Passions ran high. Two members became so exercised by the issue of paper money that they challenged each other to a duel. Finally, Law’s proposals were rejected: the forcing of paper money upon the country was deemed to be ‘unfit for this nation’. Instead of striking out on a radical solution to its economic difficulties, which arguably might have delivered the financial stability the country needed and with it independence, the Scottish Parliament chose the path of least resistance, concentrating instead on joining the country to England in the Act of Union. Under its terms, one Parliament of Great Britain would replace the two of Scotland and England. Self-rule would be ceded by a piece of paper; it could, just perhaps, have been established by paper banknotes.
For Law, this was a bitter blow. His theories remained academic and his future once more lay in exile. Without a royal pardon, he could not even return to Scotland if it was to be formally united to the English nation. Once more he appealed to the Queen; once more, on her government’s advice, she turned him down. Within weeks of the Scottish Parliament rejecting his scheme, it voted to appoint commissioners to arrange the union with England. Law was at heart a patriot who wanted to use his intellect to benefit his homeland. Thwarted, he could only turn his thoughts abroad, destined to circulate his economic theories among more accommodating heads of state who admired his genius and were content to ignore the youthful duel which had forced him into exile.
Within a few years, Harley’s new government in England, faced with the burden of its ever-growing war debt, turned to a man with no intellectual convictions whatsoever, but a burning desire to make money for himself.
CHAPTER III
Blunt Advice
George Soros became frustrated because his huge wealth seemed to give him no political influence in the West. He realized he needed to become a public personality. In the late summer of 1992, a time of great pressure on European institutions, he didso with a vengeance. He shorted, betting that the pound would not be able to hold its value against other currencies traded within the Exchange RateMechanism. On Sept. 16, with Soros and others selling pounds, the British government responded by raising interest rates 2 percentage points to attract buyers. By evening sterling had been forced from the ERM. Soros scooped up $1 billion from that escapade and became known all over the world as the Man Who Broke theBank of England. ‘I had no platform,’ he says today. ‘So I deliberately [did] the sterling thing to create a platform. Obviously people care about the man who made a lot of money.’Time.com, 1 September 1997
John Blunt was not a handsome man. He was fat and pompous, and a very different character from John Law. Unlike with Law, there would be no madcap chase for the wilder things in life, nor any occasion when, through gambling, he would have to sell his family home or be bailed out by his mother. He had one aim in life, which was to better himself through business. His would be a focused search for wealth and power. Unlike Law, he had no intellectual backbone – he simply had a desire to get rich quick.
But John Blunt did have one redeeming quality. Whilst he was loud and overbearing, he possessed great self-confidence, even charisma; he was on the make but charming – a man bursting with ideas and energy, who dominated any group. His gift was for making money, and he would prove himself to be an inspired promoter of companies. Within a decade he would become rich from backing a project to bring water into London, despite the rivalry of the New River Company, and another for the manufacture of linen. Within a decade, too, he would move closer to the political world, winning election in the City as a councillor in the Cornhill ward, which included Exchange Alley. Blunt was religious, a Baptist by faith, and as the years went by the three worlds of business, politics and religion would merge seamlessly to his advantage.
Blunt was the son of a reasonably well-off shoemaker in Rochester; but he had come up, if not the hard way, then via a route that was tougher than Law’s relatively privileged upbringing in Scotland. He had started his working life as a humble member of the Worshipful Company of Scriveners, serving his apprenticeship in Holborn, London. Fittingly, for someone who wanted to aim high, his company’s coat of arms was an eagle, coloured gold, standing on a red book, its wings raised, poised to soar. Blunt’s choice of profession may have been a deliberate step in his planned path to power and influence. The scriveners were originally a kind of legal assistant, calligraphers with a monopoly on the paperwork for buying and selling houses. Gradually this gave them inside knowledge of the business affairs of merchants and landowners, and they became brokers who negotiated loans, an early type of merchant banker or land speculator. Such was the range of their financial activities that they seemed to occupy no firm place in society; one scrivener might tidy up the legal affairs of large estates, to the chagrin of the lawyers, while another might make his living by acting as a moneylender.
It was, in all, a fitting profession for a man on the make. During his long apprenticeship to Daniel Richards in Birchin Lane, on the perimeter of Exchange Alley, where he wrote letters for a groat (or sixpence), Blunt built up a view of English society, steeping himself in the knowledge of who was rich and who was poor, and those who seemed well-to-do but were just keeping up appearances. But few scriveners became as rich as the goldsmith-bankers like John Law’s father, who could lend large sums on credit, and make much more in return. The motto of the scriveners through the years was Scribite scientes – ‘Write, learned men.’ For Blunt, this was just a means to an end. He wanted to be the exception to the rule that few scriveners rose to great wealth or eminence in the City. In 1689, at the age of twenty-five, he left his apprenticeship to seek out new opportunities. Within four months of leaving his apprenticeship, he was married, a first step on the ladder towards social respectability – the string of affairs which John Law had enjoyed was not for Blunt. His choice of bride was Elizabeth Court, who came from a solid Warwickshire family. Blunt had married above himself, but not indecently so. A second marriage further up the social scale, to the daughter of a former Governor of Bengal, would come later.
Blunt was seeking his fortune in an England humming with new ideas. In the 1690s, the moneyed-men, grown rich on lending to the government, had begun to promote an extraordinary range of companies. The catalyst had been the success of a sea captain, one Captain Phipps, who had salvaged Spanish silver by the ton and precious jewels by the sackful from the bottom of the sea off the island of Hispaniola in the West Indies. He returned to England in triumph and to an instant knighthood: his backers had made an extraordinary 10,000 per cent profit on the adventure, a sum close to £200,000 – many millions of pounds today. Inspired by the captain’s success, copycat diving companies had arisen by the dozen, many of which came to London to show off their new deep-sea devices in a public demonstration on the Thames. The novelist and pamphleteer Daniel Defoe invested, and lost, £200 in one diving firm; he also owned a brick and tile factory on marshland near Tilbury, and, more quixotically, seventy civet cats – a leading scientist had once advocated breeding them for the secretion of their glands, which was a basic essence in the manufacture of perfume. The many other projects calling for investors to back them ranged from the Night Engine Company, which patented a burglar alarm, to the ‘Company for the Sucking-Worm Engines’ which had invented a machine to put out fire. Until 1697 when the impecunious government debased the coinage, puncturing investor confidence and putting many firms out of business, the stock market thrived. One coffee trader, John Houghton, published a twice-weekly paper listing share prices, taking care to explain to his readers the mysteries of the new profession: ‘The manner of the trade is this: the monied-man goes among the brokers and asks how stocks go? And upon information, bids the broker buy or sell so many shares of such and such stocks if he can, at such and such prices. Then he tries what he can do among those that have stocks, or the power to sell them, and if he can, makes a bargain.’
In such a speculative age, