In the city of Edinburgh, eleven years after the restoration of the Stuarts, a son was born to an opulent goldsmith and banker, named John Law, to inherit his name and wealth. This well-to-do citizen came of an old Fifeshire family, which justified him, when he had amassed sufficient means, in purchasing an estate, and taking his place among the territorial gentry as Law of Lauriston— Lauriston lying on the shore of the Forth, on the borders of West and Mid Lothian. But he did not abandon his trade, nor did he wish his son to grow above it; and John Law the younger, at the age of fourteen, entered his father’s counting-house, where, being gifted with an extraordinary aptitude for figures, he quickly mastered the principles of the current monetary system. For three years he was all that a Scotch father, in Law of Lauriston’s place, could have wished him to be; but at the age of seventeen he began to display tendencies of quite another sort. Tall and well-made, he loved to attire himself in becoming clothes. He sought the gaieties of society, and the ladies smiling upon the dashing youth, who was heir, be it remembered, to a good property, he became quite a personage in Edinburgh society, his admirers styling him “Beau Law,” and his detractors sneering at him as “Jessamy Law.” The death of his father, which happened at this time (1688), left him at liberty to follow his own devices, and abandoning the counting-house, he started off for London, bent upon “seeing life” and widening his knowledge of the world.

Money, youth, health, good looks, and a large stock of self-confidence—with such an equipment Law soon made his way in certain circles. In London, as in Edinburgh, ladies of rank looked graciously upon the handsome young Scot ; and in the most select drawing-rooms of Mayfair he was a welcome visitor. Unfortunately he contracted a love of play. At first his ventures at the gamingtable were crowned with success. He pursued a definite system which he had founded upon an ingenious calculation of chances, and his fellow-players, astonished by his luck, imitated his play and staked their money on the same chances. But the gamester’s fate in due time overtook him. His system broke down. He met with heavy losses, and, endeavouring to retrieve them by bolder ventures, met with losses heavier still. Finally, after a nine years’ headlong career, he found himself burdened with debt to an extent which compelled him to mortgage his paternal estate. This was not all. An affair of gallantry with Miss Villiers (afterwards Countess of Orkney) involved him in a quarrel with a Mr. Wilson. In those days the usual result of a quarrel was a duel; and Law had the misfortune to shoot his antagonist dead on the spot. He was arrested, tried on a charge of murder, and sentenced to death, but the sentence was commuted to a fine on the ground that the offence was only manslaughter. An appeal being lodged by the dead man’s brother, Law was detained in the King’s Bench, but by some effort of dexterity effected his escape, got down to Dover, and crossed the Channel.

He was now twenty-six. For three years he travelled the Continent, and, his early taste for figures reviving, examined with much curiosity the financial and banking systems of the countries through which he passed. About 1700 he seems to have returned to Edinburgh, where he published a small pamphlet entitled Proposals and Reasons for Constituting a Council of Trade. It did not attract the attention it deserved; but, nothing daunted, the ingenious speculator launched a project for establishing a Land Bank (or, as the small wits of the day called it, a Sand Bank), the notes issued by which were to exceed the entire landed property of the State, at ordinary interest, or were to equal the value of the land, with the right to take possession at a certain time. This project excited a good deal of discussion, even within the walls of the Parliament House; but, in spite of the strenuous efforts of its supporters, it was rejected by the majority, who passed a resolution hostile to all kinds of paper credit.

Finding his own country disinclined to honour him as a prophet, and disappointed in his efforts to procure a pardon for the homicide of Mr. Wilson, Law returned to the Continent, and to his old habits of gambling. For fourteen years he passed from one gaming-house to another in the chief Continental countries, making huge sums of money by his skilful combinations and wonderful insight into the doctrine of chances. He acquired such a reputation in this way that the magistrates of Vienna, and afterwards those of Genoa, expelled him from their cities as too dangerous an example for young men. In Paris he contrived to make the acquaintance and secure the friendship of the Duke of Orleans, the Duke of Vendome, and the Prince de Conti, who were fascinated by his address, his daring, his knowledge of men and manners, his vivacity, and the shrewdness that underlay it; but having offended D’Argenson, the lieutenant-general of the police, he was compelled to absent himself for a time from the capital. It was probably before this event that the restless adventurer had submitted a scheme of finance to the Comptroller, Desmarets. When it was laid before Louis XIV., who was then in the fanaticism of his dotage, he inquired whether the author of it was a Romanist, and being answered in the negative, refused to look at calculations which must therefore be heretical.

