Millionaire_ The Philanderer, Gambler, and Duelist Who Invented Modern Finance Part 2

Their destination was Italy, the birthplace of European banking. They went first to Genoa, where, according to Gray, Law was able to find "cullies [suckers] enough to pick up a great deal of Money from," and later to Rome, Florence, Turin, and Venice. In each city he visited he played the tables and worked at his research into finance. The great public banking inst.i.tutions of Italy had been born in the Middle Ages from the need to fund crusades, commerce, and war. By the late sixteenth century Venice's state banks-the Banco di Rialto and the Banco del Giro-operated much like the bank in Amsterdam, which had followed the Venetian lead, accepting deposits in adulterated coin and issuing notes in "bank money" with the guarantee of the state. Law also learned much about foreign-exchange dealing in Venice. According to Gray, "he constantly went to the Rialto at change-time [when the exchange was open], no merchant upon commission was punctualler, he observed the course of exchange all the world over, the manner of discounting bills at the bank, the vast usefulness of paper credit, how gladly people parted with their money for paper, and how the profits accrued to the proprietors from this paper."

Along with its bank, Venice had much to attract John Law and his beautiful companion. They arrived in time for the famous carnival, which began on Twelfth Night, when some thirty thousand foreigners invaded the city to enjoy a baccha.n.a.lian extravaganza of acrobatics, music, animal fights, fireworks, and dancing in the streets. According to one spectator, "Women, men and persons of all conditions disguise themselves in antique dresses, with extravagant music and a thousand gambols, traversing the streets from house to house, all places being then accessible and free to enter."

Venice was famed for s.e.x and gambling. The city dubbed "the brothel of Europe" had gambling houses, or ridotti, ridotti, "where none but n.o.blemen keep the bank, and fools lose their money." One rueful English visitor described a typical soiree: "They dismiss the gamesters when they please, and always come off winners. There are usually ten or twelve chambers on a floor with gaming-tables in them, and vast crowds of people; a profound silence is observed, and none are admitted without masks. Here you meet ladies of pleasure, and married women who under the protection of a mask enjoy all the diversions of the carnival." With Katherine at his side, Law presumably ignored s.e.xual distractions and capitalized on the plentiful opportunities for making money instead. "where none but n.o.blemen keep the bank, and fools lose their money." One rueful English visitor described a typical soiree: "They dismiss the gamesters when they please, and always come off winners. There are usually ten or twelve chambers on a floor with gaming-tables in them, and vast crowds of people; a profound silence is observed, and none are admitted without masks. Here you meet ladies of pleasure, and married women who under the protection of a mask enjoy all the diversions of the carnival." With Katherine at his side, Law presumably ignored s.e.xual distractions and capitalized on the plentiful opportunities for making money instead.

By the end of his tour of Italy, his financial expertise had opened numerous doors: the Duc de Vendome and the Duke of Savoy were among his royal friends. After ten years of economic research, he had acc.u.mulated formidable financial knowledge as well as 20,000 from gambling, moneylending, and foreign-exchange trading. Yet for all this he was dissatisfied. Perhaps ambition made moneymaking for personal gain seem no longer sufficiently satisfying. Perhaps the glamour of travel had dimmed and Katherine, tired with the discomforts of their itinerant life, was pressuring him to settle. Certainly by now his observation of banking systems in Amsterdam and Italy, coupled with what he had seen of London's financial innovations, had fired within him a grand vision: he wanted to use his understanding and ingenuity for the benefit of the populace, to play a key part in Europe's financial evolution.

Law's interest in economy was leading him, like many others of his age, to reflect on the role of the state, or of large-scale enterprise, in national prosperity. He saw money as a scientist might an array of laboratory equipment and chemicals, as substance for experiment and a subject for theory. In this sense, he was reflecting the new, enlightened age. Just as the mysteries of mathematics and nature had been explained by the researches of scientists like Newton, Huygens, and Boyle, Law's confident aim was now to use his knowledge to take on the challenge of experimenting with a nation's fortune.

Scotland, the land of his birth, he decided, was where his ideas would be unveiled. In about 1704, according to Gray, he made the long journey home, leaving Venice "with his Madam and family" to journey "through Germany down to Holland and there embark for Scotland." Throughout the voyage, worries about his past constantly intruded. In England he was still a fugitive with a death sentence hanging over him, but Scotland, although ruled by the same monarch, had a separate government and he could not be arrested there for a crime committed in London. Should union between Scotland and England take place, however-and there were many in favor of such a change-his safety would no longer be a.s.sured.

Law was tired of being on the run. After nearly ten years oftraveling he saw that unless he wanted to spend the rest of his life as a fugitive, a royal pardon was essential. The Wilson family's animosity might be defused if he compensated them generously for their loss-and he now had the money to do so. Royal a.s.sent, the other criterion for a pardon, depended on the new monarch, Queen Anne, who had succeeded to the throne after William's death. A flicker of hope grew that if he could convince her of the benefit his ideas could bring to her country, she might spare him the gallows and give him the longed-for reprieve.

On arrival in Edinburgh, Law was reunited with his mother, whom he had not seen since he left the city as a young man. What did the redoubtable Jean make of the equally determined Katherine? Did her son hide from her the true nature of the liaison? Whatever their feelings, it seems that within this settled domestic background, Law was able to work with new purpose.

He decided to tender his knowledge to the queen in the traditional way, by writing a proposal. His first work, only recently identified by scholars, was ent.i.tled "Essay on a Land Bank." In it he proposed a bank issuing paper money based on the value of land. This was a more stable basis for credit than silver, he contended, since history had shown that precious metals could fluctuate in value according to their scarcity, whereas land's value was less volatile. The idea was not entirely original: since the mid-seventeenth century numerous writers had put forward similar schemes-even Defoe felt "land is the best bottom for banks." The same idea still flourishes today in the form of savings-and-loan a.s.sociations.

Queen Anne was not impressed. Law's arguments might be ingenious and succinctly expressed, but he could not erase his past. As a convicted felon and a notorious gambler, he was a far-from-obvious candidate to trust with the nation's purse. After cursory consideration, the idea was therefore quickly rejected. The list of pet.i.tions and memorials to the queen in August 1704 recorded that Law, presently residing in Scotland, "by the intercession of friends" had managed to secure the Wilson family's agreement to annul the appeal. It continues circ.u.mspectly, "yet your pet.i.tioner is debarred from serving your majesty (as he is most desirous) in the just war wherein your majesty is now engaged," requesting royal pardon, "not only for the death of the said John [sic: it should be Edward] Wilson, but also for his breach of the said prison that he may be able to serve the queen for the rest of his life." The application is marked with the single word "rejected." In the eyes of the queen and her government, Law's financial genius would never be acknowledged.

