John Law and the Mississippi Company
Portrait of John Law by Alexis Simon Belle, circa 1715. (Image courtesy of the National Portrait Museum, London)

John Law and the Mississippi Company
by Jon Dotson
“After the death of Louis XIV, Law, a Scotchman, a very extraordinary person… made the government and the people believe that Louisiana produced as much gold as Peru, and that it would soon be able to supply as great a quantity of silk as China.” – Voltaire
John Law was born in Edinburgh, Scotland in 1671. His grandfather and great-grandfather were both ministers, while his father was a successful goldsmith and banker. His father had amassed considerable wealth through his ventures, and brought his son into the family business at the age of 14. Law was very intelligent and had a natural ability with numbers and quickly learned the banking business in Scotland. At the age of 17, however, Law’s interest in banking was waning and he instead turned his attention to his love life and social circle. When his father passed away that same year, Law abandoned the family business entirely. He took his sizable inheritance and moved to London to experience life in the big city.
 
Law was determined to make an impression in London both socially and intellectually, and found that “gaming houses” were an easy entrance to high society. Having already been drawn to gambling in Scotland, “Law was mesmerized by this frenetic, dangerous existence. Mingling with aristocrats and opportunists, he joined in the high-rolling games of hazard, brag, primero, and basset – and predictably found himself dogged by ill fortune” by the age of 21, requiring his mother to bail him out of his debts. Law took these early losses as motivation, and turned these games of chance into skill by applying probability theory. Soon after, he became well-known for his prowess at the tables, and according to an acquaintance, “he was the first man in England that was at the pains to find out why seven to four or ten was two to one at hazard, seven to eight six to five, and so on in all the other chances of the dice…and grew a noted man that way.” Unfortunately, the gambling at the tables spilled onto Bloomsbury Square, where Law was challenged to a duel by Edward Wilson, another beau attempting to win the affections of Elizabeth Villers, a reputed former mistress of King William III.
Site of John Law’s Duel. Southampton or Blooumsbury Square by John Stow (1754).  (Image courtesy of The Map House, London)
Law killed Wilson with a single thrust of his sword. As dueling was illegal by this time, he was arrested, charged with murder, and awaited execution. The charges were later downgraded to just a fine for manslaughter. Wilson’s brother appealed this lesser charge and had Law imprisoned again while awaiting trial, but Law escaped to Amsterdam. He spent 3 years on mainland Europe, and during this time his interest in banking and economics was reignited, no doubt as a result of his study of probabilities at the tables. In 1700, Law returned to Scotland and authored Money and Trade Considered: With a Proposal for Supplying the Nation with Money in 1705, which proposed to Scottish Parliament both the creation of a national bank and the issuance of paper currency backed by physical assets (including land, gold and silver). Scotland was not yet ready to embrace this significant change, however, and Law’s proposals were rejected.
The first two pages from John Law’s proposal to institute paper currency in Scotland. From his Money and Trade Considered (1715). (Image courtesy of Google Books)
Having been unsuccessful in his economic policy pursuits in Scotland, Law returned to mainland Europe: “For fourteen years he continued to roam about, in Flanders, Holland, Germany, Hungary, Italy, and France. He soon became intimately acquainted with the extent of the trade and resources of each, and daily more confirmed in his opinion that no country could prosper without a paper currency. During the whole of this time, he appears to have chiefly supported himself by successful play.” Law eventually found himself in France and through his social circle (i.e. gambling) met Philippe II, Duke of Orleans, and regent to the young Louis XV. “The Duke of Orleans was pleased with the vivacity and good sense of the Scottish adventurer… and Law seized every opportunity to instill his financial doctrines into the mind of one whose proximity to the throne pointed him out as destined, at no very distant date, to play an important part in the government.” When Louis XIV passed away in 1715, he left the country heavily in debt due in part to the recent War of Spanish Succession with no easy path forward. In fact, the country’s income was barely enough to cover interest payments, let alone the 3 billion livres of accrued debt. Since the new king, Louis XV, was only seven years old, the country’s financial fate rested on his regent, Philippe II. While the Duke made some feeble attempts to resuscitate the economy through coin depreciation (lowering values meant lower debt) and tax collection, these measures did little to change the trajectory of the country. When Law was given the opportunity to present his economic theories to the Duke at court, he proposed that France (like Scotland) adopt a paper currency backed by precious metals and “that he should be allowed to set up a bank, which should have the management of the royal revenues, and issue notes both on that and on landed security.” The Duke of Orleans approved Law’s plan and on May 5, 1716 the Bank generale was established (later named Banque royale when it was nationalized).
A 10-pound tournois banknote, issued by Law’s new bank. (Image courtesy of Wikipedia)
John Law’s residence and first headquarters of his new bank were located at Place Vendome, now the site of the Ritz Carlton. (Image courtesy of Wikipedia)
