Samuel Bernard

John Law was born into a family of bankers and goldsmiths from Fife; his father had purchased a landed estate at Cramond on the Firth of Forth and was known as Law of Lauriston.

Law had joined the family business at age fourteen and studied the banking business until his father died in 1688.

Law subsequently neglected the firm in favor of more extravagant pursuits and traveled to London, where he had lost large sums of money in gambling.

Law had on April 9, 1694, fought a duel with Edward Wilson in Bloomsbury Square in London.

Wilson had challenged Law over the affections of Elizabeth Villiers.

Law, having killed Wilson with a single pass and thrust of his sword, had been arrested, charged with murder and tried at the Old Bailey before the infamously sadistic 'hanging-judge', Salathiel Lovell.

Found guilty of murder, and sentenced to death, he had been initially incarcerated in Newgate Prison to await execution.

His sentence was later commuted to a fine, upon the ground that the offense only amounted to manslaughter.

Wilson's brother appealed and had Law imprisoned, but he had managed to escape to Amsterdam.

Law has urged the establishment of a national bank to create and increase instruments of credit and the issue of banknotes backed by land, gold, or silver.

He had published a text entitled Money and Trade Consider'd with a Proposal for Supplying the Nation with Money (1705).

The first manifestation of Law's system had come when he had returned to Scotland and contributed to the debates leading to the Treaty of Union 1707.

Law's propositions of creating a national bank in Scotland were ultimately rejected, and he left to pursue his ambitions abroad.

He has spent the past ten years moving between France and the Netherlands, dealing in financial speculations.

Problems with the French economy present the opportunity to put his system into practice.

He has the idea of abolishing minor monopolies and private farming of taxes.

He would create a bank for national finance and a state company for commerce, ultimately to exclude all private revenue.

This would create a huge monopoly of finance and trade run by the state, and its profits would pay off the national debt.

The council called to consider Law's proposal, including financiers such as Samuel Bernard, had rejected the proposition on October 24, 1715.

The wars waged by Louis XIV have left France completely wasted, both economically and financially.

The resultant shortage of precious metals has led to a shortage of coins in circulation, which in turn limits the production of new coins.

It is in this context that the regent, Philippe d'Orléans, appoints John Law as Controller General of Finances.

As Controller General, Law institutes many beneficial reforms (some of which have lasting effect, others of which are soon abolished).

He tries to break up large landholdings to benefit the peasants; he abolishes internal road and canal tolls; he encourages the building of new roads, the starting of new industries (even importing artisans but mostly by offering low-interest loans), and the revival of overseas commerce—and indeed industry increases 60% in two years, and the number of French ships engaged in export go from sixteen to three hundred.

Since, following the devastating War of the Spanish Succession, France's economy is stagnant and her national debt is crippling, Law proposes to stimulate industry by replacing gold with paper credit and then increasing the supply of credit, and to reduce the national debt by replacing it with shares in economic ventures.

Law sets up the Banque Générale Privée ("General Private Bank") in May 1716.

It is a private bank, but three quarters of the capital consists of government bills and government accepted notes.