Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance (22 page)

I have sacrificed everything, even my property and my credit, being now bankrupt not only in France but also in all other countries. For them I have sacrificed the interests of my children, whom I tenderly love, and who are deserving of all my affection; these children, once courted by the most considerable families in France, are now destitute of fortune and of assets. I had it in my power to have settled my daughter in marriage in the first houses of Italy, Germany, and England; but I refused all offers of that nature, thinking it inconsistent with my duty.

Desperate for money, worried that he might be thrown into debtor’s prison at any moment, and hopeful that if he were employed by the English authorities they might take up his case with France, Law now turned to Walpole for a diplomatic post. Although as a Catholic he was barred from holding an official diplomatic position, Walpole agreed. Law was delighted: “I will do all I can so that his majesty and his ministers are satisfied with my services,” he wrote a few days before leaving.

Having received his first payment from the government, presumably with much relief, John Law crossed the channel on August 9, 1725, accompanied by his nephew. He had been instructed to head for the spa of Aix-la-Chapelle, and take the waters while awaiting further orders. His role was to be far from orthodox: he was to journey through Europe, pretending to be a traveler but in reality acting as an undercover agent, reporting anything of interest he noticed. France’s “meteor” was poised at the age of fifty-four to embark on a new career as a spy.

V
ENETIAN
S
UNSET

I stood in Venice, on the Bridge of Sighs;
A palace and a prison on each hand:
I saw from out the waves her structures rise
As from the stroke of the enchanter’s wand:
A thousand years their cloudy wings expand
Around me, and a dying Glory smiles
O’er the far times, when many a subject land
Look’d to the winged Lion’s marble piles,

Where Venice sate in state, throned on her hundred isles!

Byron,
Childe Harold’s Pilgrimage
,

canto the fourth

L
AW ALWAYS RELISHED PLAYING THE MAN OF MYSTERY
. Relieved to have a distraction from his problems in France, he threw himself into the subterfuge with typical enthusiasm. He arrived, as planned, in the German resort of Aix-la-Chapelle in early September to await orders. Aix-la-Chapelle—or Aachen, as it was also known—was one of Europe’s most famous spas, where the fashionable congregated to take the sulfur waters, socialize, and happily for Law, to gamble. He made no attempt to conceal his identity, and visitors to the chic watering hole were enchanted to meet and quiz the international celebrity—little suspecting that while they were trying to extract snippets about his system he was pumping them for political insights. The elector of Cologne and Prince Theodore, his brother, were passing through incognito when they heard Law was in town and immediately sent word to his lodging inviting him to wait on them. Law was still in bed when his valet informed him that the elector desired to see him, but conscious of his duties as a secret agent, he dressed hastily and rushed to pay his respects, then reported the encounter back to Whitehall.

A month later he was still waiting for instructions, and the suspicion that his assistance was not quite as crucial to the British authorities as he had presumed was beginning to grow. To jolt them into action he dispatched a sharp reminder that his fame in Europe was undimmed and offered entrée to the highest circles. “The work I did in France and the confidence that the Duc d’Orléans had in me excites curiosity. I see that in Vienna ministers and even the Emperor wanted to speak to me on the business that passed between my hands.” Although to English eyes the imperial court at Vienna was of particular interest—Austria had recently broken her alliance with England and France and forged new ties with Spain—Law was much too high-profile and contentious a figure to be trusted to dabble in such delicate matters. Eventually he was given the far less crucial job of visiting Munich to try to persuade the elector of Bavaria to break with Vienna and favor the English alliance.

Leaving Aix-la-Chapelle in early December, he broke the journey in Augsburg, where he had arranged for letters from France to be sent. Again, mindful of his new position, he took every opportunity to mingle in political circles. The ambassador of Savoy to France, Monsieur de Courtance, was in town and eager to talk. Law made diligent use of the opportunity at hand: “I made him see that the Alliance of Spain and Portugal won’t be a great help to the Emperor; that his British Majesty was today the only maritime power, who could put more vessels to sea than all the other powers combined, that Spain and Portugal risk much with regards America if they enter into war with England.” Like everyone else in Europe, Courtance was hungry to find the secret of Law’s moneymaking. Law hated to be viewed as a failed conjuror, but could rarely resist an opportunity to hold forth on his pet subject. Discussions such as these meant he could justify his actions—probably to himself as much as to those listening—and gave him a sounding board for new ideas. He held forth on the subject of luxury and told Courtance that luxury was not to be feared—unless it creates a trade deficit. So long as industry and output expand, a country will prosper.

