Law, John (1671-1729), a Scottish financier and gambler, tried to revive the French economy by opening a bank in 1716 to issue paper money. His plans also included land speculation and trade in Louisiana, which became famous as the Mississippi Scheme.
Law was born on April 21, 1671, in Edinburgh. In 1694, he killed a man in a duel. Law was arrested and sentenced to death. However, he escaped from prison and fled to Amsterdam, capital of the Netherlands. There he studied the operations of the Bank of Amsterdam. He then accumulated a large fortune through gambling.
Law opened a bank in France in 1716. The paper money issued by the bank soon became readily acceptable. In 1717, Law established a company which soon monopolized trade with nearly all French possessions. In 1718, the bank became the Royal Bank.
Law’s bank issued excessive quantities of paper money. Much of it was used to speculate in stock issued by his trading company. Speculators soon demanded gold for their paper money. The whole project collapsed, leaving thousands of people bankrupt in the panic that followed (see Mississippi Scheme ). Law died on March 21, 1729, in Venice, Italy.