As a result of shifting from gold and silver coins to paper, France’s money supply was greatly expanded. To entice the exchange of coin for paper, Law guaranteed the exchange rate, something that had never been done before. Almost immediately, Law’s notes were trading at a 1% premium to the precious metals that they backed. A year later, the premium on these notes rose to 15% over coins. As a result, France’s vaults were overflowing with gold and silver reserves. With the country’s confidence in his system, Law continued to issue banknotes to the joy and relief of the regent, who viewed Law as the country’s financial savior.
Translated from the Dutch as “Coat of Arms of the Company”. It depicts two Native Americans holding a large golden horn of plenty from which the Mississippi flows. From “Louisiana by de Rivier Missisippi” by Leonard Schenk (ca. 1720). (Image courtesy of Old World Auctions)
With the bank firmly established, John Law moved to the more infamous stage of his French turnaround strategy, establishing a company with exclusive trading privileges in the vast Louisiana to generate revenue for France. A letters patent was issued, and the Mississippi Company was incorporated in August 1717 (formally named Compagnie d'Occident and later Compagnie des Indes). The patent allowed for complete control of colonization and trade for a period of 25 years. The letters patent dedicated nearly half of its contents to a lengthy description of Louisiana, which “is bounded on the east by Florida and Carolina; on the North-East by Virginia and Canada, which latter is distant from it about Nine hundred Leagues. The Northern Bounds thereof are not as yet discover’d.” The text went on to describe it as “a very good and fruitful Country, and do not in the least doubt of finding several Gold and Silver Mines.” The embellishments continued by describing rich soil and wildlife including “a prodigious Number of Deer, and some Bears that do not hurt[!]…As to the Game, there are great Droves of Turkies, Snipes, Parrots, Buzzards, Ducks, Partridges, different from ours, and several Sorts of curious Birds.” Between the exaggerated marketing of Louisiana’s supposed resources, Law’s success with his new bank, and the prospect of an attractive dividend payment, demand for the company stock was strong. Law continued to issue stock in the company to pay down France’s debts, and he was rewarded with complete authority over France’s finances. The bank and the Mississippi Company were merged, and Law was named France’s Comptroller. The stock price continued to climb. In fact, as investors from across Europe began trading in this new stock, the financial district in Paris became so frenetic at times that the military was brought in to restore order. All social classes were clamoring for stock, from aristocrats down to peasants, who cobbled together their savings to participate in this life-changing “opportunity.”
Based upon Nicolas de Fer’s 4-sheet map of 1718, this single-sheet version presents the most up-to-date information on French possessions in North America. It is one of the few (along with de Fer and Ottens) to directly mention the Compagnie d’Occident in the title. “Carte de la Nouvelle France…pour l’etablissement de la Compagnie Francoise Occident” by Henry Chatelian (ca. 1719). (Image courtesy of Old World Auction)
In order to produce revenue for the Mississippi Company, John Law immediately needed to transport settlers to Louisiana to cultivate this promised wealth. He came to realize, however, that there was a reluctance among the French to emigrate. He first offered attractive incentives, including paid expenses, land, livestock, and more. Unfortunately, while he could convince people to invest in his stock, he could not convince most people to move to an undeveloped wilderness. Law decided to lead by example and purchased in partnership a large tract on the Ouachita River in Arkansas. He staffed it with 100 workers including carpenters, miners, and famers and outfitted them with ample supplies. He hoped other wealthy individuals would follow his model. After receiving word of the group’s safe arrival, Law began promoting the venture’s success, and soon after, rumors of silver deposits circulated through Parisian salons. What the leader of the party, Bernard Cantillon (brother to one of the investors), had discovered, however, was that “the struggle for survival overshadowed any attempt to farm or prospect” and “within four years, desertion, disease, and other hazards had culled the expedition’s numbers until only a quarter remained.”
A depiction of John Law’s Camp at New Biloxi before the group headed northwest to Arkansas. “Veue du Camp de la Concession de Monseigneur Law au Nouveau Biloxy, Coste de la Louisianne” by Jean-Baptiste Michel Le Bouteux (1720). (Image courtesy of the Missouri Historical Society)
While Law did convince a few others to invest in large-scale expeditions, he required larger numbers of settlers sailing for Louisiana to gain critical mass. He supported new legislation “whereby every criminal, vagabond, and prostitute and any servant unemployed for more than four days was listed and liable for transportation.” Further, an army of mercenary soldiers, called archers, was hired to apprehend and bring these individuals to the nearest port for transport to Louisiana. In all, over 4,000 people in Paris alone were transported to Louisiana through this legislation.
 
Following a surge of public disapproval (mostly aimed at the overreaching archers), Law shifted his strategy, focusing on incentivizing young married couples to the colony. Some “creative” arrangements were made, including matching “500 boys and girls from the hospitals of Bicetre and de Salpetriere…the girls were in wagons and the boys on foot escorted by 32 guards.” Perhaps even more spectacular, was the mass wedding of 80 young girls to 80 “specially pardoned criminals.” The marriage ceremony took place with each couple shackled in heavy chains. It appeared that rumors of difficulties in the colonies had spread, and that even the promise of freedom could not assuage the fear of survival. By early 1720, with French emigration dwindling, Law turned to Irish, Scottish, Swiss and German settlers who were more willing to emigrate for financial incentives. The great effort made in collecting settlers in Europe, however, did not seem to translate to colonists in Louisiana. This was most obvious in New Orleans.

