Result list 30 April 2022

The results of our April 30 sale are now online. Unsold items can be obtained in our aftersale until May 22 (first come, first served). .

Lotnumber: 409
Action de 2500 livres. black. No 20590. Shares from the French Compagnie des Indes count among the rarest, most wanted and thus most valuable pieces in scripophily collecting. For instance, in our previous auction, we sold the earliest share (1664) of the Co. des Indes for 120.000 EUR. What we offer here is a share from 1770. At that time, a new issue of shares took place, with nominal value 2500 Livres, paying interest of 5%, secured on the tobacco monopoly, which had been taken from the Company by the state. Very few of such shares are known to us. The share is in excellent condition and wears 2 coupons. The company was originally established in 1684 by René-Robert Cavelier, Sieur de La Salle, as the Mississippi Company at the mouth of the Mississippi River. It was taken over by the Scottish businessman John Law in 1717 and renamed into Compagnie d'Occident (Compagnie du Mississippi). The previous year, this Scottish adventurer and professional gambler had already opened the Banque Générale in Paris under the patronage of the French Regent, Philip II of Orleans, which issued paper money initially backed by gold and silver, as such the first banknotes used as formal currency. With the control of the Mississippi Company, he had gained a 25-year monopoly by the French government on trade with the West Indies and North America. In 1718, the company founded the city of New Orleans. The next year, the company acquired the (first) Compagnie des IndesOrientales (founded in 1664 by Louis XIV minister J.B. Colbert), the Compagnie de Chine, and other French trading companies. Law consolidated them all into this (second) Compagnie des Indes (1720). John Law exaggerated the wealth of Louisiana, by using a marketing trick: he announced that he would pay in 6 months' time 500 livres per share, twice the prevailing stock price. The public immediately realized that if the promoter of the company was willing to pay such a high price, it must be because of some valuable inside information of favorable developments. As a consequence, the news pushed up the stock price to a level that its shares could be converted into the entire French government debt of 1,6 billion livres. The whole government debt became property of the company, the company itself became property of the former creditors of the French government debt and the main revenues of the company consisted of the interest from the government debt. From then on, each time the government needed new money, the company announced new fictitious projects which resulted in the issue of new shares at a higher price, which could be bought with cheap credit. The share eventually climbed to a peak of 20.000 livres at the end of 1719 or 4000% more than its initial price at the beginning of the year. However, the higher money supply resulted into an extremely high inflation rate of 300%, investors lost their confidence, wanted to cash out and stock prices started to tumble to 500 livres in 1721. John Law tried to save the company by means of a merger with the Banque Générale and restrictions on the conversion of paper money into gold, but this could not prevent its collapse later that year. Law had to fled out of France. His company however was soon reorganized and open for business again in 1722. The operational revenues were increased by means of new privileges: it received the monopoly of sale of tobacco and coffee, and the right to organise national lotteries. From 1726 to 1746 the company flourished from its overseas trade and domestic business. Although it lost its trading rights for the western hemisphere, it kept trading with the east and could prosper from that business. Its main goods of trade during the period were porcelain, wallpapers, lacquer and tea from China, cotton and silk cloth from China and India, coffee from Mocha (Yemen), pepper from Mahé (South India), gold, ivory and slaves from West Africa. From 1746 onwards, the spendthrift policies of the French government began to hurt the company and the seven years' war brought severe losses. (Note: in the mid-1760s, George Washington was among the company shareholders!) In 1770 all its properties, assets and rights were transferred to the state, which accepted in turn to pay all the company's debt and annuity obligations. For this privilege the shareholder was required to pay 400 livres per share. Although the nominal value of each share then amounted to 2500 livres and the promised dividends amounted to 125 livres, the market price of a share was only about 700 livres, reflecting a lack of investors' confidence. In 1785, a third and last Co. des Indes was formed by King Louis XVI in 1785, with a capital of 40.000 issued shares of 1000 livres. It had a 7-year monopoly of trade with all points east ofthe Cape of Good Hope (except today's Mauritius and Réunion). It owned 11 ships, and made regular sailings to ports in India and China from its base at Lorient. It prospered until the National Assembly took away its privileges in 1790. The company continued to trade, at a much-reduced level, until it was dissolved by the Convention in 1794. Its liquidation was not complete until 1826. In conclusion, the Compagnie des Indes was for many reasons one of the most important companies in world history. Its shares (1665, 1720, 1770, 1785-87) are of the highest rarity. Of this 1770 issue, we know of only 3 surviving examples. It has been 10 years since such a share last surfaced.
Themes: BEFORE 1800
Date: 22 April 1770
Quality: EF
Startprice: € 15000