On December 10, 1720, John Law, Scottish financier and former comptroller-general of France, was forced to leave Paris. Law was the son of Edinburgh goldsmith and banker William Law, who through a successful career in finance, was able to purchase Lauriston Castle, and settle the family there.
Son John was perhaps not as rigorous in his methods as William; more of an adventurer. He arrived in Paris after a long period of wandering the continent to avoid the law, after killing Beau Wilson (Law was later pardoned for this killing) in a duel.
In an appropriate corollary to today's economic bubbles, Law is responsible for one of the largest booms and busts in history. In the Mississippi scheme, Law purchased most of the Companie du Mississippi (1717), and was granted a 25 year monopoly on trade with North America and the West Indies. This company ultimately became the Company of the Indies, which, among other things, is responsible for building the city of New Orleans, in Louisiana.
Through successful marketing, shares in the Company of the Indies began to grow rapidly in value. Everyone in France, it seemed, wanted to buy in, and Law obliged by issuing more and more shares. Law himself could not appear in public without being accosted for a piece of the action. At the height of the bubble, in 1720, shares rose to 15,000 Livres, from 500 Livres the year before. This bubble ended the way all bubbles do; popped. By the end of 1720, shares had declined significantly, bankrupting many, and causing economic distress throughout the country.
Law's scheme, as Scott refers to it appears in his "The Bride of Lammermoor":
"...notwithstanding Captain Craigengelt had proposed to him a most advantageous mode of vesting the money in Law's scheme..."
Son John was perhaps not as rigorous in his methods as William; more of an adventurer. He arrived in Paris after a long period of wandering the continent to avoid the law, after killing Beau Wilson (Law was later pardoned for this killing) in a duel.
In an appropriate corollary to today's economic bubbles, Law is responsible for one of the largest booms and busts in history. In the Mississippi scheme, Law purchased most of the Companie du Mississippi (1717), and was granted a 25 year monopoly on trade with North America and the West Indies. This company ultimately became the Company of the Indies, which, among other things, is responsible for building the city of New Orleans, in Louisiana.
Through successful marketing, shares in the Company of the Indies began to grow rapidly in value. Everyone in France, it seemed, wanted to buy in, and Law obliged by issuing more and more shares. Law himself could not appear in public without being accosted for a piece of the action. At the height of the bubble, in 1720, shares rose to 15,000 Livres, from 500 Livres the year before. This bubble ended the way all bubbles do; popped. By the end of 1720, shares had declined significantly, bankrupting many, and causing economic distress throughout the country.
Law's scheme, as Scott refers to it appears in his "The Bride of Lammermoor":
"...notwithstanding Captain Craigengelt had proposed to him a most advantageous mode of vesting the money in Law's scheme..."
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