LAW, J. Considérations sur le Commerce et sur l’Argent. Par Mr. Law, Controlleur Général des Finances. Traduit de l’Anglois. A La Haye, Chez Jean Neaulme, 1720. With the frontispiece portrait of the author, title printed in red and black. Frontispiece, (8), 189, (misnumbered: 1-168, 167-187), (19, publisher’s catalogue) pp. 12mo. Modern marbled wrapper, held in a cloth clamshell box, label with gilt lettering to spine, a very nice and uncut copy.
Kress 3235; Goldsmiths 5820; Einaudi 3274; Mattioli 1948; Carpenter, IX, (4); European Americana, 720/139.
Very rare first edition in French of Law’s major work, Money and Trade Considered …, which is extremely rare in the first English edition of 1705.
A fugitive from justice in 1694 for killing a man in a duel in England, Law travelled extensively throughout Europe, observing and gaining experience in banking, insurance and finance. He proposed a number of unsuccessful schemes to set up a national bank of issue in Paris (1702), Edinburgh (1705), and Savoy (1712), finally attaining success in France with the establishment in 1718 of the Banque Royale. His monetary strategy included the management of public debt and colonial expansion. In 1717 the French crown created the Compagnie d’Occident, well known as the Compagnie du Mississippi. By converting state notes into its shares, the Company extended its rights over the economic exploitation of Louisiana. In August 1718 it acquired the monopoly over tobacco, and in 1719 it absorbed other French trading companies, obtaining control of mint, payment of the national debt, and receipt of tax revenues. In 1720 the company was united with the Banque Royale, and Law became contrôleur-général, and they had the complete control of colonial trade, currency, banking, and the fiscal system. The Compagnie d’Occident (or Company of the West, as it was also called), owned the trading rights and concessions to half of the land mass of the United States excluding Alaska. It was a territory running from the Gulf of Mexico to Canada, bounded by the Spansih held Texas on the West and the English held Carolinas on the East. The development of the company and John Law’s management made him, at a certain point, exercise control over half the United States !
The present work is his most important work, giving a detailed account of his plan to replace specie with a paper currency based on land and of his proposals for a state bank.
Law’s theories on money and banking are principally contained in Money and Trade Considered. Like other eighteenth-century writers Law adopted a disequilibrium theory of money, viewing it as a stimulant to trade. In a state of unemployment, Law maintained that an increase in the nation’s money supply would stimulate employment and output without raising prices since the demand for money would rise with the increase in output. Moreover, once full employment was attained the monetary expansion would attract factors of production from abroad, so output would continue to increase.
According to Law, a paper-money standard was preferable to one based on precious metals. Suitable candidates for the money supply included government fiat, bank notes, stocks and bonds. Since the primary function of money was as a medium of exchange, it could best be served by a commodity (paper) not subject to considerable fluctuation in value and high-resource costs. Thus Law advocated the establishment of note issuing national banks that would extend productive loans (real bills), providing sufficient currency to guarantee prosperity.
“John Law (1671-1729), I have always felt, is in a class by himself. Financial adventurers –but is it fair so to call that adminitrative genius? -often have a philosophico-economic system of sorts. (…..) But Law’s case is different. He worked out the economics of his projects with a brilliance and, yes, profundity, which places him in the front rank of monetary theorists of all times” (J.A. Schumpeter, History of Economic Analysis, p. 295).
“…..he is in the twenty-first century judged as a theorist of economics and a precursor of schemes of managed money and “Keynesian” full employment policies” (Encyclopedia of the Enlightenment, vol. 11, p. 369).
– The last 19 unnumbered pages contain: Catalogue des livres nouveaux et autres, qui se trouvent à La Haye chez Jean Neaulme.