Millionaire

Millionaire Plot Summary

Introduction

In a lavish Parisian salon in 1708, a tall, elegantly dressed stranger captivated the French elite with his remarkable ability to win at cards. This was John Law, a Scottish mathematician and gambler whose meteoric rise to power would soon reshape the economic landscape of Europe. Standing over six feet tall with piercing gray eyes and impeccable manners, Law possessed an uncanny ability to calculate odds and probabilities in his head, allowing him to accumulate vast wealth at gaming tables across the continent. Yet his ambitions extended far beyond gambling—he envisioned nothing less than a complete revolution in how nations managed their finances. John Law emerged at a pivotal moment in economic history. Throughout Europe, warfare and royal extravagance had emptied treasuries, while trade and colonization demanded more currency than the limited supplies of gold and silver could provide. Into this crisis stepped Law with a radical proposition: paper money, backed not by precious metals but by the productive capacity of the state and its colonial enterprises. His experiments in France would create the world's first major stock market boom, spawn the term "millionaire," and introduce concepts that underpin modern banking and finance. Though his system would ultimately collapse spectacularly, the financial instruments he pioneered would become fundamental to the global economy. Through Law's remarkable journey from condemned murderer to the most powerful financial figure in Europe, we witness the birth of modern financial systems and the timeless lessons about speculation, human nature, and the dangerous seduction of easy wealth.

Chapter 1: Early Life and Gambling Prowess

John Law was born in April 1671 in Edinburgh, Scotland, the son of a successful goldsmith and banker named William Law. His father's profession provided young John with early exposure to the world of money and finance. The goldsmith-bankers of Edinburgh were among the city's elite, strutting through the streets in scarlet cloaks and cocked hats, lending money and holding deposits for the wealthy. William Law's prominence was such that he was appointed assay master for Edinburgh, responsible for testing and hallmarking precious metals throughout the city. From an early age, John displayed an extraordinary aptitude for mathematics and calculation. This natural talent would later become the foundation of his financial theories and gambling success. His father ensured he received an excellent education, intending for him to become a gentleman rather than follow directly in the goldsmith trade. When John was twelve, his father's business had flourished to the point where the family purchased Lauriston Castle, a prestigious three-story fortified building with 180 acres of land. This ascent into landed gentry seemed to promise a comfortable future for young John. Tragedy struck, however, when William Law developed bladder stones and traveled to Paris for treatment. The surgical procedure—a lithotomy, one of the oldest and most dangerous operations known—proved fatal. William died without seeing his family again and was buried in the Scots College in Paris. John was left fatherless at age twelve, with his mother Jean taking charge of the family's affairs and his father's complex web of financial dealings. As John matured into a strikingly handsome young man, he developed expensive tastes and a reputation as "Beau Law" or "Jessamy John" for his fashionable appearance. Rather than attending university, he indulged in the pleasures of gaming and womanizing. One friend remarked that he became "nicely expert in all manner of debaucheries," though his mathematical mind gave him a significant edge at the gaming tables. Unlike most gamblers who relied on luck, Law approached games of chance with a scientific understanding of probability, allowing him to calculate with astonishing accuracy the likelihood of specific cards appearing. By his early twenties, Law had grown restless in Edinburgh and set his sights on London, which offered greater opportunities for both social advancement and gambling. His mother likely didn't object to his departure, perhaps hoping that new surroundings might inspire more productive pursuits than his hedonistic lifestyle in Scotland. As he made the ten-day journey southward, few could have predicted that this charming Scottish gambler would one day hold the financial fate of Europe's most powerful nation in his hands.

