The Mississippi Scheme

⁷⁸ John Law thought that Scotland’s industry languished for the lack of money to employ it. He proposed to remedy this lack by establishing a bank which would issue paper based on the whole value of all the lands in the country.

The Parliament of Scotland rejected his proposal. The Duke of Orleans (Regent of France) adopted it with some variations.

The idea of multiplying paper to almost any extent was the real foundation of the Mississippi scheme.

• It was the most extravagant project of banking and stock-jobbing in the world.
• It is explained fully by Joseph Paris Duverney in his Examination of the Political Reflections on Commerce and Finance of Mr. du Tot that I shall not give any account of them.

Its principles are explained in a discourse on money and trade by John Law himself.

• He published it in Scotland when he first proposed his project [ Money and Trade Considered: With a Proposal for Supplying the Nation with Money ].

The splendid but visionary ideas on those principles still continue impress many people. It perhaps contributed to that excess of banking in Scotland and in other places.