The untiring speculator then proposed his favourite panacea of a Land Bank to Victor Amadeus, Duke of Savoy, who sagasiously replied that his territories were all too narrow for so vast a project, and that he himself was too poor to enjoy the luxury of being ruined. He recommended him, however, to make another appeal to the King of France, sarcastically observing that, from what he knew of the character of the French, they would be delighted with a plan so full of glitter and promise.

On the death of Louis XIV. in 1715, Law’s opportunity came at last. The Duke of Orleans became Regent, and the Duke was Law’s friend. The tenacious Scot returned to Paris, and pressed his schemes with unflagging persistency. The Regent listened with no reluctant ear. France was reduced almost to bankruptcy by years of extravagant misgovernment, and he was really anxious to accomplish something for her relief, if it could be done without entailing upon himself any sacrifice of his ease or his pleasures. Well, here was this Scotchman at his elbow—a Deus ex machina! And there was a gallant assurance about him—an airy self-confidence—a conviction of success which captivated everybody, supplemented as it was by his fluency of speech, his address, his command of figures, his buoyant plausibility. To tell the truth, there was nothing very dangerous about the financial principles he laid down—England and Holland had long acted upon them. That no country could carry on extensive commercial transactions unless its metallic currency was assisted by a paper currency was an obvious truth. That the national credit should be maintained at all costs was a truth no less obvious. What was original in Law’s exposition was his project of a public bank, which should control the administration of the royal revenues; and upon these, and upon landed security, should issue notes. He proposed that this bank should be managed, in the King’s name, by a certain number of commissioners, to be named by the States-General.

Meanwhile, Monsieur Lass—as the French, to avoid the wy called him—had risen into great popularity, and was accepted by all classes as a possible financial saviour. It was with something like a burst of enthusiasm, therefore, that the nation welcomed the royal edict of May 5, 1716, which authorized Law (and his brother) to establish a bank under the name of Law and Company, the notes of which should be received in payment of the taxes. The capital was fixed at six millions of livres, in 12,000 shares of five hundred livres each, purchasable one-fourth in specie, and the remainder in billets d’etat, or State notes. Thus, Law’s perseverance was at last crowned with success, and the idea realized which had haunted his mind through years of adventure and wandering. It was only right that Fortune should do as much as this for a man who had wooed her with such infinite courage and unfailing energy; but the capricious goddess was prepared to do more, and more, before she again turned her wheel downward.

In the administration of his bank Law displayed unquestionable financial ability. He made all his notes payable at sight, and in the coin current at the time they were issued—a provision which gave them even a higher value than the precious metals, since these were being continually tampered with by the Government, whereas Law’s notes underwent no abatement. The public confidence was increased by his frank declaration that a banker deserved death if he did not retain sufficient securities to meet every demand. In less than a year his notes reached a premium of 15 per cent. The effect upon the trade and commerce of the country was extraordinary. Every branch of industrial enterprise received a new stimulus through the recovery of the national credit and the increased supply of capital. Greater confidence was felt by all classes; and France enjoyed a prosperity to which she had long been a stranger.

Unfortunately this rushing tide of success proved too much for the prudence both of Law and his royal patron. The Regent, astonished at the immense beneficial effects of a paper currency when used to supplement a metallic currency, was led to suppose that the latter might entirely be superseded by the former; while Law conceived the project by which he is so disadvantageously remembered— though it was not so entirely a chimaera as is sometimes represented—the great Mississippi Scheme.

Law obtained from the Regent permission to establish a Company with the exclusive right of trading to the Mississippi and the province of Louisiana, which is on its western bank. The knowledge which then prevailed of that part of North America was exceedingly vague and imperfect; it was supposed to be a Tom Tiddlers

Ground of gold and silver, which would pour without stint into the coffers of the Company; and thus enriched, the new corporation was to farm the taxes and supply all the coinage of the country. Letters patent incorporating the Company were issued in August 1717. The capital was divided into two hundred thousand shares of 500 livres each, the whole of which might be paid in billets d'etat at their nominal value, though this was a great deal more than they realized in the market.

