Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance (4 page)

The unreliable coinage created difficulties for everyone: Ward was typically enraged when his money dealer tried to pay him in debased coins that he thought only a rogue would dare offer and only a foolish man accept. At times the situation was so acute that traders returned to bartering or charging inflated prices to compensate for the dubious value of the money available, and civil unrest frequently erupted. One remedy was to introduce new coins with a metal content closer to their face value, and with clipperproof milled edges. At first the treasury circulated new coins without withdrawing the old ones and the situation grew even worse: money dealers rushed to melt down the old coins and smuggle the resulting bullion onto the European market, where it fetched a higher price than in England—which proved a theory put forward a century earlier by Gresham and immortalized as Gresham’s Law, that bad money drives out good. The financial pandemonium taught Law a valuable lesson: he began to see that for a country to prosper and maintain its political status quo, sound money was essential.

While the theoreticians and “projectors”—entrepreneurial proposers of new financial schemes—wrestled with how to manufacture and maintain an adequate money supply, King William needed money to pay, feed, and equip his soldiers against the French, and to build and fit new ships. But, infuriatingly, every request for a loan was thwarted. The only way out was to authorize one of the flurry of inventive money-raising projects. Many were harebrained or deceitful, but a few held real promise. Watching from the sidelines, Law took note.

The ingenious scheme that William eventually sanctioned was proposed by William Paterson, a Scot. It was simple, as have been many of the most effective innovations throughout history. Basing his ideas on the highly successful national banks of Amsterdam and Venice, Paterson proposed that money could be raised for the king by the formation of a bank funded by a large number of private investors. Each would subscribe to a total value of £1,200,000, and this sum would then be lent to the king for eleven years at 8 percent interest. To allay fears of a repetition of Charles II’s waywardness, the government would guarantee repayment of the loan. Depositors were to be given handwritten banknotes, signed by one of the bank’s cashiers, which contained a promise to pay the bearer on demand the sum of the note—in other words, the note could be exchanged for gold or silver coin at any time by anyone presenting it for payment. Thus banknotes would circulate in a limited way as paper money.

The subscription list of the institution, known ever since as the Bank of England, was opened for investors on June 21, 1694. Within twelve days the total was subscribed. The king had enough money to pursue his war—for the time being at least—and the limited issue of banknotes as a new medium of exchange helped alleviate the shortage of coin.

Even if he had had the resources to do so, John Law could not have invested in what turned out to be a financial landmark that underpinned the rapid advances of his age. He was in prison, convicted of murder.

T
HE
D
UEL

Twill be in vain to make a long defence,
In vain ’twill be to plead thy innocence.
His breath concludes the sentence of the day,
He kills at once, for ’tis the Shortest Way.

Daniel Defoe,

More Reformation
(1703)

A
S THEIR CARRIAGE DREW INTO
B
LOOMSBURY
S
QUARE
, the two men found John Law waiting. Hearing the clatter of carriage wheels, he turned expectantly and watched as one of them descended from the carriage and strode purposefully toward him. It was just past midday on April 9, 1694.

Bloomsbury Square was a celebrated architectural land-mark on the fringes of a rapidly advancing city. Three sides were framed with gracious brick-fronted façades, the recently completed residences of the well-to-do who had escaped the stench of the city and gravitated to this district in search of “good air.” Spanning the northern limit stretched the imposing, multipedimented Southampton House. Beyond, formal gardens avenued with lime trees led on to open fields that separated the square from nearby St. Giles.

In spring and summer months this meadowland divide was filled with flowering grasses and scattered with cowslips, foxgloves, and heartsease. Amorous couples wandered among the peach trees that, according to the great nineteenth-century historian Macaulay, improbably flourished here; snipe nested safely among grassy tussocks of damp undergrowth. Yet a more menacing convention overshadowed this urban Arcadia: the stretch of open terrain was renowned in seventeenth-century London as a place where duels were regularly fought.

It was on this ground that John Law paced apprehensively as the man from the carriage approached. It appeared—as several witnesses later attested—that a meeting had been prearranged between them, a fact that would be significant later on. As he came face to face with Law, perhaps with a flourish of drunken confidence, the man drew his sword. Instantly and, he would later say, unthinkingly, John Law responded. Drawing his sword—“a weapon of iron and steel that had cost five shillings”—with unexpected speed he made a single defensive lunge. With a brief, anguished cry his opponent fell, mortally wounded, to the ground.

