Billet de Banque de 1000 Livres. black. No 777963. Bottom right corner cut to cancel the note. John Law first urged the establishment of a national bank to issue banknotes backed by land, gold, or silver long before his moving to Paris. It was one of his recommendations for Scotland in his 1705 publication entitled "Money and Trade Consider'd with a Proposal for Supplying the Nation with Money". The Scots rejected Law's ideas and it would take another decade for him to do the same suggestions again, this time to the French regent, Philippe d'Orléans. This time, Law had more success. In 1716, he established the Banque Générale, a private bank, but 3/4 of the capital consisted of government bills and government-accepted notes, effectively making it the first central bank of the nation. In 1718, this bank, now renamed 'Banque Royale', issues its first famous 'billets de l'Etat' in (partial) replacement of the King's (and thus the nation's) gigantic bond debt. Hence their name '(bank)notes of the nation'. They are the first official French banknotes and a key revolution in worldwide finance. While officially backed by gold and silver in the bank's safes, it didn't take very long before the French discovered this was only partially the case. The 1720 panic caused a run on the bank and the - temporary - end of fiduciary money, as well as the end of the career of John Law, who fled the country overnight.
Themes: BANKING, BEFORE 1800, CITY & STATE BONDS
Date: 1 January 1720
Startprice: € 300