Chapter 2: Duel, Escape, and Continental Exile

Law arrived in London around 1692, quickly establishing himself in the fashionable district of St. Giles. The capital was a revelation—home to 750,000 inhabitants, with streets teeming with markets and vendors, grand buildings rising from the ashes of the Great Fire, and a vibrant social scene. Law immersed himself in this world, attending theaters, strolling in elegant gardens, and dining in expensive taverns. Most importantly, he frequented the gaming salons where aristocrats and gentlemen gambled enormous sums nightly. Initially, Law's gambling exploits proved disastrous. Despite his mathematical prowess, he soon exhausted his inheritance and accumulated substantial debts. Facing potential imprisonment, he was forced to ask his mother to sell the Lauriston estate to save him from debtor's prison. This humiliating episode marked a turning point in Law's approach to gambling. He began studying the emerging science of probability, mastering the calculation of odds in games of chance. Unlike most gamblers who relied on luck, Law developed systems based on mathematical principles, allowing him to predict outcomes with remarkable accuracy. His fortunes soon reversed, and he began amassing considerable wealth at the gaming tables. Law's life in London took a dramatic turn on April 9, 1694, when he found himself in a fatal duel with Edward Wilson, a flamboyant dandy whose mysterious wealth had made him a subject of London gossip. The conflict apparently arose over a woman, Mrs. Lawrence, with whom Law was living. After an altercation at the Fountain tavern in the Strand, the men met in Bloomsbury Square where Wilson drew his sword. Law responded with a single defensive lunge that proved fatal. Though Law claimed self-defense, he was charged with murder, tried at the Old Bailey, and sentenced to death by hanging. While awaiting execution in the notorious King's Bench prison, Law's influential friends worked tirelessly to secure his release. Though they couldn't obtain a pardon, they managed to arrange his escape. After several failed attempts, Law finally fled the prison under mysterious circumstances—likely with the tacit approval of certain government officials who wished to avoid the scandal of executing a man of his connections. A reward of fifty pounds was offered for his recapture, but the description published in the London Gazette was deliberately inaccurate, describing a "black, lean man" with "large pock holes in his face" when Law was actually handsome and unblemished. Now a fugitive with a death sentence hanging over him, Law fled to the continent. Over the next decade, he traveled throughout Europe, visiting Amsterdam, Venice, Genoa, Turin, and Paris. Everywhere he went, he continued to support himself through gaming while deepening his understanding of finance and banking. In Amsterdam, he studied the operations of the Bank of Amsterdam, which had brought stability to Dutch currency through a sophisticated system of deposits and credit. In Italy, he observed the banking practices that had made Venice and Genoa commercial powerhouses. These experiences, combined with his mathematical genius, led him to develop revolutionary theories about money, credit, and trade that would later transform the European financial landscape. During this period of exile, Law also met Katherine Knowles, a noblewoman related to the Earl of Banbury. Despite her being married to a Frenchman named Seigneur, the two began a relationship that would last for the rest of Law's life. Together they traveled across Europe, eventually returning to Scotland in 1704, where Law hoped to implement his financial theories and perhaps secure a royal pardon that would allow him to return to England. Though his proposals were rejected in Scotland, the experience only strengthened his determination to find a ruler willing to embrace his radical economic ideas.

