John Lo: biography and photos

John Lo is a Scottish financier, a prophet, an adventurer, a banking romantic, a loan wizard, the father of inflation - so people talked about him in the eighteenth century. At first this person turned France into one of the most prosperous countries in Europe, and then drove her into poverty. The first biography of the financier came out during his lifetime and was translated into many languages. The French called him Jean Lass. In other countries he was known as John Lo. This article will describe a brief biography of the financier.

Youth

John Lo of Loriston was born in Edinburgh (Scotland) in 1671. The boy's father was a jeweler and a moneylender. In 1683, the head of the family bought a small estate Loriston, which was attached noble title. In his youth, John was quite attractive, and he was happily welcomed into the best houses of Edinburgh. Thus, the future financier quickly "mastered all kinds of debauchery." Soon the young man became bored, and at the age of twenty he went to conquer the capital of England.

Speculation and duel

In London, John Lo immediately developed a violent activity. The ability to earn money he inherited from his father. John began with speculation in shares, jewelry and paintings. In addition, he came up with his card game system. This brought a lot of money to Lo. John also enjoyed tremendous success with women and was not very selective in his love affair. His next intrigue ended in 1694 with a duel. Luo killed his rival and was arrested. At the trial, the future financier was sentenced to death. But John escaped from prison and went to Amsterdam. In general, the hero of this article was very lucky.

Change of activity

Arriving in a new city, John Law closely engaged in the study of economic theory. On this subject the young man re-read quite a few authoritative works. Soon he published his book. There the financier spoke about the main reason for the economic stagnation. According to Lo, it was a lack of money. To solve this problem, John proposed to put into circulation paper banknotes and provide them with gold. And it is best that the public institution should be responsible for issuing banknotes. This idea was proposed by the financier to be used by almost all European countries. But it was possible to realize it only in one state.

Implementing an idea

In 1715, after the death of the monarch, the treasury of France was utterly empty. Philip of Orleans (regent with the great-grandson of Louis XIV) was shocked after calculating the national debt. It turned out that this figure reached 3 billion livres. And annual taxes and taxes brought only 250 million. Although according to the report of the Chief of the Secret Police, this amount was three times higher. Just 500 million settled in the pockets of various bureaucrats.

According to the regent, in such a difficult situation only the John Law system could help. Already in the middle of 1716 the hero of this article opened a bank (though not state, but joint-stock) with the right to issue paper money. At the same time, bills were freely exchanged for coins from precious metals on the real face value at the date of issue, and also were accepted for payment of taxes and taxes. That is, John's banknotes have become more solid than silver and gold money.

At that time it was an unprecedented adventure. To ensure all Lo's issued bills in France simply did not have the required amount of silver and gold. Nevertheless, 12 months after the start of the emission of banknotes in France, there was an economic upturn. Construction was resumed, industry developed, trade revived, and loans were given at low interest.

Another company

But the bank was not the only idea of the Scotsman. In the beginning of 1717, John Law established the "Company of India". The capital of this company Lo wanted to invest in the development of the Mississippi River Basin. The French called her Louisiana in honor of King Louis XIV. In history, this event came in as a Mississippi company.

At the end of the summer of 1717, John announced the placement of 200 thousand shares. Conditions were very profitable: at a denomination of 500 livres, the papers were sold for only 250 with guaranteed repurchase in six months at the initial price. The company's shares were sold out instantly. Six months later, their market value was many times higher than the nominal value. Having redeemed all the securities, John put in his pocket a solid jackpot. Soon, Lo companies gave the monopoly right to trade "the two Indies." This only increased the market value of securities and increased their demand for them.

First Stock Exchange

Issue of 50 thousand shares - that's what John Lo soon announced. After the method applied last time, the financier decided to earn more. Demand was six times higher than the offer, as 300 thousand applications were received for the purchase of securities. Counts, marquises, dukes, barons and viscounts besieged the financier's house, wanting to become part of the Indian wealth. Due to this, the Scot's secretary made a fortune, receiving bribes from them.

Spontaneously there was a secondary market of securities. In fact, it was the first stock exchange. Seeing an additional source of profit, John organized next to his house pavilions. In them, shares hired by Luo hired people, now called "brokers".