Faced with this setback, Law did not waver in his determination. Certain that the scheme's soundness was not in question, he decided to adapt it for Scotland. Here he was confident that his influential friends, including the Duke of Argyll, who was the queen's commissioner in Scotland, would ensure a fair hearing.

Scotland desperately needed someone to cure her economic ills. At the turn of the eighteenth century the country languished in an economic nadir, with currency in short supply, trade in the doldrums, unemployment and poverty widespread. The situation was exacerbated by a financial fiasco called the Darien scheme. The brainchild of William Paterson, founder of the Bank of England, the idea had been to found a colony in Panama, which would provide a base from which cargoes would be carried across the isthmus from the Pacific to the Atlantic and back, avoiding the long, treacherous route around Cape Horn. Touting the idea as a fail-safe investment that would yield fabulous rewards and make Scotland the richest country on earth, he raised 400,000-nearly half the capital of Scotland-from optimistic private investors all eager to partic.i.p.ate. In 1698, after ejecting scores of desperate stowaways, five s.h.i.+ps set sail from Leith with 2,000 pa.s.sengers aboard, including Paterson, his wife, and his son. Three months later they dropped anchor at the settlement of New Caledonia.

The expedition was a disaster. Malaria, dysentery, and other diseases were rife; the Spanish besieged the settlement; the English refused support because they were worried about compet.i.tion with the East India Company, and, as a consequence, trade was blighted. Two years later, when the project was finally abandoned, the lives of 1,700 colonists, among them Paterson's wife and son, had been lost, numerous investors had been ruined, and the Scottish economy was in such crisis that even the survival of the Bank of Scotland, set up a year after the Bank of England, was threatened.

John Law was convinced he could rectify the situation. Within a year he had completed a 120-page pamphlet ent.i.tled Money and Trade Considered with a Proposal for Supplying the Nation with Money. Money and Trade Considered with a Proposal for Supplying the Nation with Money. It was published anonymously in 1705 by Andrew Anderson of Edinburgh, a company owned at the time by Law's aunt. A poster advertising the main points of Law's argument was prominently displayed in local meeting places. His name did not appear on the proposal, perhaps to avoid marring its chances of success with his tarnished reputation; but in circles of influence, Law's authors.h.i.+p was soon common knowledge. It was published anonymously in 1705 by Andrew Anderson of Edinburgh, a company owned at the time by Law's aunt. A poster advertising the main points of Law's argument was prominently displayed in local meeting places. His name did not appear on the proposal, perhaps to avoid marring its chances of success with his tarnished reputation; but in circles of influence, Law's authors.h.i.+p was soon common knowledge.

Economic historians still marvel at the extraordinary clarity of expression-that is, they say, remarkable for its time. Law begins by explaining the meaning of value, which he says is related to rarity rather than use. "Water is of great use, yet of little value, because the quant.i.ty of water is much greater than the demand for it. Diamonds are of little use, yet of great value, because the demand for diamonds is much greater than the quant.i.ty of them." He then looks at the meaning of money and argues that "money is not the value for for which goods are exchanged, but the value which goods are exchanged, but the value by by which they are exchanged: the use of money is to buy goods, and silver while money is of no other use." This vision of money as a functional medium-with no intrinsic value but backed by something of stable value, the gambler's chips that can be cashed in at the end of the evening-leads him to his central suggestion, for a bank with the power to issue notes using land as security. which they are exchanged: the use of money is to buy goods, and silver while money is of no other use." This vision of money as a functional medium-with no intrinsic value but backed by something of stable value, the gambler's chips that can be cashed in at the end of the evening-leads him to his central suggestion, for a bank with the power to issue notes using land as security.

To his friends the argument was convincing, and the Duke of Argyll brought it to the attention of the Scottish Parliament. At the next sitting, on June 28, 1705, the main business under consideration was the question of union between Scotland and England: in view of Scotland's economic ills, worsened by the Darien scheme, the union was now widely seen as advantageous. Law's scheme was also to be discussed, along with another proposal by the eminent Dr. Chamberlen, who was already well known in Scotland and England for his financial schemes.

Despite Law's hopes, the past weighed heavily against him, and his proposal sparked an explosive response. William Greg, an agent working for the English government who watched proceedings, was highly dismissive of Law, "a gentleman who of all men living once was thought to have the worst turned head that way," and wrote off the pamphlet as the "homespun" proposal of a "rake." Two days later, when Parliament again convened to discuss the two schemes, Law became ensnared in the complexities of Scottish politics.

One of the parliamentary factions, the Squadrone Volante, opted to support him, but he was fiercely opposed by the national party, headed by Andrew Fletcher of Saltoun. George Baillie of Jerviswood, a member of the Squadrone, proposed Law's scheme, "in his opinion, a more rational and practicable scheme than that of Dr. Chamberlen." Few agreed. Fletcher, an irascible man, scornfully retorted that he thought it "a contrivance to enslave the nation" and demanded that the two men be brought before Parliament to reason and debate the matter openly.

Rus.h.i.+ng to Law's defense, the Earl of Roxburghe, also of the Squadrone, declared he did not see why Law, who had spent "some considerable time purely to serve his country," should be forced to appear against his will; he should be treated "with good manners if not encouragement." According to one witness, Fletcher was so furious at what he took to be an accusation of ill manners that had he been near Roxburghe "they would have gone together by the ears."

Argyll, who was presiding over the meeting, ordered that Fletcher and Roxburghe be confined in their chambers to avoid the row continuing after the debate. Roxburghe, "mannerly and respectful," allowed himself to be arrested. Fletcher, who famously boasted "that he never made his court to any king or commissioner," proved more elusive. Surrept.i.tiously leaving the house, he made his way to a nearby tavern and sent a challenge to Roxburghe to meet him at Leith, a popular spot for duels.

With Baillie as his second, Roxburghe talked himself out of confinement, responded to Fletcher's challenge, and rushed to Leith at six in the evening. Before the two men could draw swords, Baillie intervened. The fight would not be fair, he said. His lords.h.i.+p had "a great weakness in his right leg so that he could hardly stand, 'twas not to be expected that this quarrel could be decided by the sword." Fletcher had foreseen such an objection, produced a pair of pistols, and offered them to Roxburghe to take his choice. Baillie again objected that his lords.h.i.+p's weakness would "equally disable him from firing on foot." Meanwhile, in the distance a party of mounted constabulary was spotted-both men were still supposed to be under arrest. The seconds immediately fired their pistols in the air and everyone returned to Edinburgh.