From this time Law, the Regent, and the nation seem to have been seized with a fever of speculation. Fresh privileges were heaped upon Law’s bank, which was finally erected into the Royal Bank of France. Departing from Law’s maxim as to the guilt of issuing notes for which no funds were provided, the Regent caused notes to the amount of one thousand millions of livres to be thrown upon the country. To this disastrous course Law seems to have assented; or if he protested at first, he offered no opposition to later issues of the same chimerical character. For awhile his brain was dizzied by his success, and he failed to see the certain ruin he was bringing upon himself by this violation of every sound principle of finance. Meantime the Regent, and his Chancellor d’Argenson, proceeded at headlong speed in a course which meant national bankruptcy as its goal. The Parliament protested, but the Regent overruled its protests, passed statutes which the Regent cancelled by his authority; and at last in its despair smiled grimly when some of its members, who traced every evil to Law’s example and influence, suggested that he ought to be gibbeted at the gates of the Palais de Justice. Law, alarmed at the violent menace, sought the protection of the Regent, who silenced his refractory Parliament by imprisoning the President and two of the most prominent councillors.

Our Scottish adventurer then turned to his favourite Mississippi scheme. Early in 1719 he obtained a fresh concession—the exclusive privilege of trading to the East Indies, China, the South Seas, and all the possssions of the French East India Company, founded by Colbert, and then re-christened his Company with the proud title of La Compagnie des Indes, besides creating fifty thousand new shares. That fervent imagination, which is ordinarily held in check by the reserve of the Scotch character, was now kindled in Law by the wide sweep of territory included within his scope of action; and prospects of boundless wealth rising upon his heated brain, he promised to every shareholder a profit of not less than one hundred and twenty per cent, upon his investment.

A delirium of speculation now seized upon France. This prospect of almost boundless wealth—of wealth beyond the dreams of avarice—had a charm for all classes and both sexes. There were at least three hundred thousand applicants for the fifty thousand shares; while the old shares were not less in demand, and were sold and re-sold at ever-increasing premiums. Some of the more eager petitioners took lodgings close to Law’s house in the Rue de Quincampoix, that they might pick up any grains of gold which fell from his fingers. The street was too narrow to hold the crowds that daily flocked towards it. A cobbler who rented there a small stall made two hundred livres a day by letting it out to speculators. To obtain greater accommodation, Law purchased the magnificent Hotel de Soissons of the Prince de Carignan, and removed thither. The Prince reserved to himself the gardens; and an edict being published which forbade the sale or purchase of stock anywhere but in these gardens, they yielded him an enormous return. For the convenience of the brokers and their clients, five hundred small tents and pavilions were planted among the groves and parterres, and these were let at the rate of five hundred livres a month.

Few were the sane brains which escaped a touch of the prevalent madness. Two sober men of letters, M. de la Motte and the Abbe Terasson, congratulated each other on their immunity. A few days afterwards, La Motte ascended the grand staircase of the Hotel de Soissons to purchase some Mississippi shares, and met the Abbe coming down from Law’s rooms. “Ha!” said the Abbe, “is that you, La Motte?” “And can that be you, Abbe?” It was some weeks before they could look in each other’s face and breathe the word “Mississippi.”

To obtain admission to Law’s presence was the object of more stratagems than an introduction at Court. What was a smile or a word from the Regent compared with the scrip of Mississippi stock? The crowd of applicants was so great that Law, with all the good-will in the world, could see only a portion of them, and dukes and duchesses and marquises and marchionesses waited for hours in his antechamber on the chance of seeing him, or bribed his servants heavily to announce their names. A lady of rank, who had failed several days running in her efforts to see the fortune-making Scot, ordered her coachman to keep a strict watch when she was out driving, and if he saw Mr. Law coming to contrive to upset her. For three consecutive days, the lady and her coachman wandered about Paris watching for an opportunity. On the fourth it came. “Upset us now,” she cried out to her coachman; “for Heaven’s sake, upset us now!” With commendable dexterity he drove against a post, and turned his lady out on the pave just as Law was passing. Of course Law hastened to offer his assistance, placed the lady in his own carriage, and drove to the Hotel de Soissons, when she confessed her manoeuvre, and was rewarded for her ingenuity and boldness with a quantity of the coveted shares.

