The first step taken by Law with a view to placing a check upon this continuous drain on the reserves of the Bank was the issue of a decree on 28th January, depreciating the coinage by raising the price of the silver marc to 54 livres. At the same time the interest of money was reduced from 4 to 2 per cent. Many people refused to bring their specie to the Bank for recoinage, and then commenced that system of domiciliary visits which under subsequent decrees worked with so much tyranny and for a time absolutely destroyed not only public but also domestic confidence.
The result of the decree was not so satisfactory as had been anticipated, and in quick succession other decrees were issued introducing alterations in the standard of the coinage. The purpose of this was to discredit specie as far as possible as a medium of exchange, and by giving the note the appearance of fixity in value to raise its credit for currency purposes. Payments in specie were only allowed to the extent of 300 livres in gold, and of 10 livres of silver, sums respectively equivalent to £12 10s. and 8s. 4d. in our money. Public offices could only receive payments in bank notes, except where the amounts of these or the balances were less than the lowest denomination of the note. And then the employment of gold and silver for other than coinage purposes was strictly prohibited without the royal license. These measures, however, were still unequal to restoring public confidence in the paper of the Bank, although in addition to those already specified, decrees were published fixing the value of paper at five per cent. and then at ten per cent. above the corresponding nominal value of specie. Trade was now beginning to experience the bad effects of a restricted currency, and representations were strongly made to Law and to the Regent to restore the currency to its previous position. This of course Law was unable to do without facing the consequences of seeing the bulk of the specie withdrawn altogether not only from circulation but from the country. A financial and industrial crisis would have at once been precipitated. To meet the situation, Law resolved upon bold and extreme measures. On the pretext that there were 1,200,000,000 livres in specie lying idle in the hands of financiers and successful speculators, an edict of Council was published on 27th February, which ordered “that no person, of whatever estate or condition, not even any religious or ecclesiastical community, should keep more than 500 livres in coined money or ingots, under pain of confiscation of the excess, and of a fine of 10,000 livres.” All payments exceeding 100 livres in amount were to be made without exception in paper, and the purchase of jewellery, plate and precious stones was declared illegal if made for purposes of investment. To provide against concealment of specie informers were promised a reward of half the sums disclosed, and all government officials were ordered to make search wherever ordered by the directors of the Bank. This decree was followed on 5th March by one which further debased the currency by raising the price of the silver marc to 85 livres, and on 11th March by a third, by which gold specie was to be withdrawn from the currency from and after 1st May following, and silver specie, except the smaller pieces which were necessary for odd change, from and after 1st August following.