This has reference to "washing," so-called. (See " Wash Sales.")
Law, John. A Scotch financier and an advocate of paper currency. In May, 1716, he founded in Paris, France's first banking institution, the Banque Generate, and issued paper currency in accordance with his views. These notes were accepted in payment of taxes, and soon were at a premium. In 1717 the French Government gave him control of Louisiana for the purposes of trade and colonization, and the Compagnie d'occident was formed accordingly. It was commonly called the "Mississippi Company," but afterwards became known as the "Mississippi Scheme," or " Bubble." Later, the East India, China, and Africa companies were absorbed, and the company took over the control of the Mint, besides the powers of " Receivers-general," thus becoming of vast importance in foreign commercial affairs, as well as home financial matters. The Banque Generale, in 1718, was changed to Banque Royale. In 1720, Law became Controller-general of Finance, and the company and bank became one. Prosperous conditions only continued for a short time, however, from the fact that there was an over-issue of paper money and the Government became antagonistic to Law's scheme, so in May, 1720, after a tremendous speculative craze, a complete collapse occurred and Law left the country.