John Law’s Mississippi Company was central to the Mississippi Bubble crash of 1720.
Law was a Scottish financier who became controller general of finances in France. His company, originally linked to trade and colonization in the Mississippi region, gained control of tax collection and other commercial privileges. The company’s shares became the focus of intense speculation in Paris.
Law’s system connected company shares with paper money issued by the Banque Générale, later the Banque Royale. Rising share prices encouraged investors to exchange precious metals and other assets for paper claims. The arrangement became unstable when confidence weakened and holders rushed to sell shares and redeem banknotes.
The bubble collapsed in 1720, ruining many investors and discrediting Law’s monetary experiment. The Mississippi Company is often compared with Britain’s South Sea Company, whose own bubble burst in the same year. The two episodes were separate schemes, even though both reflected Europe’s early modern enthusiasm for publicly traded monopoly companies.