Beschreibung:

LAW, John (1671-1729). Letter signed ('Law') to an unidentified recipient, Paris, July 1720 (the specific day of the month left blank, but after 13 July). In French, 1½ pages, 310 x 205mm, docketed by recipient. Attempting to save his financial system from collapse . Law's letter refers to a letter from the Regent and an order of the council of state concerning bank accounts and the instructions on how to keep them: 'I have to tell you that His Royal Highness very much desires the execution of this design, and you will be very much obliging him in taking great care in supporting it; you will also be so kind as to inform me with your usual exactitude of the success it achieves and the difficulties with which it meets so that I can inform His Royal Highness'. In April 1720, Law had been promoted surintendant des finances , and for the following two months he held the entire financial (and arguably political) power of France in his hands: however, in the course of May the falling price of shares in the Mississippi Company (which underpinned Law's Banque Royale) led to a rush to convert paper money to specie, causing bank closures and riots. Law was dismissed on 27 May and placed in protective custody, only to be reappointed on 2 June with added responsibilities. The present letter and the arrêt of 13 July to which it refers were a crucial element in Law's legislative strategy to shore up his financial system by converting up to 600 million livres of banknotes into bank accounts and making it compulsory for any transactions over 500 livres to take place by transfers between these accounts. At the same time, in order to restore confidence in the scarcity of paper money, more than 700 million livres of banknotes were burnt in public between late June and August. These efforts were unavailing and with the total collapse of his system Law was obliged to offer his resignation on 9 December 1720: he fled the country shortly afterwards, initially to the Austrian Netherlands, and subsequently to Venice.