With some similarities:
feedmag.com
With some differences:
Law, John
Law, John,
1671-1729, Scottish financier in France. After killing a man in a
duel he fled to Amsterdam, where he studied banking. Returning
to Scotland (1700), he proposed to Parliament plans for trade
and revenue reforms and published Money and Trade
Considered (1705). His ideas and a proposal for a national bank
were rejected, and Law went to France. The finances of France
were in critical condition at the death of King Louis XIV, and
Law succeeded in winning the support of the regent, Philippe II,
duc d'Orléans, for a scheme that promised to reduce the public
debt and stimulate French trade and industry. Law believed that
credit and paper money, by encouraging investment, would
regenerate the French economy. In 1716 the regent chartered
Law's private Banque générale and authorized it to issue paper
currency. In 1717, Law acquired the monopoly of commercial
privileges in the French colony of Louisiana and organized the
Compagnie d'Occident, or Mississippi Company, which was
consolidated (1719) with the French East India Company and
other organizations as the Compagnie des Indes. The Banque
générale was made the royal bank in 1718, and its issues of notes
were guaranteed by the state. Finally (1720), Law, made
controller general of finances, merged the huge stock company
with the royal bank and took over most of the public debt and
the administration of revenue. A rash of speculation swept
France. Numerous small investors bought stock, which soared to
heights far beyond what could be expected in returns from the
exploitation of the colonies (see Mississippi Scheme) and from
trade with East Asia. The bubble burst suddenly. Well-informed
speculators sold their stock at huge profits, setting off a frenzy
of selling that ruined thousands of investors. The system
collapsed (1720), and Law left France in disgrace. He died in
Venice, where he had supported himself by gambling. The dizzy
speculation caused by Law's system greatly helped to discredit the
regency and the idea of a national bank. Although the immediate
results of Law's schemes were disastrous, colonial enterprise
received a lasting stimulus. His monetary theories have found
defenders among later economists. |