The Regent, one day, was mentioning in the presence of his courtiers that he desired to nominate some lady of the rank of a duchess to attend upon his daughter at Modena, but added, that he hardly knew where to find one. “No!” said the Abb6 Dubois; “well, then, I can tell your Highness where to find every duchess in France—in Mr. Law’s antechamber.”

M. de Chirac, a celebrated physician, having purchased stock under unfavourable conditions, was anxious to sell out; and as it continued to fall for two or three days, his anxiety greatly increased, so that his mind was completely absorbed with the subject. Being called upon to attend a nervous lady patient, he murmured to himself, as he felt her pulse—“It falls! it falls! good Heavens, it does nothing but fall!” “Oh, Monsieur de Chirac!” said the lady, starting to her feet. “I am dying! I am dying! it falls! it falls! it falls!” “What falls?” exclaimed the amazed doctor. “My pulse! my pulse! said the lady. “Do you not say so? Oh, I must be dying!” “Calm your fears, my dear madame,” said M. de Chirac. “I was alluding to the stocks. The truth is, I am likely to be a great loser, and my mind is so disturbed that I hardly know what I am saying.”

In the prosperity that prevailed while the inflation lasted, Law naturally shared. The highest nobility paid him the most respectful attentions; his daughter’s hand was sought by the heirs of princely and ducal families. He purchased fine estates in different parts of France ; and entered into a negotiation with the family of the Duke of Sully to purchase the marquisate of Rosny. As his religion was a bar to his advancement, the Regent promised to appoint him Comptroller-General of the finances, if he would make open profession of Romanism. Law on this point was less scrupulous than most Scotchmen are, and was confirmed by the Abbe de Tencin, in the cathedral of Melun, in the presence of an immense multitude. On the following day he was elected honorary church’ warden of the parish of St. Roeh, and signalized the occasion by bestowing on the parish a gift of five hundred thousand livres. Such were the sums at the command of the soi-disant Edinburgh goldsmith!

Notwithstanding Law’s rapid elevation, and the sense of power which, as the dispenser of wealth and influence, he must necessarily have felt, and the implicit confidence placed in his advice by the Regent, he preserved all his coolness of judgment and simplicity of manner. Towards ladies his behaviour was marked by a charming courtesy; his equals or his inferiors he met in a spirit of the frankest affability. It was only towards the “cringing nobles,” who thought to win his favour by their lavish adulation, that he showed himself proud and forbidding. His own countrymen he treated with the greatest cordiality, and they could always rely upon his services. That he expected them to remember that he was one of the most powerful men in Europe, was not, perhaps, a very serious fault. There certainly was as much pride as politeness in his reception of Archibald Campbell, Earl of Islay, and afterwards Duke of Argyll, who, when he called upon him, was ushered through a crowded antechamber, where the best blood of France was waiting the financier’s pleasure, to find Law sitting quietly in his library, writing a letter to his gardener at Lauriston about the planting of some cabbages! He entertained the Earl for a considerable time, played a game of piquet with him, and deeply impressed him by his fine breeding and sagacity.

Law was at this time engaged in his scheme for building up a French empire in the valley of the Mississippi, whither he proposed to draft the surplus population of the country. On the morning of September 19, 1719, the bells of St. Martin rang forth a wedding peal; to the music of which a procession of one hundred and eighty women, dressed in white and garlanded with flowers, each attended by a bridegroom suitably attired, wound its way through the crowded streets. These couples were not only linked together by matrimonial bonds, but by iron fetters; for they had been drafted from the Paris prisons, and mated on some French principle of order, previous to being shipped off to find an Arcadia in the far West This was the characteristic way in which the Regent’s government developed Law’s plan of colonization. It went further, and seized upon any part of the population which it conceived to be “damaged” or unsound— establishing a kind of press-gang, which seized upon this person and upon that, loaded them with chains, and marched them upon shipboard. With the usual French logic, it was argued that to promote the growth of a new empire, it was desirable to infuse French blood into the native royal races of North America. “Accordingly, the Queen of Missouri was induced to come to Paris to select a husband. The fortunate object of her choice was a stalwart sergeant in the Guards, named Dubois. A disagreeable condition attached to the new dignity probably impeded more distinguished candidates. The Queen of Missouri, being a Daughter of the Sun, was entitled to cut off her husband*s head if he displeased her; and rumour went that Dubois the First actually suffered the penalty of this rigid discipline. But all distinct record of his fate was lost in the tangled mixture of wild adventures encountered by the thousands who were unshipped on the desert shore—shovelled, as it were, into a strange land swarming with savages, and left there to struggle for life and food.”

