Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance (13 page)

T
HE
F
IRST
M
ILLIONAIRE

He was civil, and his fortune did not seem to have puff ’d him up. He was a fine handsome man, of a fair complexion as the English generally are, and had a very noble past.

Baron de Pollnitz,

Memoirs
(1738)

W
HILE
P
ARIS WAS TRANSMUTING INTO AN ENCHANTED
city, John Law, the enigmatic outsider who had effected the magical transformation, was recast as an international superstar. The Law residence in the Place Vendôme drew the eminent like pilgrims to some sacred shrine. Once-scornful princes, prelates, and grandees scurried to ingratiate themselves, waiting for hours in his antechamber, which, said du Hautchamp, was “never empty of noblemen and ladies, whose sole occupation seemed to be a desire to pay court to him.”

Most came with the intention of asking for a few extra shares at a preferential rate. Many had their requests granted—Law’s generosity was almost as legendary as the economic miracles he wrought. Saint-Simon, however, was sickened by the mass cupidity: “Law . . . saw his door forced, his windows entered from the garden, while some of them came tumbling down the chimney of his cabinet.” Like royalty, Law restricted most callers to formal audiences, and gaining entry was no easy feat. The Baron de Pollnitz, one of the many who wanted to meet the great man, grumbled that he had to bribe a succession of guards, footmen, and butlers.

Ladies had always found Law attractive; now that he had celebrity and vast wealth, they openly adored him. Haughty duchesses and elegant
mesdames
prostrated themselves before him, overturned their carriages in front of his house, inveigled their way into his home—anything to get themselves noticed. “If Law wanted it, the French ladies would kiss his backside,” grumbled the regent’s mother, aghast at their shamelessness. She related one incident in which Law had granted an audience to several ladies, then begged to be excused because he needed to relieve himself. The women refused, saying, “Oh, if it’s only that, it doesn’t matter, go ahead, piss, and listen to us.” In sheer desperation, he took them at their word; they were unabashed. Madame de Bouchu was another audacious lady whom Law was eager to avoid. Undeterred by his rebuffs, she followed him to a dinner given by an aristocratic rival, who had pointedly excluded her, and ordered her coachman to drive in front of the house and shout, “Fire.” On hearing the alarm, the guests, including Law, left the table and ran into the street. Madame de Bouchu spotted her quarry and pounced on him, but he managed to make a speedy escape.

As a man who had always cherished his privacy and livedmuch of his life ignoring convention, Law must have found the constant fuss, formality, and fawning hard to bear. In later years he would remember, “Every day I had a hundred impertinent demands.” He remained, for the most part, gracious, affable, and irrepressibly witty. When an elderly lady stumbled over her words in her eagerness to ask him for shares and said, “Give me, I beg you, a conception” instead of “a concession,” Law hid a smile and replied kindly, “It is not possible at the moment.”

According to the gossips, he was not always immune to the charms of those who offered themselves to him. Through his royal connections he was introduced to Claudine de Tencin, a renowned hostess whose salon was famous for attracting leading intellectuals and beauties. She was a vivacious, glamorous adventuress who had run away from a convent and given birth to a son, whose presence was so inconvenient that she abandoned him on a church doorstep. She had been the mistress of the regent, who had told her when pressed that he “never discussed politics with a whore between the sheets,” and later of his foreign minister Dubois. There were many rumors that Law also shared her favors, along with those of others: Fanny Oglethorpe let slip in a letter, “Law is in love with Mlle de Nail [possibly Madame de Nesle] and gives her 10,000 livres [today about US$60,000] a month to visit her when Prince Soubise is not there.” There were whispers, too, of an improbable romantic entanglement between Law and the Princess Palatine, who, at sixty-eight, clearly found him attractive. Her letters mention that he “was worthy of praise on account of his cleverness,” and that she was “greatly taken with him and he does all he can do to please me.”

Keeping a mistress was a common enough practice among the elite of Paris. Nevertheless it is likely that there was little substance to most such stories, and that the majority were no more than scurrilous gossip. Yet, whether they were true or not, Katherine, who can hardly fail to have been aware of what was said, must have been pained. She could do little, however, but turn a blind eye. Later events revealed that her affection for Law survived. At the time she distracted herself by falling into the role of society wife and became one of the most celebrated hostesses in Paris. “If you want your choice of duchesses,” one courtier reportedly told the regent, “go to Madame Law’s house, and you will find them all gathered there.” Few realized that she and Law were not married. Perhaps those who suspected the alliance was illicit dared not mention it, bearing in mind her social clout and the desirability of an invitation to her salon.

