John Law founded the Mississippi Company at the center of France’s 1720 stock-market bubble.
Law was a Scottish financier who became influential in France under the regent Philippe II, Duke of Orléans. His company, originally associated with the Mississippi Company, gained control of valuable colonial trading privileges and was later linked with a broader system combining company shares, banknotes, and government finance.
Investors in Paris bought shares enthusiastically, driving prices far above levels supported by the company’s actual colonial commerce. Confidence collapsed in 1720 as doubts about the company and the paper currency spread. Law fled France, and the episode severely damaged trust in paper money and large financial schemes.
The Mississippi Bubble and Britain’s South Sea Bubble were distinct events, though both burst in 1720. Another common confusion is calling Law a central banker in the modern sense; his Banque Générale, later the Banque Royale, operated within a very different monetary and political system.