The ludicrous quarrel did nothing to help Law. His scheme, though interesting enough for William Greg secretly to dispatch a copy south to his superiors (London was already watching the progress of John Law), was d.a.m.ningly rejected for being "too chimerical to be put in practice." And while the wranglings dragged on, union drew ever closer. Law, reluctant to leave his homeland and still optimistic of securing a royal pardon, again lodged an appeal for clemency. His pet.i.tion reiterated his intention to work for "the ease and honour of the government and the good and prosperity of his country." Again he was turned down.

Exile was now the only way to avoid imprisonment. As Katherine made preparations to depart, Law pa.s.sed his final days on Scottish soil at the gaming tables. Among his recorded successes was an estate worth 1,200 (US$1,800) won from Sir Andrew Ramsay, "one of the finest Gentlemen of his time," who after his encounter with Law had only 100 (US$160) left.

The earliest known likeness of John Law, a miniature in the Earl of Derby's collection, dates from around this time. The image shows a dreamy young man in a short wig with Madonna-like oval face, heavy-lidded eyes, long hawkish broken nose, and generous mouth. His expression of poker-faced calm calls to mind his contemporary du Hautchamp's description of him playing cards, "a serene temper without transport [that] made him master of himself when fortune ran against or for him, so he generally came a gainer, seldom a considerable loser." Perhaps Law gave the miniature to his mother on his departure. He was never to see her again; she died two years later. For the time being, however, such sorrow was far from his thoughts. Finding some way of putting his schemes into action was now his overriding aim; his resolve had never been greater.

7.

THE R ROOT OF A ALL E EVIL.

In his travels he learnt that in Betica everything shone with gold, which made him hurry to get there. He was made very unwelcome by Saturn, who was then on the throne, but once the G.o.d had departed from the earth he had an idea, and went out to every street-corner where he continually shouted in a hoa.r.s.e voice: "Citizens of Betica, you think yourselves rich because you have silver and gold. Your delusion is pitiable. Take my advice: leave the land of worthless metal and enter the realms of imaginations, and I promise you such riches that you will be astonished."

Montesquieu, Persian Letters (1721)

LATE IN 1705, L 1705, LAW AND HIS FAMILY RETURNED TO A continent riven by conflict. The War of the Spanish Succession pitched the armies of France and Spain against an alliance of England, Holland, and the Holy Roman Empire. A year earlier, at the Battle of Blenheim, the English general Sir John Churchill, later Duke of Marlborough, had vanquished the French, killing, wounding, and imprisoning almost three-quarters of their army, some forty thousand men. That year the British captured Gibraltar and allowed their s.h.i.+ps to sail into the Mediterranean "like swans on the river." Over the following months the allies triumphed also at Ramillies, Barcelona, and Turin. As if to underline France's waning fortunes, a total solar eclipse on May 11, 1706 signaled that seemingly even G.o.d had deserted the Sun King. continent riven by conflict. The War of the Spanish Succession pitched the armies of France and Spain against an alliance of England, Holland, and the Holy Roman Empire. A year earlier, at the Battle of Blenheim, the English general Sir John Churchill, later Duke of Marlborough, had vanquished the French, killing, wounding, and imprisoning almost three-quarters of their army, some forty thousand men. That year the British captured Gibraltar and allowed their s.h.i.+ps to sail into the Mediterranean "like swans on the river." Over the following months the allies triumphed also at Ramillies, Barcelona, and Turin. As if to underline France's waning fortunes, a total solar eclipse on May 11, 1706 signaled that seemingly even G.o.d had deserted the Sun King.

Amid the unfolding political drama, the Laws based themselves in The Hague to await the birth of their first child. John Law hankered to make his next move, and the difficulty of traveling in war-torn Europe must have worried him, since he needed free pa.s.sage to be able to sell his schemes. Over the next nine years, however, he crossed enemy lines with apparent ease, ignoring the usual formalities if necessary, reaching the enemy heartland of Paris several times, as well as visiting Vienna, Turin, Milan, Brussels, and Utrecht.

Soon after the birth of their baby, a boy they named John, the Laws visited Vienna. Here, according to du Hautchamp, "he proposed his system to the Emperor, and although he was unsuccessful he did not leave without playing heavily and making large winnings." Law did not shed many tears over his failure. By now he had focused his sights on Europe's largest, most populous, but most severely impoverished nation: France.

Superficially France seemed hardly to have changed for the past half century. Louis XIV had reigned for sixty-three years, during which he had raised his country to commercial heights that made it the envy of Europe, then ruined it with his penchant for military aggression, religious intolerance, and unrivaled extravagance. Lack of money lay at the root of all France's evils. In the countryside the impoverished ma.s.ses lived in abject misery, unshod, dressed in rags, forced to scavenge to survive. During severe famines in 1694 and again in 1709, following the worst winter in living memory, the poor made flour from ferns and gra.s.s stalks or roots such as asphodel. Children lived on "boiled gra.s.s and roots" and, according to one account, "crop the fields like sheep," while the Princess Palatine, sister-in-law of Louis XIV, wrote, "The famine is so terrible that children have devoured each other." A fortunate few could barter: a cabbage for a bag of corn, two pigs for a cow, and so on. In Versailles it was not so easy. In a feverish bid to pay for his army and feed his people, the king had to resort to sending his gargantuan golden dinner services and silver furniture to the mint to be melted down for currency. Now he ate off enamel or faience pottery, and his entourage was expected to follow suit.

Various vain attempts had been made to replenish the treasury. Additional venal offices were created and each position, mostly entirely spurious, sold off to the highest bidder. Interest-bearing paper credit notes called billets de monnaie billets de monnaie had been offered in return for coins and were later converted into government bonds. New taxes were introduced, old ones raised-there were so many taxes that it was feared even marriages and births would be taxed. The coinage was constantly tampered with. Between 1690 and 1715 the currency was revalued forty times to make the limited gold and silver available stretch further. had been offered in return for coins and were later converted into government bonds. New taxes were introduced, old ones raised-there were so many taxes that it was feared even marriages and births would be taxed. The coinage was constantly tampered with. Between 1690 and 1715 the currency was revalued forty times to make the limited gold and silver available stretch further.

But the situation did not improve. By 1715 France would be over 2 billion livres in debt, largely to a group of forty private financiers, who also controlled the collection of taxes. The government could not afford the interest repayments on its notes, let alone repay them in coin. They had become so discredited that when Louis wanted to raise a loan of 8 million livres in coin from one of the financiers of Paris he had to pay 32 million in notes. In the provinces few could afford the taxes; people even resorted to marrying or baptizing their children without a priest to avoid the extra levy they felt might soon be demanded.