But early in 1720, the wonder-working “system” which had sprung from Law’s fertile brain, began to show signs of collapse. The alarm was first raised by the high price of commodities, which had kept pace in their upward progress with the constantly increasing inflation of “the shares.” A hint of the danger they were incurring was conveyed to Law and the Regent, by the action of the Prince de Conti. Offended that Law had refused to sell him some shares in India stock at his own price, he sent to the Bank to demand payment in specie of so enormous a number of notes, that three waggons were required for its transport. Law did not fail to impress on the Regent the alarming consequences that would ensue if his example found imitators; and the Regent, who fully appreciated them, compelled the Prince to refund two-thirds of the money. Happily the Prince was unpopular, and a run on the Bank was for a time averted. But, by and by, others took the same action, through prudence, that he had taken through revenge. A want of specie was gradually felt by all classes ; and as it was traced to the conduct of those discreet speculators, who smuggled into England or Holland the coin they received for their scrip, the Regent, at Law’s instigation, issued edicts depreciating the value of specie five, and afterwards ten, per cent, below that of paper, and at the same time limiting the payments of the Bank in gold and silver. Such artificial restrictions, instead of restoring public confidence, weakened it; and Law, or the Government, ventured on a still bolder coup, but with a more ruinous effect. An edict was published which forbade any person whatever to hold more than five hundred livres (£20) in specie, whether in coined money or in plate or jewellery! It is unnecessary to dwell on the loss which this absurd and iniquitous statute inflicted on the better classes. It was carried out in the most rigorous manner. The police were instructed to make domiciliary visits, and as every informer received one-half of the forfeited treasure, the espionage was widespread and most harassing. There is a good story told, however, of the President Lambert de Vannon, who informed the chief of the police that he was prepared to denounce a criminal possessed of five thousand livres’ worth of bullion. The chief was astonished that such a man should stoop to the role of informer, but said, “Name the offender.” “C'est moi, le President Lambert de Vannon!” It was the only way he could think of for saving a moiety of his property. Lord Stair, wittiest of ambassadors, said it was impossible now to mistake the sincerity of Law’s Catholicism ; after having shown his faith in transubstantiation by turning so much gold into paper, he had ended by establishing the Inquisition.

Alas for our brilliant Scotchman ! It was all of no avail. The structure he had reared upon paper came down with a crash, like a child’s house of cards, before the first breath of suspicion. The reported wealth of the Mississippi Valley was discredited ; the stock of the Company sank lower and lower; and though the Regent and his Council issued more notes, these failed to restore the public confidence, since they could not be exchanged for specie. Early in May, it was computed that the total number of notes in circulation reached two thousand six hundred millions of livres, while all the specie in the country did not exceed fifty millions of pounds, or about half that amount. The Regent’s Council then perceived that something must be done in the way of equalization, and the measure finally decided on wras the depreciation of the notes by one-half. An edict to this effect was issued on May 21, but the Parliament refused its concurrence, and such an outburst of indignation shook the country, that the Council recalled its edict.

This was on the 27th—a black day for France. On that day the Bank stopped payment in specie, and Law’s dream of power was at an end. His name, wherever mentioned, was loaded with curses ; he was denounced as the author of the national bankruptcy. The mob stoned his carriage as he returned from the theatre, and assumed so menacing an attitude that the Regent stationed a company of Swiss Guards before his hotel night and day. But even this precaution proved insufficient, and Law found it necessary to take shelter in the Regent’s apartments in the Palais Royal. The ruin that had overtaken so many thousands of persons, and shattered the public credit, was not able, however, to check the flow or blunt the edge of French wit. When the trouble was at its worst, epigram succeeded epigram, and pasquinade was piled upon pasquinade. Here is a specimen—

“Lundi, j’achetai des actions,
Mardi, je gagnai des millions,
Mercredi, j'arrangeai mon menage,
Jeudi, je pris un equipage,
Vendredi, je m’en fus au bal,
Et Samedi k l’hopital.”

