steamboats that called at the city annually, New Orleans never became a center for building either ocean vessels or riverboats before the Civil War. As it grew larger, the city's location at the bottom end of the steamboat market made it a less attractive choice for steamboat construction than more centrally located cities, like St. Louis or Cincinnati.
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French Quarter Manual: An Architectural Guide
Malcolm Heard
Numerous black and white photos are presented along with explanatory text and captions discussing the history and describing the features of various styles, and of particular buildings. Arrangement of information is in sections on types of French Quarter houses; components of French Quarter buildings an illustrated "parts" list focusing on doors, windows, shutters, stairways, dormers, and carriageways, among others; and the many styles represented in the Quarter an illustrated "glossary" covering 16 styles, among them French colonial, Spanish colonial, federal, Greek revival, Gothic revival, Italianate, Egyptian revival, Craftsman, 20th-century restoration, and modernism. Spiral wire binding (in a hard cover). Annotation c. by Book News, Inc., Portland, Or.
Ocean-going ship building was slow to develop for similar reaons. Attempts were made in the 1850's to enlarge New Orleans' shipyards, but Northeastern financial sources were not interested in starting new shipyards to compete with the already well established Atlantic seaboard shipbuilding industry. By 1860, New Orleans did have fledgling machine shops, ironworks, several shipbuilding firms, located mainly on the westbank in Algiers. Algiers also supported a dry dock and a ship repair industry, so that in all, over 500 men were employed in ship repair and buildng by 1861.
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However, the Civil War slowed the development of the indsutry, delaying for decades the emergence of a major shipbuilding industry in New Orleans.
As a seaport and major point of entry for the country, New Orleans always had a transient population of seamen, immigrants, and tourists, and what might be called a "hospitality" industry—restaurants, theatres, operas, bars, gambling houses, and redlight establishments. This industry has always been much larger than what the resident population alone would support. The streets near the docks—in, above, and below the French Quarter—were lined by bars, flophouses, and clip joints.
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Visitors of all classes seemed to enjoy the luxuries, and perhaps the depravities, of the city that care forgot. Residents also enjoyed cultural and recreational opportunities far beyond what most cities of New Orleans' size could offer.
French artist Edgar Degas travelled to New Orleans during the fall of 1872 to spend a few months visiting the American branch of his family, including his brother Rene. The journey to New Orleans marked a key moment in Degas's career; he left the city with a portfolio of unforgettable images of New Orleans life. Degas's five-month sojourn in New Orleans resulted in a number of works, including the "Cotton Office in New Orleans (below). He returned to Paris in 1873.
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