Law knew he had the answer. The problems of the country, he promised, all stemmed from a lack of available money. "Trade and money," he had written in Scotland, "depend mutually on one another; when trade decays money lessens; and when money lessens, trade decays." The only way out of the downward spiral was through credit and by increasing the circulating money. Since there was a shortage of gold and silver in the country, the answer was to establish a national bank and issue money made from paper.

It was a beguilingly simple solution. The hard part was getting through to the king. In November 1706 Law managed a journey to Paris, where he submitted a four-part memorandum to Chamillard, Louis XIV's incompetent and overworked controller general, who headed the ministries of finance and war. Law tried to keep his argument brief and to the point. "I know," he wrote, "that these proposals are long and boring, because it is necessary to explain many aspects of money . . . what I will present will be shorter and easier to follow, I will attempt to include nothing that is spurious." The hara.s.sed Chamillard tried to appear diligent, scribbling annotations in the margin. In truth he did not understand and only laughed at Law's vision. The king was never told of the proposal, and without his approval Law reached an impa.s.se. "Apparently the opinion is that what I propose does not merit discussion at the council. I am not surprised: a new type of money more suitable than silver seems impossible," he wrote disconsolately. But the visit was not entirely wasted. During his stay in Paris he met the king's nephew Philippe, Duc d'Orleans.

The two men had much in common. They were of similar age-Law was just three years Orleans's senior, aged thirty-six in 1707-both were handsome, athletically built, and brilliant tennis players. Both enjoyed extraordinary success with the opposite s.e.x. Orleans could outstrip even Law in his s.e.xual conquests, although power and position were on his side. His numerous mistresses, whether stars of the opera, actresses from the Comedie Francaise, serving girls, daughters of diplomats, or, more rarely, aristocrats, were selected for good humor, voracious appet.i.tes for banqueting, drinking, and lovemaking, and lack of interest in politics. Looks mattered little-even the duc's mother remarked wryly, "They do not have to be beautiful. I have often reproached him for choosing such ugly ones." At night, in his Paris residence, the Palais Royal, he dismissed his servants and held soupers, soupers, notorious all-night revelries at which an eclectic a.s.sortment of courtesans, actresses, and his inner circle of dissolute male friends-the notorious all-night revelries at which an eclectic a.s.sortment of courtesans, actresses, and his inner circle of dissolute male friends-the roues roues-gorged, drank to excess, and, according to Saint-Simon, "said vile things at the tops of their voices." It was, said Saint-Simon, a ritual that "when they had made a vast deal of noise and were dead drunk they went to bed and began it all over again the next day." Meanwhile they stimulated enough gossip to entertain the rest of Paris.

But Orleans was far more than just another debauched aristocrat. A mult.i.talented man of abundant if mercurial intellect, he was a freethinker who was fascinated by developments in music, literature, philosophy, and science, including the science of money. Chemistry enthralled him, and he pa.s.sed long hours experimenting in his private laboratory alongside the eminent Dutch chemist Wilhelm Homberg. He was intrigued by necromancy; his penchant for conjuring spells and summoning spirits late into the night elicited much criticism in court circles. He was also a connoisseur of art. He learned to paint with the famous decorative painter Antoine Coypel-who decorated the ceiling in the Palais Royal-and festooned the walls of his home with masterpieces by Raphael, t.i.tian, Rembrandt, Veronese, Caravaggio, and leading French artists. He patronized writers and poets, composed operas, and played the flute. Yet for all his abundant gifts and interests Orleans was frustrated. Louis XIV distrusted him and had consistently denied him a fulfilling role. His dissipation was largely inspired by boredom. Underneath the louche exterior, like Law, he was an idealist who longed for change.

Law willingly spent long hours explaining his ideas and in Orleans found someone with the intellect and vision to understand. Perhaps also Orleans's regard for Law was strengthened by secret admiration for his life of opportunistic adventure, a world away from the protocol and formality of the French court. Both men were fast thinkers and witty talkers, and with mutual intellectual respect, personal affection grew.

Encouraged by his royal friend, Law optimistically revised his proposal and resubmitted it to the king. But for all Orleans's help and Law's high hopes, Louis eyed it icily. This time, according to Orleans's mother, the Princess Palatine, the stumbling block was not the scheme's complexities but the author's religion. Law was a non-Catholic and therefore, to Louis, inherently untrustworthy. Police superintendent d'Argenson was instructed to hasten Law's departure.

Law did not give up hope. He based himself in Holland, from where he continued the roving quest for a ruler willing to listen. The nomadic life was arduous for Katherine, with a baby to care for, but the relations.h.i.+p does not seem to have suffered. On the contrary, it seems likely that the fort.i.tude and loyalty she later displayed resulted from the closeness that developed during this extended period of rootlessness. In unfamiliar environments, and during long journeys across Europe, she and Law spent much time together and relied on each other for companions.h.i.+p. At each new city, Katherine's dignified bearing worked in Law's favor, for political advancement depended upon social success as much as worthy ideas. Her glamour, allied to his charm, helped forge the alliances on which his career depended.

In the spring of 1710 he was in Italy, accompanied as usual by Katherine, who was pregnant. Their second child, Mary Katherine, whom Law called Kate, was born in Genoa. In Turin, Law presented a scheme for a bank similar to the Bank of England to Victor Amadeus, Duke of Savoy, whose domain was in dire need of cash after the siege of the city. The duke, a great admirer of Law, liked his scheme, and Law's spirits rose. As he waited to be given the go-ahead, he involved himself in speculative dealings and currency trades so successfully that a year later he was able to open a bank account in Amsterdam with a deposit of 100,000 (US$160,000).

But as the months pa.s.sed, it became obvious that Victor Amadeus's support did not mark the turning point for which Law had hoped. The duke's ministers were stubbornly conservative, and eventually, after lengthy arguments, Victor Amadeus was forced to reject Law's idea with the lame explanation that his dominions "were too small for the execution of so great a design." He added that "France was the proper theatre for its performance, if I know the disposition of the people of that kingdom I am sure they will relish your schemes." Law agreed, but knew that with the present administration intact, there too the door was closed.