The rate of securities grew exponentially. Part of this contributed to the fact that the company was headed by the head of state Duke of Orleans. The prosperity of the French grew with the increase in the share price. Of course, that's what John Law himself did well. The pyramid of the financier has reached the maximum point of growth. But the Scotsman did not think about it and "bathed" in money. He even bought himself a couple of expensive estates. And John got the title of Duke and became Minister of Finance (in fact, the second person in the country). But all the good things come to an end someday.

Lack of funds

Fascinated by the "Mississippi Company", John poorly controlled the management of the bank. And all his issue was for loans that were invested in the purchase of the company's shares. In turn, the "Company of India" regularly posted new issues of securities, purchasing state bonds for the money received. Thus, the company has become almost the only creditor of France. But the regent was happy with everything, and he demanded the release of more paper money.

Yes, and in the very "Company of India" things were not going very well. The development of the distant territories of Louisiana was rather slow. On the banks of the Mississippi, cities were actually built, expeditions were sent there and ships with settlers were sent. But significant return from this project was not observed at all. Only a few knew the real state of affairs. Because of the catastrophic shortage of immigrants, the regent ordered (by secret order) to send prostitutes, thieves and vagrants to America under escort. But a thoughtful advertising campaign inspired the French that the ships arriving at the ports of the country are clogged with fabrics, spices, silver and other foreign riches.

Crash

The first bell was the arrival of Prince de Conti in the bank. With him, he seized a whole pile of banknotes and demanded that they be exchanged for coins. John immediately turned to the regent and he persuaded the relative to keep the paper money. Although the case was widely publicized, almost no one gave it any significance, since Conti was not popular among the population. But the most prudent and cautious people began to exchange banknotes for silver and gold. And this is despite the authority that John Lo had at that time. The financial pyramid was soon to fall apart, as with each day the number of exchanges was growing.

A tiny reserve of precious metals melted before our eyes. At the beginning of 1720, Lo issued decrees that limited the exchange of notes. Also on paper money it was forbidden to acquire precious stones and jewelry. In May, banknotes were devalued twice, and then their exchange for coins was completely discontinued.

All-national hatred

The French immediately disliked Lo. Once a crowd of Parisians demanded from John to exchange bills for gold. Having received a refusal, angry citizens almost tore up the adventurer. In this connection Luo moved to the Palais Royal to live under the direct protection of the Duke. Soon the financier was removed from the state posts. Chancellor Dagasso, who was earlier dismissed because of resistance to the reforms of John, returned to the government of France. The first decree of the new post was the resumption of the exchange. From June 10, 1720, all the French went to the Royal Bank. After the beginning of the exchange, silver and gold began to be missed, and copper coins went into circulation. Poor people were happy about it. With each day of passion the bank flared up. On July 9, soldiers guarding the establishment lowered the grilles so that the crowd could not smash the building. People began throwing stones at them. In turn, the soldiers responded by shooting with rifles. As a result, one Frenchman was killed. And after a few days in the crowd trampled 15 people ...

In August 1720, the Royal Bank was declared bankrupt. Three months later, all his banknotes were canceled.

The Indian company did not go any better. The share price was falling rapidly. Parliament demanded that John Lo, as the organizer of the first financial pyramid, should be brought to trial and executed. But instead of the hero of this article, his brother William went to the Bastille. The guilt of the latter was not proven, and the relative of the financier went free.

Moving to Brussels

Well, John Lo left France at the end of 1720. The Scot went with his son to Brussels, leaving his daughter and wife. In the new city, John lived quite modestly. His only income was a pension paid by the Duke of Orleans (in France all the property of Lo was confiscated).

Unexpected offer

In 1721, the financier was in Venice. There he was visited by a Savoyard nobleman who introduced himself as a Russian government agent. He handed John a letter from one of Peter's advisers. In the letter, Lo was invited to the Russian service and promised a good advance. But then all the hopes of John were connected with the English court, where Russia was treated with great hostility. Therefore, the Scot decided not to take risks and avoided an answer. And then he hastily left Venice.

Last years

Lo left a few months after his departure, he hoped that the regent would call him back to France to help him overcome the crisis. But in 1723 the Duke of Orleans died, and the financier realized that he could not return there.

John Lo, whose biography was presented above, died in Venice from pneumonia in 1729. Before his death, the Scotsman wrote a book entitled The History of the Regency Treasury. But she saw the light only two centuries later.