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==Law's System== {{Main|John Law's Bank|John Law's Company}} [[File:Vonnis van Apol over de bubbels..jpg|thumb|''Judgement of Apollon over the bubbles'', satirical Dutch pamphlet published in 1720 about that year’s near-simultaneous speculative bubbles in Paris, London, Amsterdam and other European financial centers]] John Law's system, first endorsed by the Regent [[Philippe II, Duke of Orléans|Philippe d'Orléans]] in May 1716 and developed from then in increasing ambitious stages until 1720, rested on the expansion of monetary supply<ref name="Velde07">{{Cite journal |last=Velde |first=François R. |date=May 2007 |title=John Law's System |journal=American Economic Review |volume=97 |issue=2 |pages=276–279 |doi=10.1257/aer.97.2.276 |jstor=30034460}}</ref>{{rp|277}} through the creation of [[fiat money]] and a complete overhaul of the French state's [[Tax revenue|revenue collection]], [[Coining (mint)|coinage]] and [[Government debt|borrowing]], all of which were centralized in Law's Company.<ref>{{Cite book |url=https://books.google.com/books?id=0kduEtlToecC&pg=PA105 |title=John Law |author=Antoin E Murphy |publisher=Oxford U. Press |year=1997 |page=105|isbn=9780198286493}}</ref> Along the way, Law's Company absorbed all [[List of French colonial trading companies|French colonial trading companies]] which had developed in fits and starts over the previous century, and started an unprecedented colonization of its own in [[Louisiana (New France)|Louisiana]] with the foundation of [[New Orleans]] in 1718. It was renamed the ''Compagnie des Indes'' (Indies Company) in 1719, and in February 1720 absorbed the bank that Law had initially established in May 1716. Law's social standing rose with his financial heft. On {{date|1719-9-17}}, he converted to [[Catholicism]] in the low-profile {{ill|Convent of the Recollects (Melun){{!}}convent of the Recollects|fr|Couvent des Récollets de Melun}} in [[Melun]]. On {{date|1719-12-2}}, he was elected an honorary member of the [[French Academy of Sciences|Royal Academy of Sciences]].{{R|Buchan|p=244}} The Regent then appointed Law as [[Controller-General of Finances]] on {{date|1720-1-5}},<ref name=Beaurepaire>{{citation |author=Pierre-Yves Beaurepaire |title=La France des Lumières 1715–1789 |publisher=Belin |location=Paris |date=2011}}</ref>{{rp|81}} effectively giving him control over external and internal commerce. As Controller-General, Law instituted many reforms, some of which had lasting effects, while others were soon abolished. He tried to break up large land-holdings to benefit the peasants; he abolished internal road and canal tolls; he encouraged the building of new roads, the starting of new industries (even importing artisans but mostly by offering low-interest loans), and the revival of overseas commerce — and indeed industry increased by 60 per cent in two years, and the number of French ships engaged in export went from 16 to 300.<ref>Will and Ariel Durant, ''The Age of Voltaire'', Simon & Schuster, 1965, p. 13.</ref> The system started to unravel in 1720 as price inflation started to surge.<ref name=nyfed>{{Cite web|url=https://libertystreeteconomics.newyorkfed.org/2014/01/crisis-chronicles-the-mississippi-bubble-of-1720-and-the-european-debt-crisis.html|title=Crisis Chronicles: The Mississippi Bubble of 1720 and the European Debt Crisis -Liberty Street Economics|website=libertystreeteconomics.newyorkfed.org|date=10 January 2014 }}</ref> Law sought to hold the Indies Company's share price at 9,000 livres in March 1720, and then on 21 May 1720 to engineer a controlled reduction in the value of both notes and the shares, a measure that was itself reversed six days later.<ref name="Buchan97"/>{{rp|147}}<ref name="RSA91">{{Cite journal |last1=Lande |first1=Lawrence |last2=Congdon |first2=Tim |date=January 1991 |title=John Law and the invention of paper money |journal=RSA Journal |volume=139 |issue=5414 |pages=916–928 |jstor=41375433}}</ref>{{rp|920}}<ref>{{Cite book |last=Hayek |first=F A |title=The Trend of Economic Thinking |year=1991 |publisher=Liberty Fund |isbn=9780865977426 |page=162}}</ref> As the public rushed to convert banknotes to coin, Law was forced to close the Banque Générale for ten days, then limit the transaction size once the bank reopened. On {{date|1720-5-29}}, Law was dismissed as Comptroller-General of Finances.{{R|Buchan|p=285}} The queues grew longer, the Indies Company's stock price continued to fall, and [[food prices]] soared by as much as 60 per cent.<ref name=nyfed/> At the end of 1720, the Regent eventually dismissed Law as Controller General<ref name=nyfed/> and as head of the Indies Company.
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