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The Financial Crisis at the Beginning of the 18th Century System of Law

  • Korean Review of French History
  • Abbr : KRFH
  • 2007, 16(0), pp.5~42
  • Publisher : KOREAN SOCIETY FOR FRENCH HISTORY
  • Research Area : Humanities > History

Yoon Eun Joo 1

1서울대학교

Accredited

ABSTRACT

This article aims to follow the development of the system of Law and to reveal the cause and effect of its failure. The objective of this system, economic and financial reformations planned and realized by John Law under the Regence, was not only to get over the financial crisis at the beginning of the 18th century but also to reinforce the royal authority and to enrich the kingdom. If it succeeded, his system, appeared as a network combining bank-commerce-royal finance, could have relieved the kingdom from the chronic financial crisis and innovated the economic structure. But, the system which had to alter the initial aspects against the political and social resistance, caused extremely high inflation. After all, the 17 December 1720, John Law gave up his places and his system went into liquidation. The failure of the system of Law brought about the worst. First, the financiers reorganized their forces and never allowed an attempt which could threaten their status and profit. The Parliament, throned as a leader of the public opinion, succeeded to upset all the reformations that the king and his ministry put forward.

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