Mississippi Scheme was a wild financial project formulated in France in 1717. John Law, a Scottish economist, originated the scheme, which resulted in the organization of a business firm called the Mississippi Company. The French regent (temporary ruler), Philippe, Duke of Orleans, gave the company a monopoly (exclusive rights) to carry on far-reaching business operations in French-held Louisiana and Canada. At first, the scheme won widespread approval. Thousands of Frenchmen bought shares in Law’s company without really knowing how their money was to be used. But when the stockholders discovered that the company actually did little to develop business enterprises in America, they became frightened and began to sell their shares at greatly reduced prices. The result was a financial panic in 1720, known as the bursting of “The Mississippi Bubble.” A few investors who sold their shares early at high prices made huge profits. But others suffered heavy losses. The scheme failed, but it helped advertise Louisiana and brought thousands of settlers and slaves to the colony.
