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

pamphlet entitled
Money and Trade Considered with a Proposal for Supplying the Nation with Money.
It was published anonymously in 1705 by Andrew Anderson of Edinburgh, a company owned at the time by Law’s aunt. A poster advertising the main points of Law’s argument was prominently displayed in local meeting places. His name did not appear on the proposal, perhaps to avoid marring its chances of success with his tarnished reputation; but in circles of influence, Law’s authorship was soon common knowledge.
    Economic historians still marvel at the extraordinary clarity of expression—that is, they say, remarkable for its time. Law begins by explaining the meaning of value, which he says is related to rarity rather than use. “Water is of great use, yet of little value, because the quantity of water is much greater than the demand for it. Diamonds are of little use, yet of great value, because the demand for diamonds is much greater than the quantity of them.” He then looks at the meaning of money and argues that “money is not the value
for
which goods are exchanged, but the value
by
which they are exchanged: the use of money is to buy goods, and silver while money is of no other use.” This vision of money as a functional medium—with no intrinsic value but backed by something of stable value, the gambler’s chips that can be cashed in at the end of the evening—leads him to his central suggestion, for a bank with the power to issue notes using land as security.
    To his friends the argument was convincing, and the Duke of Argyll brought it to the attention of the Scottish Parliament. At the next sitting, on June 28, 1705, the main business under consideration was the question of union between Scotland and England: in view of Scotland’s economic ills, worsened by the Darien scheme, the union was now widely seen as advantageous. Law’s scheme was also to be discussed, along with another proposal by the eminent Dr. Chamberlen, who was already well known in Scotland and England for his financial schemes.
    Despite Law’s hopes, the past weighed heavily against him, and his proposal sparked an explosive response. William Greg, an agent working for the English government who watched proceedings, was highly dismissive of Law, “a gentleman who of all men living once was thought to have the worst turned head that way,” and wrote off the pamphlet as the “homespun” proposal of a “rake.” Two days later, when Parliament again convened to discuss the two schemes, Law became ensnared in the complexities of Scottish politics.
    One of the parliamentary factions, the Squadrone Volante, opted to support him, but he was fiercely opposed by the national party, headed by Andrew Fletcher of Saltoun. George Baillie of Jerviswood, a member of the Squadrone, proposed Law’s scheme, “in his opinion, a more rational and practicable scheme than that of Dr. Chamberlen.” Few agreed. Fletcher, an irascible man, scornfully retorted that he thought it “a contrivance to enslave the nation” and demanded that the two men be brought before Parliament to reason and debate the matter openly.
    Rushing to Law’s defense, the Earl of Roxburghe, also of the Squadrone, declared he did not see why Law, who had spent “some considerable time purely to serve his country,” should be forced to appear against his will; he should be treated “with good manners if not encouragement.” According to one witness, Fletcher was so furious at what he took to be an accusation of ill manners that had he been near Roxburghe “they would have gone together by the ears.”
    Argyll, who was presiding over the meeting, ordered that Fletcher and Roxburghe be confined in their chambers to avoid the row continuing after the debate. Roxburghe, “mannerly and respectful,” allowed himself to be arrested. Fletcher, who famously boasted “that he never made his court to any king or commissioner,” proved more elusive. Surreptitiously leaving the