Founded in 1718, New Orleans was the jewel of the Mississippi Company, and was marketed to be a “prosperous town of nearly 800 very comfortable and well-appointed houses, each one of which has attached 120 acres of land for the upkeep of the families.” However, colonial Governor Bienville’s report to the Company in 1719 indicated that New Orleans consisted of only four simple houses with residents surviving only by trading with the natives. Law’s major predicament was that 50% of those who journeyed to Louisiana didn’t survive, and another 10% died from disease while there. Conflicts with natives further reduced settler population, not to mention growing tensions with its neighbors, England and Spain. If Law’s Mississippi Company had any chance to survive and thrive, they were going to need more time.
The city of New Orleans was officially founded in 1718, but the very first buildings were destroyed by hurricane in 1722. Levees and canals were constructed in the 1720s and this manuscript plan laid out the vision for the city (now the French quarter). This plan would not come to fruition until the 1740s. (Image courtesy of the Bibliothèque Nationale de France)
The significant challenges facing settlement in Louisiana did not translate to the company’s stock price in Paris. Over the course of 1719, with the potential wealth of Louisiana fully embraced, the stock price rocketed from 500 livres per share in January 1719 to 10,000 livres in December, representing a nearly 2,000% increase. With the gains becoming so attractive, some investors began to sell their stock, converting them back into gold and silver coins. As a result, the stock price began to fall. Law acted swiftly, knowing that the value of the stock far outpaced the gold reserves, and imposed limits on gold payments to 100 livres (a fraction of a share). He also made the company’s stock legal tender (essentially cash) in a further attempt to prevent draining their precious metal reserves. This decision had the unfortunate consequence of doubling the money supply. Inflation skyrocketed, crippling the French economy. By September 1721, the stock price had completely reversed, returning to where it had begun at 500 livres per share. Law was subsequently dismissed both from his role as Comptroller of France and Head of the Indies Company. Law left France for good, returned to his gambling habits, and died penniless from pneumonia in 1729.
Decorative cartouche from Homann’s map of Louisiana (ca. 1730). The scene depicts a female personification of Fortuna pouring jewels and riches forth, while she is perched precariously upon a ball, signifying the uncertainty of fortune. A group of disconsolate investors at right wail and bemoan their fates as one tries to impale himself on his sword. (Image courtesy of Old World Auctions)
A satirical engraving showing John Law, Hercules, and others attempting to hold up the weight of the world. From Het Groote Tafereel der Dwaasheid (ca. 1720). (Image courtesy of Old World Auctions)
Before his death, John Law admitted “I do not pretend that I have not made mistakes, I admit that I have made them, and if I could start again I would act otherwise. I would go more slowly but more carefully.” Of course, the nature of man is to blame as well. Man’s desire to make as much as one can for as little effort as possible is timeless, and the frenzy that can occur in markets reflect this flaw. Despite Law’s shortcomings, a number of respected economists have praised his approach, including contemporary Adam Smith, who called Law’s system “the most extravagant project both of banking and stock-jobbing (brokering) that perhaps the world ever saw.” J.K. Galbraith, an economics professor at Harvard in the 1970s, noted that Law “showed, perhaps better than any man since, what a bank could do with and to money.” Certainly in today’s economy, in which value is stored in paper, plastic and an abundance of digital coins and tokens, many of Law’s economic concepts have been fully embraced.
An idealized scene of settlers trading with Indians along the banks of the Mississippi River. In the corners are vignettes showing investors devastated by the scheme. This anonymous engraving translates from the Dutch to “New Colony around Wind” (1720).
My shares which on Monday I bought
Were worth millions on Tuesday, I thought.
So on Wednesday I chose my abode;
In my carriage on Thursday I rode;
To the ballroom on Friday I went;
To the workhouse next day I was sent.

- Anonymous

For a comprehensive list of maps and prints related to John Law in the Old World Auctions archive, click here
References:

Buchan, James. John Law - A Scottish Adventurer of the Eighteenth Century. London: MacLehose Press, 2018.

Gleeson, Janet. Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance. New York: Simon & Schuster, 2009.

MacKay, Charles. Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. London, 1852.

MapForum Articles. “John Law and the Mississippi Scheme.” Published March 14, 2022 (5th Issue). https://mapforum.com/2022/03/14/john-law-and-the-mississippi-scheme/

Moen, John. “John Law and the Mississippi Bubble: 1718-1720.” Accessed September 5, 2025. https://www.mshistorynow.mdah.ms.gov/issue/john-law-and-the-mississippi-bubble-1718-1720 

Vidal, Cecile. “New Orleans from 1718 to 1769.” Accessed September 5, 2025. https://heritage.bnf.fr/france-ameriques/en/new-orleans-1718-1769