Even in exile John Law's success gripped the English authorities. By now he had decided that his ambitions would be helped if he presented himself to the world as a man of substance. In the spring of 1712 he left Italy to return to The Hague, "the handsomest, the most fas.h.i.+onable and the most modern looking town in the Netherlands," according to one writer of the time. He invested his winnings in a grand residence and filled it with paintings and works of art. Lavish living on such a scale brought instant acclaim. With Katherine happily playing the role of society hostess, numerous visitors came to call. Everyone wanted to know exactly how his fortune had been made. In April 1713, the diplomat John Drummond wrote to the Earl of Oxford from Utrecht mentioning "a famous man in this country. . . . This Mr. Law has picked up in Italy a great estate, some say by army undertakings at Genoa, and some say partly by gaming. . . . I should be sorry to see him settle at The Hague, where he has bought a fine house, seeing he is rich, and can be very useful . . . the service he may be able to do his country really deserves his pardon." Law enjoyed his reputation as a man of mystery and did nothing to discourage the gossip. He was as convivial and charismatic as ever: "He is really admired by all who know him here . . . and I should always wish the Queen's subjects of such good estates and sense established at home," wrote Drummond.

He was still adding to his substantial fortune. According to Gray, the Dutch were renowned as "a very close wary people, but will give in to anything where there is any prospect of Gain." Law, said Gray, seized the opportunity to introduce them to the delights of a national lottery, based on the one his old friend Neale had set up in London but "improved" to his own advantage. In Rotterdam Law's ploy was discovered: he had "calculated these lotteries entirely to his own benefit, and to the prejudice of the People, having got about 200,000 guilders by them." He was asked to leave the country. Recent research suggests, however, that Law was in fact operating a form of insurance scheme offering investors a way of reducing their losses should all their tickets lose: for a fee of 100 guilders, investors could lodge ten tickets with Law, and claim three times the sum if all ten lost. Later the scheme was modified so that the price dropped but all winnings over a certain level were payable to Law, who was employing his understanding of risk to his own profit, in much the same way as he did in games of chance. Such ventures were highly lucrative; two years later his fortune was said to have grown to $800,000.

In France, meanwhile, his luck had begun to turn. The signing of the peace of Utrecht in April 1713 had brought the long war to a close. Louis XIV, now seventy-five and still in remarkably robust health, brooded over the ruins of his kingdom. His sense of loss was compounded by a tragic sequence of events that had transformed the French succession. In the s.p.a.ce of three years, three heirs-his son the Dauphin, his grandson the Duc de Bourgogne, and his great-grandson the Duc de Bretagne-had died. The heir to the throne was now Louis's second great-grandson, a four-year-old child, and Law's ally, the Duc d'Orleans, stood in line as regent.

Louis's sorrow promised opportunity for Law. More than ever France needed an answer to her financial problems. Sensing that the king's contempt for him might now have mellowed, Law returned to Paris. On Christmas Eve he wrote to Nicolas Desmarets, Louis's new finance minister, begging for an audience "to discuss matters, which I trust will be agreeable, being for the service of the King and the well-being of his subjects." Orleans's support was beginning to work in Law's favor, and his request was received slightly more favorably. Desmarets scribbled a note to his clerk, "when he comes I will speak to him," at the top of Law's letter. But either the office was inefficient and no word was sent to Law, or some of the old distrust lingered and Desmarets dragged his feet. Nearly a fortnight later, having heard nothing, Law wrote again, this time more impatiently: "On 24 December I took the liberty of writing to your lords.h.i.+p to beg you to allow me a private audience to discuss the service of His Majesty. As my business affairs oblige me to leave shortly I would like to know if this honour will be granted." Again the honor was not granted, but Law was still convinced that a breakthrough was close. He returned to The Hague to prepare to move his family to France.

By May 1714 he was back in Paris, still denied the formal audience to make his presentation. He wrote confidently, "You had the goodness to say you would let me know when you had time to give me an audience. I await your orders." Katherine, meanwhile, was in The Hague supervising the packing of furnis.h.i.+ngs and personal effects, a formidable task, with their extensive collection of art and furniture. They suffered a setback when they were held up by French customs officials at Rouen. Law wrote to Desmarets, confidently requesting the a.s.sistance he felt was due to a man who would soon be playing a key role in French affairs: "Several chests and crates with the valuables and furnis.h.i.+ngs that I used during my stay there are being dispatched from Holland. As among these there are some crockery and other fragile objects that will be easily damaged if they are opened en route en route and as I have no one to look after them, I am taking the liberty of begging your lords.h.i.+p to grant permission for them to pa.s.s through Rouen without being opened, and that they can be examined when they arrive at my house." Desmarets was not unsympathetic, but neither would he allow Law to ignore the usual formalities. He gave instructions that Law should be told "that I can't arrange a visit at his home . . . this is only usual for amba.s.sadors . . . but if he likes I will send an order to have the chests and crates sent to the customs in Paris, where they can be opened in front of him." and as I have no one to look after them, I am taking the liberty of begging your lords.h.i.+p to grant permission for them to pa.s.s through Rouen without being opened, and that they can be examined when they arrive at my house." Desmarets was not unsympathetic, but neither would he allow Law to ignore the usual formalities. He gave instructions that Law should be told "that I can't arrange a visit at his home . . . this is only usual for amba.s.sadors . . . but if he likes I will send an order to have the chests and crates sent to the customs in Paris, where they can be opened in front of him."

A month or two later the Law family were comfortably settled in their new residence, a mansion staffed with "a sizeable retinue of servants," in the Place Vendome (then known as the Place Louis le Grand), one of Paris's newest and most fas.h.i.+onable squares, where many of the capital's most powerful financiers lived. The move had been noticed by d'Argenson, who remained extremely wary of Law and alerted foreign minister Torcy: "A Scot named Law, gambler by profession and suspected of evil intentions towards the King appears at Paris in high style and has even bought an impressive home in the Place Louis le Grand, although no one knows of any resource except fortune in gambling, which is his whole profession. I cannot believe that the motives which have aroused just suspicions against him have ended with the peace." Torcy, however, must have caught wind of the s.h.i.+ft in the establishment's regard for him and scribbled on the letter, "He is not suspect. One can leave him in peace."

The move had just been completed during the summer of 1714 when Queen Anne died. Still hankering for a role in England, Law immediately lobbied an old Scottish friend, John Dalrymple, second Earl of Stair, the recently appointed British amba.s.sador to France, to bring his case to the attention of the new king, George I. The son of the disgraced earl held responsible for the ma.s.sacre at Glencoe, Stair shared the youthful Law's pa.s.sion for gambling and high living; he may have met Law over the tables in Edinburgh or London. When Stair arrived in Paris in January 1715, Law was the first person he visited.