Chapter 3: Financial Vision and Opportunity in France

Throughout his exile, Law had been developing a revolutionary understanding of money and credit. Traditional economic thinking viewed gold and silver as the only legitimate forms of money, with their value deriving from their intrinsic scarcity. Law recognized this as a fundamental limitation: if a nation's trade and prosperity depended on money, but the supply of money was constrained by the available precious metals, then economic growth would always be artificially restricted. His breakthrough insight was that money was not valuable in itself but served as "the value by which goods are exchanged." Therefore, paper currency backed by a nation's productive capacity could function just as effectively as gold or silver. In 1715, opportunity knocked when Louis XIV, France's "Sun King," died after a 72-year reign. The country he left behind was financially devastated. Decades of warfare and extravagance had emptied the treasury, leaving a debt of over 2 billion livres. Tax collection was inefficient and corrupt, with revenues pledged years in advance. Many advisors suggested that France simply declare bankruptcy. Into this crisis stepped the new regent, Philippe, Duc d'Orléans, who would govern until the five-year-old Louis XV came of age. Orléans was a fascinating character—intelligent, dissolute, and open to new ideas. He and Law formed an immediate bond when they met, sharing interests in science, art, and mathematics. Law presented Orléans with a bold proposal: establish a national bank that would issue paper money backed by the government. The convenience of paper currency would stimulate trade and industry, while giving the state a way to manage its debts. Though initially hesitant, Orléans was captivated by Law's vision. In May 1716, Law was granted a charter for the Banque Générale, a private institution with the right to issue banknotes. It was a modest beginning—many investors remained skeptical, and the bank opened with limited capital—but Law's foot was now firmly in the door of French finance. At first, the French public, accustomed to the stable value of gold and silver, viewed paper money with suspicion. Law countered this by ensuring that his banknotes promised payment "in coin of the weight and standard of this day"—a crucial guarantee that protected holders from the frequent currency devaluations common in France. He also offered free or inexpensive banking services like money transfers and bill discounting. Most importantly, he secured the regent's patronage. When Orléans publicly deposited a million livres in the bank and ordered tax collectors to accept Law's banknotes, confidence grew rapidly. Within a year, Law's bank was showing impressive results. Commerce revived as the money supply increased, and the bank paid its shareholders a healthy dividend. Law had demonstrated that his theories could work in practice. For a man who had been a fugitive just a few years earlier, this success represented an extraordinary comeback. Yet in Law's ambitious mind, the bank was merely the first step in a much grander vision—one that would harness the untapped potential of France's colonial empire to create unprecedented wealth.

Chapter 4: Creating the Mississippi Company and Paper Money Revolution

With his bank proving successful, Law set his sights on an even more ambitious venture. France possessed vast territories in North America, particularly the Louisiana colony that stretched from the Gulf of Mexico along the Mississippi River deep into the continent. However, these lands remained largely undeveloped, with few settlers and minimal commerce. Law proposed creating a trading company with exclusive rights to develop the Louisiana territory, convinced that colonial trade could generate enormous profits while strengthening France's position as a global power. In August 1717, Law received permission to establish the Company of the West, popularly known as the Mississippi Company. The initial share offering met with limited enthusiasm—many investors remained skeptical about the colonial venture's prospects. Undeterred, Law implemented a series of brilliant financial maneuvers to build public confidence. He acquired additional trading monopolies, including tobacco farming in the colonies and slave trading in Senegal. Most crucially, in 1719 he engineered the merger of his company with the French East India and China Company, creating a global trading conglomerate with potential markets spanning from the Americas to Asia. As interest in the company grew, Law introduced a revolutionary innovation in corporate finance. He launched successive share issues with increasingly favorable terms, carefully orchestrating supply and demand. To purchase new shares, investors needed to own older ones, driving up prices for both. By mid-1719, shares that had languished below their initial offering price of 500 livres had soared to 3,500 livres. Law further fueled confidence by announcing generous dividend projections and ensuring that bank loans were readily available for share purchases. The masterstroke came in August 1719, when Law proposed that his Mississippi Company would take over the management of France's national debt. In exchange for this enormous responsibility, the company would receive the right to collect taxes—a lucrative privilege previously held by private financiers. To finance this takeover, Law issued more shares at 5,000 livres each. The public, now thoroughly caught up in speculation fever, subscribed eagerly. By December 1719, Mississippi shares were trading at the astounding price of 10,000 livres—twenty times their original value in less than a year. Meanwhile, Law's bank (now nationalized as the Banque Royale) printed vast quantities of paper money to fuel the economic boom. The streets of Paris were transformed. The narrow rue Quincampoix, where shares were traded, became so crowded that carriages could not pass. People from all walks of life—nobles, servants, priests, merchants—jostled to buy shares. Property values soared, luxury goods sold at unprecedented rates, and a new class of overnight millionaires emerged. The word "millionaire" itself was coined during this period to describe the Mississippi investors who had amassed previously unimaginable fortunes. Law himself was now at the pinnacle of power. In January 1720, he was appointed Controller General of Finances—the highest financial position in France. He converted to Catholicism to qualify for the office, a move that upset his Protestant companion Katherine. Portraits from this period show Law resplendent in rich attire, his face filled out from good living, his eyes confidently meeting the viewer's gaze. Behind him in one painting was the emblem of his empire—a Mississippi ship at full sail, powering toward the horizon. Few could have imagined how quickly this magnificent vessel would run aground.

