Banque Générale

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Post by kosovohp on Fri Oct 29, 2010 11:05 pm

At this time, Cantillon became involved with British mercantilist John Law through the Mississippi Company.[15] Based on the monetary theory proposed by William Potter in his 1650 tract The Key of Wealth,[16] John Law posited that increases in the money supply would lead to the employment of unused land and labor, leading to higher productivity.[17] In 1716, the French government granted him both permission to found the Banque Générale and virtual monopoly over the right to develop French territories in North America, named the Mississippi Company. In return, Law promised the French government to finance their debt at low rates of interest.[18] Law began a financial speculative bubble by selling shares of the Mississippi Company, using the Banque Générale's virtual monopoly on the issue of bank notes to finance his investors.[19]

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