The encounter left him deeply impressed. Now forty-three, Law had retained his good looks and athletic physique, but his youthful appet.i.te for self-indulgence had been replaced by lofty ambition. Stair was dazzled by Law's grasp of finance and his ability to explain complex subjects lucidly. He had little hesitation in taking up Law's case and wrote to the statesman and secretary of state in England, James Stanhope, to recommend Law as "a man of very good sense, and who has a head fit for calculations of all kinds to an extent beyond anybody." He was, said Stair, "certainly the cleverest man that is," who might be "useful in devising some plan for paying off the national debts." Stair also recommended Law to Lord Halifax at the Treasury. Halifax, who had met Law in The Hague and seen the proposal he had written in Scotland, needed little convincing of Law's talent: "I have a great esteem for his abilities, and am extreme fond of having his a.s.sistance in the Revenue," he said. But his good opinion was not enough. Later he wrote, "There appears some difficulty in his case, and in the way of having him brought over. If your lords.h.i.+p can suggest anything to me that can ease this matter, I should be very glad to receive it." Stanhope's reply to Stair confirmed the objections: "I did not fail to lay it before the king," he wrote. "I am now to tell your lords.h.i.+p that I find a disposition to comply with what your lords.h.i.+p proposes, though at the same time it has met, and does meet, with opposition, and I believe it will be no hard matter for him [Law] to guess from whence it proceeds." According to Law, Stanhope was furious that the pet.i.tion was turned down, and "speaking to the King on my subject said that England's debts during two wars were 50 million, but that she had lost more in the form of one of her subjects the day that I engaged myself in the affairs of France." Twenty years on, the ghost of Wilson still hindered Law's rise.

He did not waste time lamenting. Having resolved instead to prove to England what she had lost by his success in France, in May he made the long-awaited proposal to Desmarets for a state bank issuing paper money against deposits. But Desmarets, still distrustful, strung him along in a state of constant suspense, demanding endless explanations, pointing out pitfalls. In early summer, perhaps worn out with frustration, Law fell ill and was not sufficiently strong to revise his scheme again until July. By then word of it had filtered to Paris financiers, who, fearing that their profits would suffer, noisily voiced their opposition. A state bank of issue would never work, said Samuel Bernard, one of the wealthiest of the financiers, "in a country where everything depends on the King's pleasure." Faced with yet more hostility Law remained cool and surprisingly optimistic. But Desmarets, still playing for time, raised more queries. How soon could Law begin? What guarantees would he offer? How would it be administered? Patiently Law answered every question. He was ready to open the bank on August 10 or even earlier if he could. He was so sure it would succeed he would put up 500,000 livres of his own money as guarantee. In this grand new inst.i.tution Desmarets should certainly hold an official role. Eventually, in early August, Law's persistence paid off. Desmarets approved. There remained only the king to convince.

Louis was enjoying a quiet summer at his summer residence at Marly. On August 10, the day on which Law hoped to open the state bank, the king's health suddenly deteriorated. According to contemporary reports, discolored blotches on his leg enlarged and the doctors, fearing gangrene, tried magical elixirs, multiple incisions, and swathing it in brandy-soaked bandages. But he was beyond help. On Sunday, September 1, 1715, at a quarter to nine in the morning, having reigned for seventy-two years, Louis XIV, France's most glorious king, died.

Orleans, like most of France, spent little time grieving. The day after Louis's death he made a compelling address to the Parlement in which he coerced the representatives to reject the right of a council of n.o.blemen and the Duc de Maine to a.s.sist him in his regency, a scheme of joint rule laid out by Louis to restrain Orleans's power. He emerged triumphant. Until the five-year-old Dauphin came of age, Orleans would rule France as regent. For John Law, the opportunity of which he had long dreamed had never seemed so close.

8.

THE BANK.

Your Royal Highness will have no difficulty in reaping success from what I have the honour of proposing, the best actor is not the one with the largest role, but the one who acts the best. I know my strengths and I love pleasure too much to occupy myself in affairs that I do not understand in depth. My ideas are simple, the principles on which I have worked them out are true, and the conclusions I draw from them are correct.

Letter from John Law to the Regent, December 1715

AT THE B BANQUE G GeNeRALE THE Ma.s.sIVE DOUBLE DOORS to the rue St. Avoye stood open. Inside, a handful of clients conversed idly in the vestibule before drifting toward the to the rue St. Avoye stood open. Inside, a handful of clients conversed idly in the vestibule before drifting toward the grande salle grande salle to conduct their business. It was late summer 1716 and, as usual, the bank was quiet. to conduct their business. It was late summer 1716 and, as usual, the bank was quiet.

Later that morning a carriage arrived that was far from ordinary or expected. A few customers glimpsed it slowing to turn into the narrow, arched entrance to the street. They must have recognized the livery of the coachman and the servants inside as that of the Duc d'Orleans. The servants got out carrying metal-bound coffers, which they took into the bank and placed on the counter. Then an equerry stepped forward to unlock them. Inside each chest was a ma.s.s of gold louis d'or and silver ecus, which the regent wished to entrust to the bank. The total value was a million livres.

The bank's other customers were transfixed. For the regent to invest such a sum in a bank that was at present the subject of mockery in many quarters was astonis.h.i.+ng and significant. They did not know that the regent and the bank's director John Law had contrived that the deposit be made as conspicuously as possible: public awe was precisely the effect for which they strove. It would boost confidence in the ailing bank and its paper banknotes.

The ploy worked. Within days the press had reported that the regent had such faith in John Law's new bank that he had deposited a million livres in its vaults. The previously hostile Gazette de la Regence, Gazette de la Regence, which had predicted "[Law's] bank will not succeed" and "no one talks of Mr. Law's bank except to joke about it," now remarked on "an order the other day from the mint to send a million to M. Law's bank, that the Regent supports and is really his bank under the name of this Englishman. Everyone believes that it will hold up because royal funds are going in to it." Royal patronage, as John Law was only too aware, was the most potent of marketing tools. which had predicted "[Law's] bank will not succeed" and "no one talks of Mr. Law's bank except to joke about it," now remarked on "an order the other day from the mint to send a million to M. Law's bank, that the Regent supports and is really his bank under the name of this Englishman. Everyone believes that it will hold up because royal funds are going in to it." Royal patronage, as John Law was only too aware, was the most potent of marketing tools.

Yet after Louis XIV's death, Law had been disappointed by the protracted process of establis.h.i.+ng his bank. On his accession as regent, Orleans had dismissed Desmarets and, in line with his new system of government by aristocratic councils, made the Duc de Noailles head of the finance council. Noailles was energetic, shrewd, and ambitious but indecisive and innately distrustful of anyone who might threaten his position. Louis de Rouvray Saint-Simon, a French writer, courtier, member of the Regency Council, and friend of the regent, whose forty-one volumes of memoirs provide a fascinating insight into the key personalities and events of the time, observed that "in spite of his intellect, the mult.i.tude and mobility of his ideas and views, which successively chased each other off either wholly or in part, made him incapable of concluding any work of his own; neither was he ever satisfied with work done for him." He was a hard and insidious taskmaster, and when the regent introduced Law as someone whose ideas were worth considering, Noailles was instantly suspicious. He nodded and muttered superficial encouragements but inwardly viewed Law as "an intruder put by the hand of the Regent into their administration" and hence, according to Saint-Simon, "long bandied [him] from pillar to post."