Chapter 5: The First Millionaire and His System's Spectacular Collapse

By early 1720, John Law had achieved what seemed impossible—rising from condemned murderer to the most powerful financial official in Europe. He owned vast properties throughout Paris, including a third of the houses in the Place Vendôme, amassed priceless art collections, and became the object of fawning attention from the highest echelons of society. Ladies of the court shamelessly pursued him, with the regent's mother remarking sardonically, "If Law wanted it, the French ladies would kiss his backside." Even royalty treated him with deference; when he gave a party for his daughter, the papal nuncio kissed the child's hand. Yet beneath this glittering success, dangerous pressures were building. The Mississippi Company's share price had been driven to unsustainable heights by speculation rather than actual profits. Louisiana, portrayed in company propaganda as an El Dorado of gold, silver, and emeralds, was in reality struggling to attract settlers. Attempts to populate the colony grew increasingly desperate, with Law resorting to rounding up criminals, vagrants, and orphans for forced transportation. Public opinion, once adoring, began to sour as reports of mistreatment reached Paris. More worryingly, shrewd investors were beginning to cash out. The Prince de Conti, after being denied additional shares by Law, brought 4.5 million livres in banknotes to the bank and demanded payment in gold. Others followed suit, draining the bank's precious metal reserves. Law had printed far more paper money than could be backed by the available gold and silver. By December 1719, over 1.2 billion livres in banknotes were circulating, while the shares were valued at 4.8 billion livres—vastly exceeding France's actual wealth. Recognizing the danger, Law implemented increasingly desperate measures to maintain confidence. In January 1720, he prohibited the export of coins and bullion. In February, he banned the purchase of jewelry, pearls, and precious gems, then outlawed the production of gold and silver objects. When these restrictions failed to stem the tide, he made his most radical move yet—an edict making paper the only legal currency in France, with gold and silver to be phased out entirely. These draconian measures only accelerated the loss of confidence. On May 21, 1720, in a final desperate gambit, Law announced that both shares and banknotes would be gradually devalued by 50 percent. The public was outraged at this betrayal of the fundamental principle that had made his paper money initially attractive—its guaranteed value. Riots erupted outside the bank. Law's carriage was attacked, and he was forced to seek refuge in the regent's palace. Under intense pressure, the regent revoked the devaluation edict a week later, but the damage was irreparable. Share prices plummeted from 9,000 to 2,000 livres within weeks. The bank was besieged by crowds demanding to exchange their paper for coins, but reserves were woefully inadequate. In a ghastly incident on July 17, fifteen people were crushed to death in the crowd outside the bank. Law himself became the target of public hatred. His house required constant guard, and he could not venture out without armed protection. By the end of 1720, Law's system had completely unraveled. The bank closed its doors, the company's privileges were curtailed, and a commission was appointed to investigate the financial disaster. In December, with public fury at its height and his enemies closing in, Law fled France with his son, leaving behind his vast properties and investments. The regent provided him with a passport and a carriage, but he was stopped at the border by a vengeful official who confiscated his money. He arrived in Brussels nearly penniless, his spectacular rise and fall accomplished in just four years.