On New Year’s Day, Law’s party left Augsburg for the short journey to Munich and the court of Elector Maximilian Emmanuel of Bavaria. Munich was generally thought to be one of the most pleasant of German courts. “The splendour and beauty of its buildings both public and private . . . surpasses anything in Germany,” wrote one eighteenth-century tourist. And as an added attraction, the carnival was in full swing. Law, still fired with commitment to his assignment, and eager at last to have the chance to get on with it, ignored the entertainments and headed straight for the electoral palace. Maximilian had been indisposed for several days with “a type of rheumatism in his neck which greatly torments him and prevents him from sleeping, and forces him to remain in bed.” Nevertheless, news of the arrival of the illustrious Law cheered him, and the following day Law was summoned to his bedchamber.

Greeting him warmly, Maximilian questioned why, when Law had passed through Munich on his departure from France four years earlier, he had failed to visit. Law alluded vaguely to his dilemma with creditors: “I had then reasons for passing without being known.” But the fact that he was now lingering in international resorts, living the life of a well-to-do tourist, can only have added further fuel to the rumors that he had a hidden cache of funds somewhere. Maximilian, in common with most of Europe, was under the impression that Law was still fabulously wealthy, and he was as keen as everyone else to get him onto the subject of money. Bemoaning the high interest he was being forced to pay on loans, he wondered whether Law might help him out. Law replied frankly, “I took the occasion to tell him that if I was in a position to do so I would lend to His Excellency with pleasure, and at a reasonable rate of interest, but that I had nothing outside France, and that since my affairs were still undecided I had my own difficulties.”

After promising initial discussions, Law left the ailing elector without tackling the question of the English alliance, but the intention on both sides was that the talks should continue soon. The following day the elector’s health seemed improved, but he was not well enough to receive visitors. Law passed the time meticulously reporting the details of his first meeting back to London. He was still frantic for news from France, and the letter begins and ends with entreaties to the Duke of Newcastle and Walpole to intercede on his behalf with the Duc de Bourbon.

A week later the elector’s health deteriorated. The pains spread from his neck to his stomach and were so severe that it was feared his life was endangered. More medical advice was urgently sought, and leading physicians were summoned. A French doctor pronounced the illness not life-threatening and promised to restore him to full health, but despite his confident prognosis, a fortnight later Maximilian was dead.

Uncertain what he should do next, Law remained in Munich. Ostensibly he was still fulfilling his role as undercover agent, dispatching information about the armies of Bavaria and the neighboring state of Hesse Cassel and waiting for further instruction. His presence in Bavaria drew several influential visitors, among them Count von Sinzendorff, an Austrian minister to whom Law gave a copy of a memoir explaining his ideas, which, he said, would prove the scheme “well founded and that it would have lasted if extraordinary events had not intervened.” Despite his sufferings his idealistic approach to money remained unchanged, and when von Sinzendorff asked him about state lotteries, Law, still haunted by visions of the rue Quincampoix tumult, replied disapprovingly that they encouraged debauchery, whereas “wealth should be acquired by industry not by luck or gambling.” Bearing in mind that apart from his salary from the British government, he relied heavily on gambling for his own income, it seems Law was far from gratified or easy with the life he had been forced to lead.

As months passed, his presence in Munich seemed increasingly futile. The new elector Charles Albert had no intention of joining forces with Britain against Austria. No further assignments were proposed. There was no indication that anyone in England paid heed to his reports. When, eventually, Law grew tired of waiting and tendered his resignation to the British government, it was accepted without any apparent dismay. Venice, the city in which he had always felt at home, beckoned once more.

Henry James once wrote that only by living in Venice from day to day does one feel the fullness of its charm. It is, he said, as “changeable and nervous as a woman, and you know it only when you know all the aspects of its beauty.” In 1726, as Law returned for the third and final time to the city of canals, campaniles, and card games, similar sentiments must have struck him. Venice’s artistic riches, its Bacchanalian masqued balls, regattas, pageants, and processions, which had first entranced him and Katherine a quarter of a century ago, were comfortably familiar but captivating still. As time passed, and his affairs in France remained unresolved, the city’s tranquil beauty must also have brought solace from the clouds of disillusionment.

