Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance Page 12
Of the fabled Mississippi investors who came from modest backgrounds the most spectacular success was that of the widow Chaumont from Namur, who came to Paris to collect a debt, which was paid to her in billets d’états. She invested them in Mississippi stock and swiftly made several million livres. She spent part of the proceeds buying the Château d’Ivry, and every week held legendary banquets where guests consumed “an oxen, two calves, six sheep and numerous fowls.”
Law’s own coachman was said to have made such profits that he tendered his resignation, having employed two drivers, one for himself and one for Law—he offered his ex-employer first choice. Another much-recorded incident relates the story of an exquisitely dressed woman who was observed descending from an immaculate carriage. When the aristocratic spectators asked who she was they were told “a woman who has tumbled from a garret into a carriage.”
Many of the servants who grew wealthy did so when their employers commissioned them to sell on their behalf at a certain sum. Often they arrived at the rue Quincampoix to find the price far higher than expected, in which case they could pocket the difference and use it as capital to trade. One of the many diarists of the time tells of a gentleman who sent his servant with 250 shares and instructions to sell at 8,000 livres. The servant sold them for 10,000, making a profit of half a million livres in a morning, then reinvested and a few days later found himself worth 2 million.
By October the share price was 6,500 livres. The rise was not, however, without vacillation. In the tumult of rue Quincampoix, traders operated independently and unregulated; prices at one end of the street varied dramatically from those at the other, and fortunes made in one hour could be reversed during the next. The Princess Palatine, the regent’s mother, recalled wryly that when the royal physician, Monsieur Chirac, heard that his stock had fallen dramatically he muttered, while taking a patient’s pulse, “Good Lord, it’s going down, it’s going down.” Fearing she was about to die, the lady began to sob. Chirac hastily consoled her: “Your pulse is splendid and you are quite well. I was thinking of the Mississippi shares on which I am losing because they are going down.”
Along with the share-trading frenzy came an orgy of property speculation. Houses in the rue Quincampoix were bought or let by the shrewdest businessmen “foreseeing from the commencement that the ground of the street would rise in value to such an extent, that ten square feet might bring in the income of a lordly estate.” Property previously let at up to 800 livres per annum could be divided into twenty or thirty tiny offices and each sublet at up to 400 livres a month, a sum equivalent to an average craftsman’s annual salary.
Lean-to shacks were erected in alleyways and on rooftops and rented out for vast sums. As the throng continued to swell, local innkeepers, confectioners, and chefs charged huge prices for their services. Cafés opened nearby where aristocratic ladies and gentlemen could sip their tasse of coffee or chocolate and play quadrille while their brokers made them rich. All usual constraints of value were lost: a single chicken was said to change hands for 200 livres, and in one of the most bizarre and often repeated legends of the time, a hunchback was said to have earned 150,000 livres in a few days by leaning against a mulberry tree and renting out his hump as a writing desk on which to sign contracts.
A golden key, so the saying goes, opens any door, and many craved social acceptance along with their newfound wealth. Saint-Simon recorded the desperate lengths to which some would go to improve their status. The wealthy Mississippian d’André, who “had made mounds of gold,” used some of it to betroth his three-year-old daughter to the thirty-three-year-old Marquis d’Oyse, paying 600,000 livres and undertaking to make further annual payments of 20,000 livres until the child reached twelve, when an enormous estate would be made over as a final payment and the wedding would take place. The deal so amazed the haut monde that the lawyer Marais wrote in his diary, “The babies of Mississippians now cry for marquis instead of dolls.” D’André was one of many who subsequently lost his fortune, and the contract ended in an acrimonious lawsuit that was still dragging on fifteen years later.
Predictably Mississippians were drawn to unbridled luxury: a fine carriage trimmed with crimson velvet and gold fringing became the badge of success in the same way that a Rolls-Royce, Mercedes, or Ferrari broadcasts prosperity today. The age-old symbols of wealth—jewels, expensive clothing, gold, silver, property, and prestigious furnishing—were avidly sought. A window into this world of unabashed materialism is revealed in the paintings of Watteau, in which flamboyant figures in shimmering pastel silks pose in stagey fêtes champêtres or, as in the famous painting L’Enseigne de Gersaint, shop for works of art. The diplomat Daniel Pulteney gasped at the excess: “It is certain that the commerce of people here increases every day and that all manner of luxury does too; the Hollanders have drawn several millions from hence for jewels, lace and linen; I was told yesterday that one shop had sold in less than three weeks lace and linen for 800 thousand livres and this chiefly to people who never wore any lace before.” Defoe was similarly staggered by Parisian consumer frenzy: “Money,” he said, “flows like the waters of the Seine.”
Goldsmiths and silversmiths, whose business had languished in the wake of Louis XIV’s financial crisis, now found themselves inundated with orders. Within three months, 120,000 silver plates and matching dishes to a total value of more than $11 million had been cast, chased, engraved, and sold. The weavers at tapestry workshops in the Gobelins, in the provincial town of Aubusson, and in the Savonnerie carpet factory were deluged with commissions. Porcelain, another eye-catching, luxurious status symbol, was imported in vast quantity to fill the tabletops, cabinets, and walls of the elegant salons of the newly rich. The ateliers of furniture makers such as Charles Cressent and the Boulle brothers, sons of the great Charles André, pandered to the burgeoning craving for articles of unrivaled ostentation and intricacy. Showpiece commodes, bureaux plats, and cabinets were expensively veneered in exotic tropical timbers such as amaranth, kingwood, and satinwood—imported in Mississippi Company vessels—and further embellished with gilded nymphs and goddesses writhing among lush foliage. Such objects embodied prestige, bounty, status—the universal message of wealth both old and new. Summing up the prevailing mood, the regent’s doughty mother wrote, with a note of apprehension, “It is inconceivable what immense wealth there is in France now. Everybody speaks in millions. I don’t understand it at all, but I see clearly that the god Mammon reigns an absolute monarch in Paris.”
11
THE FIRSTMILLIONAIRE
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)
WHILE PARIS 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 progra
m 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.