Mr. Law, King's Counsel, Controller General of Finances, Inspector General of the Bank and the Company of the Indies


John Law was a Scottish financier and adventurer who was also an authority on banking and the circulation of money. He convinced the regent of France, Philippe d’Orléans, that he could liquidate the French government’s debt by a system of credit based on paper money. In 1716 he launched the Banque générale, which had the authority to issue notes. The following year he founded the Compagnie d’Occident (Company of the West), the capital for which was raised by the sale of 500-livre shares, payable only in government notes. The first shares were called “mothers,” then, aided by the initial success, came the “daughters” and the “granddaughters.” Using advertisements and public relations in which he presented the Mississippi as a land of plenty, Law generated extraordinary enthusiasm for his scheme. In exchange for obtaining the trade monopoly for Louisiana, the Company of the West had to provide for the colony’s defense—the upkeep of fortifications and troops and gifts to the Indians. It also had to transport to the colony, over the next 25 years, 6,000 colonists and 3,000 African slaves. In 1719, the Company of the West acquired several other overseas companies (including the Senegal, East Indies, and China companies) to form the Compagnie des Indes (Company of the Indies). The issue of excessive quantities of bank notes weakened confidence, however, and Law’s system collapsed. Law was ruined and fled to Brussels in December 1720. This portrait dates from 1719–20 and presents Law at the height of his glory and power. By this time, he had accumulated the titles and functions of conseiller du roi (King’s counsel), controller general of finances, and inspector general of the two institutions created at his initiative, the Banque générale and the Company of the Indies.

Last updated: January 8, 2018