| 1671 |
John Law is born at Edinburgh, Scotland. From his father, who is a wealthy goldsmith and banker, he inherits an estate called Lauruston and a considerable fortune. |
| 1691 |
Law moves to London. |
| 1694 |
Law prefers life in a large city and at age 23 years he lives London. He becomes a gambler, kills a man in a duel and is sentenced to death. He manages to escape to Holland, and after roaming over the continent of Europe for several years. He has been studying the newly founded Bank of England and the Bank of Amsterdam whis is a century older. |
| 1705 |
Law returns to Scotland and puts before the Parliament in Edinburg proposals for the establishment of a trading corporation and the use of paper money. The other Stots reject his scheme. |
| 1707 |
A union of Scotland and England, where he is still under a death sentence, is imminent. John Law flees back to the Continent, settling in France. He makes the acquaintence of Philippe, Duc d'Orleans. Law gambles so heavily that he is expelled from France by Louis XIV. |
| 1713 |
About the time of the death of Louis XIV, Law returns to Paris. He has accumulated a knowledge of banking and credit from across Europe and can present it in a bold and coherent manner. |
| 1715 |
He persuades Philippe, who is now Regent, to consider a banking scheme that promises to improve the financial condition of the kingdom. At first he is turned down by the government. |
| 1716 |
A bank known as Banque Generale is chartered in 1716, which becomes the royal bank of France since 75 percent of its capital consists of government bills. Although in theory a private affair, it is linked from the beginning with liquidation of the national debt. |
| 1717 |
When Crozat surrenders his monopoly of the Louisiana trade in 1717 Law creates a trading company known as the Compagnie d'Occident (or the Compagnie du Mississipi) a company to succeed him and receives a large concession in Arkansas with the title of duke. This company is linked to the bank and government bills are accepted for the purchase of shares. |
| 1718 |
The plan is so promising that Law gains a monopoly on all French overseas trade and changes the name of his company to the Compagnie des Indoes. In 1718 the bank becomes a state bank. |
| 1719 |
Law's system is at the height of its existence. By accepting the government bills he makes a considerable contribution to a reduction of the national debt. |
| 1720 January |
Last year John Law was a foreigner and a protestant. Now he is naturalized and converted to Catholicism. This is all in preparation for his appointment to the highest post in the French government of the Ancien Regime. He is now the Controleur general - with control over the entire financial destiny of France. The result of his financial plan is a huge wave of speculation as the value of a share goes from its initial value of 500 livres to 18,000 livres, settling at around 10,000. |
| 1720 February |
A month after its height a dividend of 40 percent is declared, but those investors that paid more get considerably less, about 2 percent net interest. Those in the know realize that the shares were bound to fall. They are presented paper money at the bank but demand gold and a panic ensues. Sure enough, shares fall by 50 percent in a matter of days. Law juggles the system until December |
| 1720 December |
Law juggles the system until December, braving the hostility of the whole country. Finally he gives up and flees to Brussels, a broken and financially ruined man. It will take three years to clear up the financial fall out of his scheme. The national debt had been cut in half, but the long term effects delayed the establisment of another bank for 80 years. A violent inflation was unleashed on the country. Enormous fortunes had shifted hands, but most were caught by the debacle and were ruined. |
| 1729 |
John Law dies poor at Venice in 1729. |