John Law
John Law (1671 – 1729) was a Scottish economist and financier who founded a bank issuing paper money in Paris in 1716, built up the Mississippi Company (later the Company of the Indies) and became France's Controller-General of Finances in 1720. His “System”, which tied company shares and paper money together to reduce the national debt, ended in the Mississippi Bubble, when share prices soared and collapsed in 1719–1720; he left France and died in Venice in 1729. For his ideas on paper money and credit he is also seen as a pioneer of modern finance.
| Lived | 1671 – 1729 |
|---|---|
| Active in | Edinburgh · London · Paris · Venice |
| Known for | The Mississippi Bubble; the Banque Royale and paper money in France |
| Game start | 1719 · age 48 · Banker in Paris (commoner) — Rue Quincampoix |
Life at a glance
- 1671 Born in Edinburgh, son of the goldsmith and banker William Law.
- 1683 His father dies in Paris after an operation for kidney stones.
- 1694 Kills Edward Wilson in a duel in London and is sentenced to death, but escapes from prison and flees to the Continent.
- 1705 Publishes Money and Trade Considered and proposes to the Scottish Parliament a paper money secured on land, but it is rejected.
- 1716 With the permission of the Regent, the Duke of Orléans, he founds the General Bank in Paris to issue paper money; in 1718 it becomes the Royal Bank.
- 1717 Founds the Company of the West (the Mississippi Company), holding the Louisiana trade, and the next year the company founds La Nouvelle-Orléans (modern New Orleans).
- 1719 Merges the other trading companies into the Company of the Indies, and amid the frenzy in the Rue Quincampoix shares issued at 500 livres soar to nearly 10,000.
- 1720 Becomes Controller-General in January, but after the decree of 21 May cutting the value of shares and notes the System collapses, and in December he leaves France.
- 1721 Returns to England and is pardoned for the old duel.
- 1729 Dies of pneumonia in Venice on 21 March.
Family
The family members who appear with this character when you start the game. Years follow the historical record; where none survives, a ? is shown.
| Relation | Name | Dates | Notes |
|---|---|---|---|
| Father | William Law | ? – 1683 | Goldsmith and banker of Edinburgh |
| Mother | Jean Campbell | Dates unknown | |
| Younger brother | William | Dates unknown | Helped in his brother's business |
| Partner | Catherine Knowles | ? – 1747 | Of the noble Knollys family; they never formally married |
| Son | John | c. 1704 – 1734 | |
| Daughter | Mary Catherine | c. 1710 – 1790 |
In the game
You begin in autumn 1719 in Paris as a banker of forty-eight. In the Rue Quincampoix 500-livre shares are already selling for 5,000, and people take off their hats when your carriage turns in. You are a commoner with no land or title, but you have the Royal Bank, the Company of the Indies and the trust of the Regent, the Duke of Orléans, and Catherine Knowles, your son John, your daughter Mary Catherine and your brother William are with you.
The turning point is “If Law's System had held”. In the first event, “The window on the Rue Quincampoix”, saying “They'll go higher” wins you renown but raises the odds of collapse, while whispering “Change half your paper into gold” raises the odds that it holds. It goes on to your decisions as Controller-General in 1720; if the System collapses, real history runs through 21 May, the Comte de Horn's sword, the mask in Brussels and the pardon at the King's Bench to the winter in Venice in 1729; if it holds, another branch runs to the end through New Orleans and the ledgers of peace.
Within a year, when one scene ends the next comes straight away, and the choices of the previous scene carry over. The ending is pneumonia caught in the winter of 1729 in Venice, but you may pull through.
- Scenario guide Rue Quincampoix
- Era guide Age of the Sun King and the Baroque
- Related turning points What if John Law's System had survived 1720?
Frequently asked questions
What was the Mississippi Bubble?
The speculative episode of 1719–1720 in France in which the shares of John Law's Mississippi Company (the Company of the Indies) rose nearly twentyfold in a few months and then collapsed. People bought shares with government bonds and paper money, and when in 1720 crowds rushed to change notes into gold, share prices and the value of paper money crashed together. With London's South Sea Bubble of the same year, it is counted among the great financial bubbles of the early modern age.
What was the idea behind John Law's “System”?
To revive trade by circulating plenty of state-backed paper money in place of gold and silver coin, and to reduce the crown's debt by converting government bonds into company shares. Gathering the bank, the trading company and the right to collect taxes into one hand, it collapsed when far too much paper was printed, but it is also credited as an early insight into fiat money and the role of a central bank.
What is John Law's connection with New Orleans?
His Mississippi Company, which held the monopoly of the Louisiana trade, founded La Nouvelle-Orléans near the mouth of the Mississippi in 1718. The city's name comes from the Regent, Philippe, Duke of Orléans, and the company promoted Louisiana heavily to attract settlers.
Sources
John Law, Money and Trade Considered (1705); memoirs of the Duc de Saint-Simon; general histories of finance and of the French Regency.