Noailles found France's financial crisis far worse than anyone had imagined. The country's debts, estimated at over 2 billion livres, incurred interest repayments of 90 million; the tax system that should have covered the repayments of interest on the debt was so staggeringly inefficient and riven with corruption that the income was swallowed up three or four years in advance. Having studied the books, Noailles summed up the monetary mora.s.s: "We found the estate of our Crown given up, the revenues of the state practically annihilated by an infinity of charges and settlements, ordinary taxation eaten up in advance, arrears of all kinds acc.u.mulated through the years, a mult.i.tude of notes, ordinances, and allocations antic.i.p.ated of so many different kinds which mount up to such considerable sums that one can hardly calculate them."

Some advisers suggested that France should simply declare herself bankrupt and start again. Law convinced Orleans that to do so would pitch the country into even worse distress. He had a better way. In October, bubbling with enthusiasm, he proffered his newest proposal to the regent: a plan for a state bank administered in the king's name that would handle all revenues and issue paper money backed by coins. "The convenience will be such that everyone will be charmed to have these bank bills rather than money, because of the facility of making payments in paper, and the certainty of receiving the value whenever they wish."

While Orleans pondered the scheme, Law lobbied the regent's closest advisers for support. A brave few murmured wary encouragement, among them the Duc d'Antin, who said he was "struck by his ideas, they appeared to merit a most detailed attention." At the end of the month the scheme was formally put to the council and a panel of thirteen of Paris's most ill.u.s.trious bankers and financiers. But still Law's star failed to rise. Members of the business community remained scornful and distrustful, their criticisms concealing their underlying concern that if a state bank was allowed to open its doors, it would be at great cost to them. Nine of the thirteen voted against it. Noailles, defensive and resentful of Law's effortless influence with the regent, also thwarted him. As Law waited, naively expecting to be told to proceed, his betrayal took place behind the closed doors of the council chamber.

Confronted by the ma.s.sed hostility of the business community as well as his own advisers, Orleans concluded, regretfully, that he could not afford to back such a controversial scheme and risk upsetting so many at this delicate early stage of his regency. For the time being the scheme would have to be sacrificed. He made his closing p.r.o.nouncement ceremoniously. "He had come there persuaded that the bank ought to be established; but, after the opinions he had just heard, he agreed wholly with that of M. le duc de Noailles; and it would be announced to everyone that same day that the bank would not be carried out."

Law's p.r.i.c.kly response to the regent's abandonment hid profound disillusionment. Banks were by now accepted in every prosperous country. How could anyone question their usefulness? he raged. The regent, all too well aware of the truth of this, and probably lamenting his volte-face volte-face even as he made it, dreaded that Law might return to his wandering, gambling life, or worse still, take his expertise elsewhere. While Law brooded in his Paris mansion, the regent ordered Noailles to pacify him. Law said later that Noailles made a few vague promises on the regent's behalf, and that "I could still be useful to the state, and he hoped that this rejection would not make me want to leave France, that he wished to make my stay a pleasant one in every way he could, and that it was even the opinion of the council that he should engage me to stay, being able to be useful with the knowledge that I have." Still bristling, Law retorted, "I have need of nothing having enough to live with ease, that my intention in proposing to serve His Royal Highness was to make myself useful to the state and not augment my own good. The truth of this was obvious by the nature of my proposition." But as the regent had hoped, Law simmered down, secretly flattered by all the attention. "I would not have even thought of making a second proposition if he had not pressed me to do so," he later wrote, with manifest self-righteousness. even as he made it, dreaded that Law might return to his wandering, gambling life, or worse still, take his expertise elsewhere. While Law brooded in his Paris mansion, the regent ordered Noailles to pacify him. Law said later that Noailles made a few vague promises on the regent's behalf, and that "I could still be useful to the state, and he hoped that this rejection would not make me want to leave France, that he wished to make my stay a pleasant one in every way he could, and that it was even the opinion of the council that he should engage me to stay, being able to be useful with the knowledge that I have." Still bristling, Law retorted, "I have need of nothing having enough to live with ease, that my intention in proposing to serve His Royal Highness was to make myself useful to the state and not augment my own good. The truth of this was obvious by the nature of my proposition." But as the regent had hoped, Law simmered down, secretly flattered by all the attention. "I would not have even thought of making a second proposition if he had not pressed me to do so," he later wrote, with manifest self-righteousness.

In fact, the fire burning in Law was unlikely ever to have been extinguished by the rejection of a single council: he had been dreaming for far too long to give up. Yet again, he told himself, it was merely a matter of modifying his ideas, and waiting. If the regent was uneasy with the idea of a state bank, Law reasoned now that the answer must lie in a private scheme.

The revised plan that emerged was for a privately run bank, similar to the Bank of England, issuing banknotes and financed by shareholders. Throughout a winter so cold that, according to the Princess Palatine, the regent's mother, even the sea at Calais froze, Law briefed Orleans with renewed enthusiasm in conferences held at the Palais Royal and at Marly. In December he equated the introduction of credit with the discovery of the Indies, remarking that "if Spain had ceded the Indies [he meant the Spanish Americas] to the English, they would not have profited as much from them as they have from the use of credit . . . My banking project . . . will not bring the least prejudice to the King nor to the people; it is the quickest, safest and most harmless method of restoring the good faith and confidence of commerce; it is the true foundation of power in a state and the way by which one must begin to establish order." When Law talked like this, money became the stuff of dreams, a magical cure-all, the embodiment of universal happiness rather than of sordid temptation. Orleans was captivated.

While the regent and Law were closeted together, it was left to Noailles to initiate more painful methods of improving the country's finances. A year earlier, he had instigated the Visa, a drastic form of financial surgery, by which large swaths of royal debt were amputated. Long-term debt, which had largely financed Louis's wars, mostly took the form of annuity bonds sold by Paris's city government, the Hotel de Ville, to financiers and other private investors. The bonds paid a set interest rate that was covered traditionally by an agreed source of government revenue. One of Noailles's money-saving measures was to reduce the interest on bonds from 7 percent to 4 percent. He also converted the various forms of short-term debt into billets d'etats, billets d'etats, state notes worth only two-thirds of their former value. He cut salaries and pensions, and revalued the coinage at 50 percent of its previous worth. state notes worth only two-thirds of their former value. He cut salaries and pensions, and revalued the coinage at 50 percent of its previous worth.

