John Law Scottish financier, reformer, swindler Date of Birth: 21.04.1671 Country: Great Britain

Biography of John Law

John Law was a Scottish financier, reformer, and swindler who founded a private bank in 1716, obtaining the right to issue banknotes. The Law Bank immediately began issuing paper money, replacing gold and silver coins. He proved to be a prophet, stating, "The use of banks is the best way to increase the quantity of money."

John Law was born in 1671 in Scotland, into a family of jewelers and bankers. At the age of 23, he was sentenced to death for a duel killing but was later pardoned and thrown into prison. After successfully escaping from prison, he sought happiness in Holland and then traveled extensively in Italy. During his time in Italy, banking flourished, and the curious and astute Law learned a great deal from his travels. Upon his return to his homeland in the early 1700s, he wrote two works, the main idea of which was to prove that money is the main wealth of the people and should therefore be multiplied. He proposed replacing expensive metallic coins with cheap paper money. His innovative proposals did not receive support in Scotland, so he moved first to Brussels and then to Paris, where he became known as a successful card player. With the help of influential friends, Law gained the trust of the Regent, Philippe d'Orléans. Many wondered how a foreigner, even if very intelligent and talented, managed to become the trusted advisor to the most powerful regent in France. The charismatic personality of John Law was probably the reason. France, at that time, was economically weak, with a growing national debt, chaotic tax collection, and a failing economy.

In 1716, John Law founded a private bank, obtaining the right to issue banknotes. The Law Bank immediately began issuing paper money, replacing gold and silver coins. He proved to be a prophet, stating, "The use of banks is the best way to increase the quantity of money." In August 1717, Law created the "West Indian Trading Company" and gained a monopoly on trade in weapons and tobacco with Canada, China, and India. Two years later, in May 1719, the "West Indian Trading Company" transformed into the "Indian Company." By the end of 1718, Law's private bank had become the State Bank of France (Royal Bank). Thousands of bank shares were bought daily. Within a few months, over 600,000 shares were printed, with prices far exceeding their nominal value. Despite the obvious instability of this business, on January 5, 1720, John Law was appointed Controller-General of Finances. At some point, Law gained control of the country's entire financial and credit system. However, sooner or later, the inflated shares had to collapse, and with their fall, the entire bank soon collapsed. In late 1720, the financial catastrophe forced John Law to flee the country.

Although John Law's business conduct was later called the "Law Affair," and its economic consequences were significant, there were some positive aspects to his venture. For instance, the state managed to pay off some of its external debts, and trade was firmly established on both sides of the Atlantic Ocean. However, John Law will forever be remembered in history as a great swindler.

Some even considered Law a socialist or democrat who aimed to overthrow the class system through financial manipulations. In reality, Law was not a bearer of any high socio-political ideas. After initially becoming incredibly wealthy, he later became completely bankrupt, settling in Venice after fleeing from France. For many years, he had to support his family solely through card games. He did not advocate for any democratic or socialist ideas, completely absorbed in his financial projects. He proposed some of his ideas to the Venetian Republic, but they were not accepted. John Law died from complications of pneumonia in 1729, leaving his family several paintings and a diamond valued at 40,000 livres. It is known that his wife died in poverty in Brussels. In any case, John Law himself died in poverty.

In general, history remembers John Law not only as a talented swindler but also as an incredibly lucky man. Luck followed him everywhere, from card tables to the love of unmatched beauties. His immense luck included having his death sentence commuted to a prison term and the loyalty of the Duke of Orléans, who allowed his favorite to flee the country when the time came for retribution. By the way, it was Law who laid the foundation for the city named in honor of his patron, the Duke - New Orleans. He commanded enough trust in people to sell shares of his own bank for money that he himself printed. Years later, John Law was called "one of the most brilliant PR managers."

Such was John Law, a fabulously lucky and somewhat brilliant man. Some see him as a great reformer, while others see him as a lucky swindler. Some recognize his financial foresight, while others see only fraud.