Chapter 6: Legacy and Economic Impact

After fleeing France, Law spent his remaining years in a fruitless quest for redemption. He moved between Brussels, Venice, Copenhagen, and London, living off his gambling skills and the charity of friends while repeatedly petitioning the French government to settle his affairs honorably. Though he maintained that his system would have succeeded with more time and better management, most contemporaries dismissed him as a charlatan who had ruined countless investors. When he died in Venice in 1729, at the age of fifty-eight, he left almost nothing to his long-suffering companion Katherine and their children. The immediate aftermath of Law's experiment was grim for France. A return to metallic currency was accompanied by a severe economic contraction. The investigation into the "Mississippi Bubble" resulted in massive confiscations from those who had profited during the boom. Law's name became synonymous with financial folly, and it would be eighty years before France would again attempt to introduce paper money—during the Revolution, when assignats based on confiscated church lands circulated briefly before suffering a similar inflationary fate. Yet Law's ultimate legacy proved far more significant than contemporary judgments suggested. By issuing paper currency and creating a sophisticated stock market, he had introduced financial innovations that would eventually become fundamental to modern economies. The national debt, which had threatened to bankrupt France, was effectively reduced by two-thirds through the inflation he had engineered. This inadvertently demonstrated how paper currency could be used to manage government finances, a lesson not lost on later practitioners. More profoundly, Law had challenged the traditional conception of money as something with intrinsic value. His insight that money functioned primarily as a medium of exchange rather than a store of value anticipated key developments in monetary theory. When he wrote that "money is not the value for which goods are exchanged, but the value by which they are exchanged," he was articulating a principle that would later become fundamental to modern economics. The internationally renowned economist J.K. Galbraith later observed that Law "showed, perhaps better than any man since, what a bank could do with and to money." Even Law's failures provided valuable lessons. The Mississippi Bubble demonstrated the dangers of unchecked speculation and the importance of maintaining public confidence in financial systems. It showed how quickly market psychology could shift from euphoria to panic, and how easily the line between innovative finance and fraud could be crossed. These lessons would be repeatedly forgotten and painfully relearned in subsequent financial manias, from the South Sea Bubble that followed shortly after in England to the stock market crash of 1929 and beyond. Perhaps the most enduring aspect of Law's legacy was his vision of economic possibility. In an age when most believed that national wealth was limited by the supply of precious metals, he glimpsed the productive potential of credit and paper currency. Three centuries later, global finance operates largely as Law imagined—with digital entries rather than physical currency, representing value but possessing little intrinsic worth themselves. The world's monetary system now functions without the gold standard, just as Law proposed. His vision was ultimately vindicated, even if he himself was ruined by its premature and flawed implementation.

Summary

John Law's remarkable journey from condemned murderer to financial mastermind embodies both the brilliance and dangers of financial innovation. His fundamental insight—that money derives its value not from precious metals but from public confidence and the productive capacity it represents—was revolutionary for his time yet forms the bedrock of modern economics. Law's spectacular rise and fall in France demonstrated how financial systems built on confidence can create extraordinary wealth but collapse catastrophically when that confidence evaporates. The cautionary tale of the Mississippi Bubble continues to resonate in today's world of complex financial instruments and periodic market manias. As Law discovered through bitter experience, human psychology—greed, fear, herd mentality—ultimately determines the success or failure of even the most ingenious financial systems. Yet his legacy extends beyond his failures. The paper money revolution he initiated, his creative approaches to public debt, and his understanding of how banking could multiply economic activity all point to a visionary who glimpsed the future of finance three centuries ahead of his time. For investors, economists, and anyone fascinated by the intersection of human nature and financial systems, John Law remains a compelling figure whose story offers timeless insights into the powers and pitfalls of monetary innovation.

About Author

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Janet Gleeson

Janet Gleeson was born in Sri Lanka and has a degree in both art history and English. She has worked at Sotheby's, as well as at Bonham's Auctioneers, where she headed the Old Master Painting Department. A former art and antiques correspondent for House and Garden and editor for Reed Books, Janet Gleeson has contributed articles to numerous publications, including The Antiques Collector, Country Life, and Apollo.

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