[On Monday, I bought shares; on Tuesday, I made millions; Wednesday, I furnished my house; Thursday, I set up a carriage; Friday, I went to the ball; and on Saturday to the poor-house.]

Through all this stormy time Law did credit to his nationality by his imperturbable courage. He remained unmoved in the midst of the chaos, maintaining unshaken his confidence in his system, and in—paper. Only on one occasion does his temper seem to have yielded, when a mob pursuing him with yells and execrations, he stepped from his carriage, faced them calmly, and saying disdainfully, “Vous etes canailles" and walked on. Whether his words were lost in the tumult, or whether his “ majestic sang-froid” imposed on the multitude, the brave Scotchman was allowed to reach the Palais Royal without accident. His coachman was less fortunate. Imitating his master’s disdain, he repeated the contemptuous epithet; whereupon the canaille fell upon him, tore him from his seat and stamped him to death, afterwards breaking the carriage into fragments. The outrage was witnessed by the President of the Parliament, who gained much applause by relating it to the members in an improvised couplet—

“Messieurs! Messieurs! bonne nouvelle,
La carosse de Lass est reduit en cannelle ”

—to which the reply was a general shout of hilarity, and a solitary voice which asked, “And Law himself, is he not torn to pieces?”

Wounded by the ingratitude—for such it seemed to him—of the people whom he had desired to benefit, and conscious of the integrity of his motives, Law, who preserved in his fall the dignity of a Coriolanus, obtained the Regent’s permission to leave France. As he drove towards the frontier, his carriage was followed by another in swift pursuit, which carried, not an officer of justice, but the agent of the Russian Emperor, charged to invite him to take charge of the finances of Russia. Though a poor man— out of the wreck of his fortune he had saved little more than a diamond worth four or five thousand pounds—he declined the brilliant proposal. At Venice he was met by Cardinal Alberoni, the great Spanish minister; and elsewhere his renown drew the principal personages in Europe to his levees. To defray his expenses he seems to have resumed his attendances at the gaming-table; though his was not the paltry dependence on luck of the ordinary gambler, but a system of combinations based upon elaborate calculations. For some time he cherished the hope of being recalled to France, but with the death of the Regent, in 1723, this hope expired also; and after a visit to Copenhagen, he obtained permission from the British Government to return to his native country. It is a curious fact that he was offered and accepted a passage on board the flag-ship of Sir John Norris, the Admiral of the British fleet: he who had fled from the country a discredited fugitive, returning in state like some high and privileged personage.

For about four years Law remained in England, and then proceeded to Venice, where, in 1729, the man who had controlled the disposal of millions of pounds, died in indigent circumstances. An epigrammatist of the time devoted a quatrain to his memory—

“Ci-git cet Ecossais cdlebre,
Ce calculateur sans egal,
Qui, par les regies de I’Algebre,
A mis la France a Phopital.”

[Here lies that famous Scotchman, That calculator unequalled, Who, by the rules of Algebra, Has sent France to the poor-house.]

It may be said of Law that his work lived after him, though the shrewdest political vision could not have foreseen the far-reaching consequences that flowed from it. His Mississippi scheme was the immediate cause of the South Sea Bubble in England, and of a similar delusion in Holland. It left on the hands of France the colony of Louisiana, which Napoleon sold to the United States in 1803 for fifteen millions of dollars. This purchase gave to the slave-holding States a preponderating influence which eventually led to the secession of the Southern States and the war between North and South—the greatest civil war in history. Law’s scheme also left France, as Mr. Hill Burton remarks, in possession of an East India Company which rivalled our own, and but for the genius of Clive and Hastings might have established a Franco-Indian empire, and deprived us of that great dependency to which we owe so much in profit and prestige. These were the notable results of Law’s billets d action! A sanguinary civil war in the West—an Anglo-Indian empire in the East —both may be directly traced to the scheme evolved from the fertile and unresting brain of a Scottish adventurer—the son of John Law of Lauriston, banker and goldsmith of Edinburgh.