History does not record what happened next. We can surmise, however, that as in any metropolis a crowd gathered, and that among the cluster of ghoulish spectators and concerned passersby was a sheriff ’s officer. John Law seems to have made no attempt to escape. Answering the officer’s questions, he declared himself to be twenty-three years of age, a resident of the nearby parish of St. Giles-in-the-Fields, where he had settled several years ago after having moved from Edinburgh. The constable’s attention turned next to the victim and his companion, who introduced himself as Captain Wightman. The dead man, noted the constable, was of similar age to his assailant and grandly dressed. Examining the corpse more closely, or asking Wightman to identify it, he must have flinched with surprise: the body was that of Edward Wilson, one of London’s most enigmatic, flamboyant, and talked-about dandies. His death, the stalwart constable might have reflected, could only serve to fuel the blaze of gossip already surrounding him.

While Law settled into London, he had not only pondered mathematical and financial conundrums. In his idle hours he had continued to gamble and philander. Practice had increased his winnings in both spheres, but along with the fashionable friends, enticing
amours,
and triumphant gains had come enemies too. At some stage Law crossed the path of Edward Wilson, the fifth son of an impoverished gentleman from Keythorpe in Leicester, whose estate was heavily mortgaged. In his youth Wilson is believed to have served as a humble ensign in Flanders, but recently in London he had led such a flamboyant life that he had caught the eye of London society. John Evelyn described him living in “the garb and equipage of the richest nobleman for house, furniture, coaches, saddle horses.” Another eighteenth-century writer recalled that Wilson “took a great house, furnished it richly, kept his coach and six, had abundance of horses in body clothes, kept abundance of servants, no man entertained nobler, nor paid better.” But where had the money come from? Even in the gossipy circles that both he and Law frequented no one could discover its source, though many hours were wasted talking about it.

Wilson paid off his father’s debts and took care of his sisters by introducing them to polite society in the hope that they would make good marriages. One Miss Wilson moved into the same lodgings where John Law and his mistress Mrs. Lawrence were living. At some point Wilson and Law clashed. Angry letters were exchanged over the impropriety of Law’s living arrangements. Tempers ignited further when Miss Wilson, doubtless with her brother’s encouragement, flounced out of the lodgings and took rooms elsewhere. Law was roundly scolded by his landlady, who, egged on by Wilson, fussed that Law’s libertine lifestyle might damage the reputation of her hitherto respectable establishment. She did not want scandal. Law retaliated by writing more angry letters to Wilson, and when these did not improve matters, paid a visit to his mansion. Over a glass of sack he warned him, unequivocally, to stop spreading rumors.

But animosity continued to brew. Events came to a climax on the morning of April 9, 1694, the day of the duel, when Law entered the Fountain tavern in the Strand and found himself face to face with Wilson and his friend Captain Wightman. Significantly, Wightman never divulged precisely what was said in the crucial exchange leading to the fatal duel. He commented only that “after they had staid a little while there, Mr. Lawe
^*
went away, after which Mr. Wilson and Captain Wightman took coach, and were drove towards Bloomsbury,” which implies that Wilson was the aggressor. If not, as a friend of Wilson, Wightman would have said so.

^*
Law’s name is variously spelled in seventeenth- and eighteenth-century texts—Lawe and Lawes often appear in England, and in France Lass is a common alternative.

John Law was arrested and taken to Newgate prison to await his trial. Prison life in the late seventeenth century was redolent of menace. “The mixtures of scents that arose from tobacco, dirty sheets, stinking breaths, and uncleanly carcasses, poisoned our nostrils far worse than a Southwark ditch, a tanner’s yard or a tallow chandler’s melting room. The ill-looking vermin with long rusty beards . . . came hovering round us, like so many cannibals, with such devouring countenances as if a man had been but a morsel,” one eyewitness recalled of a terrifying night spent in a typical London jail. Newgate, its cells crowded with prisoners awaiting execution or sentence for capital offenses, was the most fearsome of all London’s jails. Later Daniel Defoe was incarcerated there on charges of seditious libel, and an inkling of the horrors to which inmates were subjected may be gleaned from his novel
Moll Flanders:
“’Tis impossible to describe the terror of my mind, when I was first brought in . . . the hellish noise, the roaring, swearing and clamour, the stench and nastiness, and all the dreadful crowd of afflicting things that I saw there, joined to make the place seem an emblem of hell itself,” Moll recalled.

