HISTORY: THE FIRST MILLIONAIRE

SOME say it's the root of all evil, for others it makes the world go round. Right now, for most of us, there's not enough of it to make ends meet. Today, however, one Scots couple are awash with it. As they celebrate their £160m Euromillions' win, it's unlikely Largs pair Colin and Chris Weir will be aware that they are following in the gold-plated footsteps of another Scot.

John Law is considered to be among the world's very first self-made millionaires - he's even said to have helped create the word - a charming, charismatic, if flawed, character who, hundreds of years before the likes of Sir Fred Goodwin was busy bringing down a nation's finances all by himself.

Edinburgh-born Law not only made millions but he lost them too and, in a curious mirror image of certain modern events, it was his ill-judgement in American investments that sparked the globe's first stock market crash. But there is more than that, he virtually invented the paper bank note.

Law was born in a goldsmith's luckenbooth in St Giles' in the Royal Mile in 1671. His father, William, had made a fortune through money-lending, so while John was still young the family was able to leave the stench of the Old Town for the glorious surroundings of Lauriston Castle.

When Law's father died suddenly, the young man inherited his wealth. But while the dashing Law had a flair for maths, he had a bigger interest in gambling and frittered away his legacy in London until, faced with debtors' prison, his mother had to bail him out.

Law wasn't put off, though. Instead he used his brilliant mathematician's mind to research laws of probability which he then used against gamblers to give him a winning edge.

But this was a murky, dangerous world where disputes often flared. Luckily Law was an excellent swordsman, which he demonstrated when he was challenged to a duel by a love rival, his first defensive lunge being decisive.

He was convicted of murder in 1694, aged 23. But Law's charisma and charm meant he escaped the death sentence and fled to the Continent.

In France he set his mind to solving something that had challenged economists and financiers for ages: how to 'make' money.

There was a shortage of gold and silver and economies desperately needed an alternative. While alchemists strove to turn base metal into gold, Law was considering a less challenging alternative - paper money.

No-one was interested but Law understood the limitations of using reserves of precious metals. When his ideas were rejected back home in Edinburgh too, he had to wait until France was gripped by financial disaster, then his idea was welcomed with open arms.

According to Janet Gleeson, whose book Millionaire: The Philanderer, Gambler and Duelist who Invented Modern Finance, Law was a "visionary financial hero".

"He was big in every sense, over six feet tall with ambitions that were larger and more daring than anyone else's," she notes. "On one level his story is the stuff of romantic legend. But his ideas and actions invest his life with far more significance than that of a beguiling and ambitious playboy: the things Law made happen still have resonance today."

Certainly France in 1715 was a country willing to gamble on his paper money theory. With support of the Duc d'Orleans, Regent for the infant French King, Law gained permission to set up the first Bank of France and a trading company in Louisiana at a settlement he named La Nouvelle Orleans, New Orleans.

He issued customers with the new paper money to buy shares in his trading company. Louisiana, he said, was rich in gems and metals - people across Europe fought to invest.

Shares that started at 500 livres each, quickly doubled, and then marched from 1000 to 10,000 livres. When they hit the millions, the term 'millionnaire' was coined.

Edinburgh historian Michael Turnbull, who researched Law for his book, Edinburgh Portraits, says: "He acquired over 20 landed properties in France, he had a collection of jewels, a library of 45,000 books and wine cellars and held the post of King's Secretary, and received the Freedom of the City of Edinburgh."

But while his financial theory may have been sound, his claims about Louisiana's potential were less so. Soon people realised the land was more or less one vast swamp.

By 1720 it had all gone horribly wrong, the French currency was in tatters and Law's 'system' had collapsed.

He was chased through the French streets, plunging from celebrated 'millionnaire' to outcast and house arrest before fleeing France.

And by the time he died in Venice in 1729, Scotland's millionaire money maker was virtually penniless.

CREAM OF THE CROP

Top of the Scots has to be the fabulously rich Andrew Carnegie, whose wealth from American industry earned him around $400 million in 1901 - around dollars 300 billion by today's standards - before the Dunfermline-born industrialist gave vast sums away.

Entrepreneur Tom Hunter is among the wealthiest Scots, although the global financial crash is said to have halved his GBP1 billion fortune. Earlier this year, North Sea tycoon Sir Ian Wood was named as Scotland's first oil billionaire, but even he is still not as well off as former United Arab Emirates ambassador to the UK, Mahdi al Tajir, the Scottish-based businessman who owns the Highland Spring mineral water firm and is worth just over £1.5bn.

Edinburgh-based Harry Potter author JK Rowling has an estimated £530m fortune.
Edinburgh Evening News 18 July 2011