the bank began issuing more notes than it could represent in coinage; this led to a currency devaluation, which was eventually followed by a bank run when the value of the new paper currency was halved. Mississippi Bubble Louis XIV's long reign and wars had nearly bankrupted the French monarchy. Rather than reduce spending, the Duke of Orléans, Regent for Louis XV, endorsed the monetary theories of Scottish financier John Law. In 1716, Law was given a charter for the Banque Royale under which the national debt was assigned to the bank in return for extraordinary privileges. The key to the Banque Royale agreement was that the national debt would be paid from revenues derived from opening the Mississippi Valley. The Bank was tied to other ventures of Law – the Company of the West and the Companies of the Indies. All were known as the Mississippi Company. The Mississippi Company had a monopoly on trade and mineral wealth. The Company boomed on paper. Law was given the title Duc d'Arkansas. Early French colony In 1699 the French formed the first permanent European settlement in Louisiana (New France), at Fort Maurepas. They were under the direction of Pierre Le Moyne d'Iberville. The first capital of New France from 1702 until 1711 was La Mobile, after which the capital was relocated to the site of present-day Mobile, Alabama. In 1718, there were only 700 Europeans in Louisiana. Bénard de la Harpe and his party left New Orleans in 1719 to explore the Red River. In 1721, he explored the Arkansas River. At the Yazoo settlements in Mississippi he was joined by Jean Benjamin who became the scientist for the expedition. The Mississippi Company arranged ships to bring in 800 more settlers, who landed in Louisiana in 1718, doubling the European population. Law encouraged some German-speaking people, including Alsatians and Swiss, to emigrate. They gave their names to the German Coast and the Lac des Allemands in Louisiana. Prisoners were set free in Paris from September 1719 onwards, and encouraged by Law to marry young women recruited in hospitals. In May 1720, after complaints from the Mississippi Company and the concessioners about this class of French immigrants, the French government prohibited such deportations. However, there was a third shipment of prisoners in 1721. Speculation Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the