Law was almost certainly spared Newgate’s worst extremes, because he had at his disposal two potent weapons that Moll did not: money and friends in high places. Though far less famous than his victim, he moved by now in elevated circles, and when word of his arrest spread, wealthy friends rallied to his support, offering guidance, and, more important, money to make his stay in prison more bearable. For a considerable fee he could enjoy the relative luxury of rooms in the king’s block, away from the misery and corruption of life “commonside.” But though gratefully availing himself of the benefits of wealth and influence, Law failed to grasp their more fundamental advantages. In seamy seventeenth-century London, they offered not only a comfortable cell but also a buffer against the corrupt wheels of justice. Against his friends’ advice, Law never attempted to deny his part in Wilson’s death. His story never changed: Wilson had drawn his sword first, Law had acted in self-defense. He was not guilty of murder, he claimed repeatedly, but of manslaughter.

Yet in the eyes of seventeenth-century justice the case was not so clear cut. The question of who initiated the fight was irrelevant. What counted was whether the fight had been premeditated, and whether Law had with malice aforethought planned to kill Wilson. There was plenty of evidence to support this hypothesis, Wilson’s relatives claimed. Wightman testified that earlier in the day the two men had quarreled bitterly. Then Wilson’s manservant revealed their long-standing rivalry over Mrs. Lawrence, and letters were found among the dead man’s belongings that proved a lengthy and acrimonious disagreement had existed. Thus, after several days in Newgate, Law was informed that he would be charged not with manslaughter but with the capital offense of murder.

The case came to court at the routine sitting of the King and Queen’s Commissions at the Old Bailey a few days later. A typical mixture of cases was to be heard; most were routine charges of stealing—jewelry, gold, silver, silk dresses, petticoats, tippets, scarves, and stockings (textiles feature high in lists of seventeenth-century burglars’ loot). A further five prisoners faced capital charges of counterfeiting and clipping coins. There were two alleged rapists and, strangely, a man accused of road rage, usually assumed to be a late-twentieth-century phenomenon: one Matthew Pryor was indicted for driving the near wheel of his coach against the left leg of a lady who later died of the injury. (He was acquitted: there was no proof he had driven with deliberate lack of care.)

Law must have shuddered when he learned that his case was to be heard by the aging Sir Salathiel Lovell, who prided himself on his high conviction rate, and who is remembered for his appalling memory, his questionable integrity, and the sadistic pleasure he derived from tormenting those who came before him. Lenient sentences were conferred on defendants who offered bribes, and he was happy, if necessary, to take a share of a criminal’s booty. Those unable to pay experienced a brutality only exceeded by his notorious contemporary Judge Jeffreys. Daniel Defoe stood before Lovell and lampooned him in the
Reformation of Manners:

L——the Pandor of thy Judgment Seat
Has neither Manners, Honesty nor Wit,
Instead of which, he’s plenteously supplied
With nonsense, noise, impertinence and Pride . . .
But always serves the hand who pays him well;
He trades in justice and the souls of men
And prostitutes them equally to gain.

Law, by now just twenty-three, was an opportunist with an idealistic streak who had not, as far as we know, come before the judiciary before. With all the naïveté, stubbornness, and recklessness of youth, he refused to doubt the system, having never previously experienced it. Now, faced with Lovell’s mercenary brand of justice, he was disillusioned.

Lovell instructed the jury that everything rested on whether the two men had prearranged their duel: “If they found that Mr. Lawe and Mr. Wilson did make an agreement to fight, though Wilson drew first, and Mr. Lawe killed him, he was [by construction of the law] guilty of murder.” Legal procedure of the time meant that as defendant in a Crown case, Law was not entitled to a legal representative, or to testify or to call witnesses. His solitary means of defense was an unsworn statement that was read out in court. In it he claimed that the meeting in Bloomsbury “was an accidental thing, Mr. Wilson drawing his sword upon him first, upon which he was forced to stand in his own defence.” Therefore, he argued, “the misfortune did arise only from a sudden heat of passion, and not from any propense malice.” Numerous character witnesses “of good quality” testified at length to Law’s unquarrelsome nature and general good character.

But nothing could detract from the judge’s damning influence: “This was a continual quarrel, carried on betwixt them for some time before, therefore must be accounted a malicious Quarrel, and a design of murder in the person that killed the other,” he said, in summing up the case. Law’s friends claimed later that both judge and jury had been bought off by Wilson’s powerful and vengeful relatives, which seems highly probable, bearing in mind Lovell’s reputation. In any event Law’s case was lost. After having considered the verdict very seriously, the jury declared that he was indeed guilty of murder as charged.

A total of twenty-eight defendants were convicted during the three-day hearing. Of these, twenty-one, mostly burglars and thieves, were to be punished by branding—or “burnt in the hand,” as it was termed. One was to be transported to a penal colony. The remaining five were sentenced to death by hanging. Three were forgers and clippers of coins. The fourth was the rapist. The fifth was the twenty-three-year-old winner of a duel, John Law.