John Law was the French financier whose Mississippi Company bubble collapsed in 1720, causing a major market crisis in France. Law promoted paper money and a company linked to the French Louisiana venture while serving as a powerful financial adviser to the regent.
The Mississippi Company absorbed trading privileges and large amounts of government debt. Investors bought shares in expectation of immense riches from North American commerce, while the company’s promotional claims greatly exceeded its proven earnings. The share price rose rapidly in Paris.
Confidence weakened when investors sought to convert paper assets and company shares into hard money. A rush to sell followed, and the system collapsed. Law lost political influence and left France, while the crisis left deep suspicion of paper currency and speculative company finance.
The Mississippi Bubble occurred in the same year as Britain’s South Sea Bubble, but the schemes operated in different countries and under different institutions. Their parallel collapses helped make 1720 a landmark year in financial history.