The New Student's Reference Work/Law, John
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|See also John Law (economist) on Wikipedia, and the disclaimer.|
Law, John, originator of the “Mississippi scheme,” financier and projector, was born at Edinburgh, Scotland, on April 21, 1671. At 20 he went to London, but was compelled to leave on account of a duel in which he killed his opponent. He then proceeded to Amsterdam, and there began studying the system of bank credits, and in 1700 he returned to Edinburgh to advocate the use of paper currency before the unfavorable Scottish Parliament. Law then traveled over the European continent, gambling and speculating, until in 1716 he founded a private bank in Paris with his brother William. In 1718 the duke of Orleans, regent of France, adopted Law's system of paper currency and issued enormous amounts which received great credit, while the national bonds remained below par. In 1719 Law originated the Mississippi scheme. This was a plan for colonizing and exploiting the region of the Mississippi, a sort of wild-cat project, the chief motive of which was to raise money to meet exigencies of the time in France. In the speculative mania that ensued stocks and shares soared to fabulous heights, and for a time the financial world of France lost all reason and parted from sober sense. Next year Law was made councilor of state and comptroller-general of finance; but when his system met with popular disfavor and his bubble scheme was pricked, he fled to Brussels, thence to England and finally to Venice, and there remained, poor and forgotten, until his death on March 21, 1729. See Perkins' France under the Regency and Mackay's Extraordinary Popular Delusions.