Creditors remained an overwhelming worry. Some were patient in their demands, others made menacing threats against his life and that of his son if they were not refunded. Defenseless in the face of financial demands he could not hope to meet, and desperate to find a surreptitious way to leave something to his family, he began to invest surplus winnings in art and dabble in picture dealing. Katherine may have helped the burgeoning collection by sending some of his paintings from Paris before their household effects were seized. Within two years he had assembled a collection of nearly five hundred works, including paintings by Titian, Raphael, Tintoretto, Veronese, Holbein, Michelangelo, Poussin, and Leonardo.

In exploring the art market Law was again revealing his highly original business acumen. At the time paintings were viewed as symbols of status and signals of good taste rather than as a sound investment. Burges, the English resident (government agent), was typical of the age in failing to perceive the intrinsic value in art, and wrote disparagingly of Law’s dealings, “No man alive believes that his pictures when they come to be sold will bring half the money they cost him.” Law, he felt, had been badly cheated. “I think it is generally agreed he bought his pictures very ill and was horribly imposed on in every bargain he made.” Time proved Law correct. Today such a collection would be far beyond the reach of all but a handful of multimillionaires.

On his return to Venice, perhaps as a memento for Burges or his family, Law commissioned a portrait of himself by the Dutch artist John Verelst. Last seen on the open market in the 1960s and now in an unknown private collection, the portrait is a world away from the image painted when he was at the height of his power. He is plainly dressed in an unbuttoned velvet jacket and white cravat, classically posed, with one arm bent and the other holding a glove. The stance is taken, appropriately, from the great Venetian artist Titian. The face that broods disconcertingly away from the viewer has filled out. The wig, no longer the ripplingly extravagant peruke of earlier days, is in the new shorter style known as a
perruque à noeuds,
powdered a pale gray suggestive of advancing years. He was now fifty-six. For all that, it is still a face of distinction and allure: the wide forehead, heavy eyebrows, and extravagantly beaked nose are marked as in every portrait of him; the mouth is sensually full and half smiles, as if at some remembered diversion. But the air of placid, well-to-do contentment it conveys is deceiving.

Law’s pleasure was tinged progressively with despair, but until the end, when the façade finally fell, few realized his underlying melancholy. When the celebrated writer and political philosopher Montesquieu came to call a year after the portrait was painted, on August 29, 1728, Law retraced the early days of the bank and company and “pretended that the fall of his system came about because of suspicion with regard to his
arrêt
(which divided the notes) so that it was revoked, and the public could no longer have confidence in him after he had been flouted in such a way.” Montesquieu was struck by Law’s argumentativeness: “The whole force of [his] arguments is to attempt to turn your reply against you, by finding some objection in it,” he recalled. Montesquieu had never been sympathetic to Law: in 1721 he had anonymously published
The Persian Letters,
a savage satire on the excesses of the regency in which he had scathingly attacked Law. In Venice, after spending two hours with Law, even though he declared him to be “more in love with his ideas than his money,” his suspicions remained. Law, wrote Montesquieu, was “still the same man, with small means but playing high and boldly, his mind occupied with projects, his head filled with calculations.”

But even if Montesquieu failed to realize it, Law was profoundly changed. After seven long years the scrutinizing of his affairs in France dragged relentlessly on, no closer to conclusion. He had sustained his belief that eventually justice would prevail, but the news that a further commission had been appointed to reexamine his accounts forced him to the depressing conclusion that matters would never be resolved in his lifetime. With the realization, despair descended and his health became frail. As winter passed and another carnival drew to a close, Law fell gravely ill with pneumonia. He had suffered from a weak chest, rheumatism, and recurrent fevers for some years, and the dampness of the winter months in Venice must have made it worse. At the end of February he developed “a shivering cold fit which lasted him five or six hours, and that was succeeded by a violent hot one, which has never intermitted but continued upon him ever since.” Despite the usual medical ministrations of emetics and bleeding, his condition worsened. Everyone who saw him knew that his life was drawing to a close.

Death held no fears for him. On the contrary, he was “very desirous to die; believing his death would be of greater service to his family at this juncture than any other.” Only then, he confided to Burges, did he believe that the hounding of him and his family would end: “They will be more inclined to do him justice in France when they shall know how poor he dies, and that he has nothing in any part of the world but in that country and in the King’s hands.” Pragmatic to the last, he instructed his twenty-two-year-old son to go to France immediately after his death and throw himself on the king’s mercy.