Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance by Janet Gleeson Page B

THE MASSIVE DOUBLE DOORS to the rue St. Avoye stood open. Inside, a handful of clients conversed idly in the vestibule before drifting toward the
grande salle
to conduct their business. It was late summer 1716 and, as usual, the bank was quiet.
    Later that morning a carriage arrived that was far from ordinary or expected. A few customers glimpsed it slowing to turn into the narrow, arched entrance to the street. They must have recognized the livery of the coachman and the servants inside as that of the Duc d’Orléans. The servants got out carrying metal-bound coffers, which they took into the bank and placed on the counter. Then an equerry stepped forward to unlock them. Inside each chest was a mass of gold louis d’or and silver écus, which the regent wished to entrust to the bank. The total value was a million livres.
    The bank’s other customers were transfixed. For the regent to invest such a sum in a bank that was at present the subject of mockery in many quarters was astonishing and significant. They did not know that the regent and the bank’s director John Law had contrived that the deposit be made as conspicuously as possible: public awe was precisely the effect for which they strove. It would boost confidence in the ailing bank and its paper banknotes.
    The ploy worked. Within days the press had reported that the regent had such faith in John Law’s new bank that he had deposited a million livres in its vaults. The previously hostile
Gazette de la Régence,
which had predicted “[Law’s] bank will not succeed” and “no one talks of Mr. Law’s bank except to joke about it,” now remarked on “an order the other day from the mint to send a million to M. Law’s bank, that the Regent supports and is really his bank under the name of this Englishman. Everyone believes that it will hold up because royal funds are going in to it.” Royal patronage, as John Law was only too aware, was the most potent of marketing tools.
    Yet after Louis XIV’s death, Law had been disappointed by the protracted process of establishing his bank. On his accession as regent, Orléans had dismissed Desmarets and, in line with his new system of government by aristocratic councils, made the Duc de Noailles head of the finance council. Noailles was energetic, shrewd, and ambitious but indecisive and innately distrustful of anyone who might threaten his position. Louis de Rouvray Saint-Simon, a French writer, courtier, member of the Regency Council, and friend of the regent, whose forty-one volumes of memoirs provide a fascinating insight into the key personalities and events of the time, observed that “in spite of his intellect, the multitude and mobility of his ideas and views, which successively chased each other off either wholly or in part, made him incapable of concluding any work of his own; neither was he ever satisfied with work done for him.” He was a hard and insidious taskmaster, and when the regent introduced Law as someone whose ideas were worth considering, Noailles was instantly suspicious. He nodded and muttered superficial encouragements but inwardly viewed Law as “an intruder put by the hand of the Regent into their administration” and hence, according to Saint-Simon, “long bandied [him] from pillar to post.”
    Noailles found France’s financial crisis far worse than anyone had imagined. The country’s debts, estimated at over 2 billion livres, incurred interest repayments of 90 million; the tax system that should have covered the repayments of interest on the debt was so staggeringly inefficient and riven with corruption that the income was swallowed up three or four years in advance. Having studied the books, Noailles summed up the monetary morass: “We found the estate of our Crown given up, the revenues of the state practically annihilated by an infinity of charges and settlements, ordinary taxation eaten up in advance, arrears of all kinds accumulated through the years, a multitude of notes,