Her children were propelled into an equally elevated social orbit. The thirteen-year-old John learned to hunt and to dance with the young Louis XV and was invited to perform in a ballet with him—although at the final moment an attack of measles prevented him from taking part. He was educated, as befitted nobility, by a private tutor, one Charles Chesneau, by all accounts a kindly and gifted man. Mary Katherine received numerous offers of marriage from noble families—among them the Prince de Tarente, all of which Law, a devoted and protective father, turned down. When Law gave a party in his daughter’s honor, the papal nuncio Cardinal Bentivoglio was among the first to arrive and amazed everyone by kissing the child’s hand and playing with her doll.

Along with the invasion of his family life came a sprinkling of public accolades. Law was elected an honorary member of the Academy of Sciences, and as he passed through the streets for the inauguration ceremony the crowds shouted, “God save the King and Monsieur Law.” Scotland bestowed on him the freedom of the city of Edinburgh; the document was delivered to his door in a gold box valued at £300 (US$480) and obsequiously engraved with the legend “The Corporation of Edinburgh, having done themselves the honour to enrol in the liberties of their city, John Law, Earl of Tankerville etc., a gentleman of a graceful person, fine parts, the first of all the bankers in Europe, a happy contriver and manager of societies for trade in the remotest parts of the world . . .”

At heart, in the beginning, Law was little changed. Though now a man of inordinate wealth—he owned at least 100 million livres’ worth of shares—with stereotypical Scottish canniness, he spent his money carefully. Property continued to be a major investment. Along with a dozen or so French country estates, he bought vast areas of Paris, including a third of the houses in the Place Vendôme, where he lived. He also acquired land in the area surrounding the Boulevard St. Honoré, and the Palais Mazarin (which today houses the manuscript department of the Bibliothèque Nationale with his memoirs and documents). The balustrade from this building now adorns the Wallace Collection and features a cornucopia out of which gushes a torrent of gold coins. Law invested in diamonds, both cut and uncut, through his London banker George Middleton; paid 180,000 livres for the Abbé Bignon’s extensive library of 45,000 books; and acquired further properties in Scotland.

Art was another passion. He collected Italian and Dutch masters and commissioned works from contemporary artists. The pastelist Rosalba Carriera became a family friend, who made portraits of Law, Katherine, and the children (her portrait of Kate entitled
La Jeune Fille au Singe
survives in the Louvre). He commissioned Carriera’s brother-in-law, the artist Antonio Pellegrini, who had just failed to secure the contract to decorate the dome of St. Paul’s Cathedral in London, to decorate the ceilings of the offices of the Banque Royale. Pellegrini’s masterpiece was every bit as ambitious as Law’s system, measuring a spectacular 130 feet by 27 feet. The design, an apotheosis of all that was dearest to Law, showed the child King Louis XV and the regent surrounded by personifications of Commerce, Riches, Credit, Security, Invention, Arithmetic, Bookkeeping, Navigation, and, naturally, the Mississippi. (The ceiling’s fate echoed Law’s: it fell in 1724.)

But compared with the excesses of the day, Law eschewed overt materialism: “Inordinate influence and fortune never spoiled [him], and . . . behaviour, equipments, table and furniture could never shock anyone,” Saint-Simon affirmed. Perhaps the stalwart Katherine and his children kept his feet firmly on the ground. His house was simply furnished, he dressed relatively plainly, and he still relished an evening with friends over a hand or two of cards. An old friend, Archibald, Earl of Ilay, remembered visiting Law’s house at around this time. On arrival he was shown into an antechamber crowded with visitors. When word reached Law that Ilay was waiting, the earl was ushered swiftly into Law’s private study, where he found the great man writing to the gardener at Lauriston—according to some accounts, about the cabbages he wanted planted in the garden. Law was delighted to see him, and the two sat and played piquet for some time before joining the assembled throng.