In systems of currency based on the value of gold and silver, especially in France, adjusting the value of the coinage was a frequent royal scam. The French monetary system was based on the livre tournois, a unit of account (like the pound sterling in England) used to express prices, contracts, and wages, for which there was no single coin, and against which the value of gold and silver coins could be adjusted. French coins included the gold louis d'or and the silver ecu, equivalent in England to the gold guinea and the silver s.h.i.+lling. In this case, Noailles raised the value of the louis d'or, stating that its value would increase from fourteen to twenty livres (and the ecu from three livres ten sous to five livres), thus effectively devaluing the livre. This was an inflationary measure that would cause prices to rise, even though it reduced the value of the state's debt by diminis.h.i.+ng the amount of coins needed to repay it. Revaluations worked by demanding that the public bring all their coins to the mint either for endors.e.m.e.nt with a new stamp, representing the increased value, or by reminting lighter coins with a higher valuation against the livre. In both cases the state appropriated part of the bullion in the process of stamping or reminting it, but concealed it against the adjustments in value. The public, well aware that the Crown was profiting from such transactions, was understandably reluctant to hand over coins and see them altered in this manner, hence the tendency to h.o.a.rd them, adulterate them, or smuggle them abroad and sell them as bullion.

Noailles's measures made the balance sheet look better but plunged the nation into further financial distress. By encouraging people to send coins abroad, they worsened the shortage; by reducing interest payments and the value of government securities, they forced people to sell to maintain a level of income and the market price plummeted 80 percent. Businesses already foundering from a shortage of money fell deeper into debt and shopkeepers closed their doors-how could they agree to buy or sell something when they were unsure from one day to the next what the livre would be worth? Hundreds were bankrupted, which led in turn to ma.s.s unemployment. Many had no option but to turn to crime. The Gazette de la Regence Gazette de la Regence recorded the climate of wretchedness: "It is not possible to express the misery of the provinces. The countryside is full of robbers; we dare not go out of the towns for fear of robberies which happen every night . . . nowhere else is there a country like it, and if the King does not pay we run the risk of a revolt. There are several officers who went charitably to dinner with some capuchins and even the capuchins made a collection for them. It is utter desolation." Not only was the entire country foundering in an economic abyss, the very fabric of society was threatened. recorded the climate of wretchedness: "It is not possible to express the misery of the provinces. The countryside is full of robbers; we dare not go out of the towns for fear of robberies which happen every night . . . nowhere else is there a country like it, and if the King does not pay we run the risk of a revolt. There are several officers who went charitably to dinner with some capuchins and even the capuchins made a collection for them. It is utter desolation." Not only was the entire country foundering in an economic abyss, the very fabric of society was threatened.

Then Noailles instigated his most drastic remedy yet. In March 1716, a so-called Chamber of Justice was charged to investigate and call to account the financiers, tax collectors, and other officials who, it was felt, had profited unlawfully and on a vast scale from France's economic distress. To a.s.sist the courts in their quest, people were tempted to inform with the bait of a fifth of any recovered money or property. Treachery ensued on an unparalleled scale. Disgruntled servants betrayed their employers, wives and mistresses whispered of their lovers' financial misdemeanors, children cited their parents' transgressions, and fearful of being reported, anyone who had coins h.o.a.rded them, unwittingly worsening the monetary shortage. People who panicked and tried to flee the country found that innkeepers and postmasters had been ordered to refuse horses to anyone they suspected of evading justice. Some turned back, admitted their crime, and relinquished properties or large sums of money to avoid the rack or the pillory. Others committed suicide rather than subject themselves to the horrors of investigation.

The Chamber of Justice was installed, somewhat inappropriately, in the convent of the Grands Augustins, and a sinister torture chamber was set up next door. Many successfully bribed their way out of trouble, some courtiers and the regent's mistress, La Parabere, profiting vastly as a consequence. One tax collector, fined 12 million livres, was approached by a courtier and offered a reduction if he was paid a douceur douceur of 100,000 livres. "You are too late, my friend," the financier is said to have responded. "I have already made a deal with your wife for fifty thousand." of 100,000 livres. "You are too late, my friend," the financier is said to have responded. "I have already made a deal with your wife for fifty thousand."

For the unfortunates who could not escape, the procedure often appeared to have been as terrifying as feared. The financier Samuel Bernard, one of Law's most vociferous opponents, offered some 6 million livres but was still sentenced to death. The profiteers La Normande and Monsieur Gruet were heavily fined, and sentenced to "make amends" by parading in front of Notre Dame and Les Halles, La Normande wearing a s.h.i.+rt and a placard reading "voleur du peuple" "voleur du peuple" (fraudster of the public), before being condemned to spend the rest of their lives on the galleys. La Normande was eventually spared the final punishment, and most reports were merely propaganda exercises to pin the blame on the unpopular financiers, many of whom acted only as middlemen for the court elite. Nevertheless, fear of the Chamber of Justice was all too real. (fraudster of the public), before being condemned to spend the rest of their lives on the galleys. La Normande was eventually spared the final punishment, and most reports were merely propaganda exercises to pin the blame on the unpopular financiers, many of whom acted only as middlemen for the court elite. Nevertheless, fear of the Chamber of Justice was all too real.

Among the frightening panoply of French punishments-being broken on the wheel, hanged, racked, whipped, and pilloried-life on the galleys was among the most horrific. The condemned were chained, naked to the waist, in rows of half a dozen at each oar, while their supervisors strode on platforms above and whipped them to make them row harder for ten or twelve hours at a stretch. Hundreds died in excruciating agony at the oar, to be flung overboard like so much rotten meat. Like many forms of punishment, the galleys were regarded as an entertaining tourist attraction: the slaves were made to dance, sing, and row for the delectation of the crowd. The diarist John Evelyn was among the travelers who saw them in the seventeenth century. He recorded, "Their rising forwards and falling back at their oars, is a miserable spectacle, and the noise of their chains with the roaring of the beaten waters has something strange and fearful in it, to one unaccustomed. They are ruled and chastised with a bull's pizzle dried upon their backs and soles of their feet upon the least disorder, and without the least humanity."

Against such a backdrop of horror Law's scheme seemed suddenly to offer painless salvation. By spring the stage was set: his new proposal laid out plans for a private bank, funded by himself and other willing investors, which would issue notes backed by deposits of gold and silver coins and redeemable at all times in coins equivalent to the value of the coin at the time of the notes'