This celebrated financial projector was born at Edinburgh, in April, 1671. His father was a goldsmith, and gave him a liberal education. He made considerable progress in polite literature, but his favorite study was finance as connected with national prosperity.

In 1694, he visited London, where his talents and accomplishments gained him access to the first circles. He possessed an easy address, with an elegant person, and being a favorite with the fair, he acquired some[Pg 227] notoriety in fashionable life. He became involved in a duel, in which he killed his antagonist, and was consequently committed to prison. He contrived, however, to escape, and took refuge on the continent.

In 1700, he returned to Edinburgh, where he broached a scheme for removing the difficulties which then existed in consequence of the scarcity of money and the failure of the banks. Having confounded currency with credit, he adopted the notion that paper money, equal to the whole property of the nation, might safely be issued. Upon this egregious error, his project was founded, and was, of course, rejected by his wary and sagacious countrymen.

Law now visited the principal cities of Europe; his address gaining him admittance to the highest circles in all countries. He finally settled in Paris, and was there during the regency of the Duke of Orleans, as guardian of Louis XV. The government of France was then on the verge of bankruptcy, in consequence of the enormous expenditures of Louis XIV. Law now brought forward his schemes for a free supply of money, and they were seized upon with avidity.

He established a bank, for which, a royal charter was granted in 1718. It was first composed of twelve hundred shares, of three thousand livres each, but the number was afterwards increased and the price reduced. This bank became the office at which all public moneys were received. A Mississippi company was also attached to it, which had grants of land in Louisiana, and which was expected to realize immense sums by planting and commerce. One privilege[Pg 228] after another was granted, until the prospects of advantage appeared to be so great that crowds came forward to make investments in the stock of what was called the Mississippi Company.

Thousands embarked in the scheme with enthusiasm. The shares were greedily bought up, and such was the rage for speculation, that even the unimproved parts of the new colony were actually sold for thirty thousand livres the square leag............