Law’s old obsession with improving public prosperity still preoccupied him. The effect of his policy proved beneficial throughout the nation. Du Tot, deputy treasurer at the bank, commented, “Plenty immediately displayed herself through all the towns, and all the country. She there relieved our citizens and labourers from the oppression of debts . . . she revived industry.” As the economy burgeoned, Law zealously effected reform. He set in train a dynamic program of public building, funded by the abundant supply of paper money. Bridges were constructed, canals dug, roads improved, new barracks built. In Paris a generous endowment was given to the university and a bequest made to the Scots College, where his father was buried.

More controversially, he set about streamlining a tax system riddled with corruption and unnecessary complexity. As one English visitor to France in the late seventeenth century observed, “The people being generally so oppressed with taxes, which increase every day, their estates are worth very little more than what they pay to the King; so that they are, as it were, tenants to the Crown, and at such a rack rent that they find great difficulty to get their own bread.” The mass of offices sold to raise money had caused one of Louis XIV’s ministers to comment, “When it pleases Your Majesty to create an office, God creates a fool to purchase it.” There were officials for inspecting the measuring of cloth and candles; hay trussers; coal measurers; inspectors of woodpiles, paper, and bridges; examiners of meat, fish, and fowl. There was even an inspector of pigs’ tongues.

This did nothing for efficiency, Law deemed, and served only to make necessities more expensive and to encourage the holders of the offices “to live in idleness and deprive the state of the service they might have done it in some useful profession, had they been obliged to work.” In place of the hundreds of old levies he swept away (over forty in one edict alone), Law introduced a new national taxation system called the
denier royal,
based on income. The move caused an outcry among the holders of offices, many of whom were wealthy financiers and members of the Parlement, but delight among the public. “The people went dancing and jumping about the streets,” wrote Defoe. “They now pay not one farthing tax for wood, coal, hay, oats, oil, wine, beer, bread, cards, soap, cattle, fish.”

Elsewhere a similar sense of well-being came from share dealing. The regent’s family and favorites were given preferential allocations and prospered spectacularly. His mother reported that the king had millions for his household and that “My son has given me 2 million in shares which I have distributed among my household.” The Marquis de Lassay, the Maréchal d’Estrées, the Duc de la Force, and the royal princes of Conti and Bourbon made millions. Bourbon spent part of his colossal windfall in starting his own porcelain factory and redecorating his château at Chantilly. An avid equine enthusiast, he was convinced that he would come back in the afterlife as a horse, and had luxurious stables, the so-called Grandes Écuries, designed by the architect Jean Aubert. Arcaded, domed, and studded with sculpture, the palatial building could house five hundred horses and survives as an equestrian museum.

So numerous were the private fortunes gained that a new word was invented to describe them. The word “millionaire” was coined at this time to describe the rich Mississippians, first appearing in print in the lawyer Marais’s journal in 1720:

Espérons que la dividende
En sera plus sûre et plus grande
Sur le rapport qu’il en fera,
Et que l’on communiquera
Aux calotins actionnaires,
Lesquels n’ont point realisé
Comme certains millionnaires
Peuple avare et mal avisé.

Let’s hope that the dividend
Will be more certain and larger
On the return that it will bring
And one will inform
The smug investors
Who have realized nothing
Like certain millionaires
A greedy and ill-advised breed.

The term “millionaire” exerted a seductive appeal. Drawn by stories of unbelievable gains that echoed throughout Europe, foreigners flocked to Paris. Estimates vary, but around 200,000 (some put it as high as 500,000) people from Venice, Genoa, Geneva, Germany, England, Holland, and Spain, as well as vast numbers from the provinces, gravitated to the city to play the markets. The streets were choked with carriages; all modes of public transport from the major cities of Lyon, Aix, Bordeaux, Strasbourg, and Brussels were booked up months in advance; people gambled or bid outrageous sums for a place on a coach.The lucky ones arrived in Paris to find every room occupied, and even stables let as accommodation. Journalists reveled in the frenzied get-rich-quick ambience. In one periodical Defoe commented, “Beau Gage has gained three hundred thousand pounds sterling by the stocks. The Lord Londonderry also . . . being the same that sold the great diamond to the King of France is there, and they say has likewise gotten very great sums of money.” Gage was later nicknamed Croesuss, and with his winnings he attempted to buy the island of Sardinia and the crown of Poland. He was trounced in Poland, equally dishonestly, by Augustus the Strong of Saxony, prompting Alexander Pope to write in his “Epistle to Bathurst”: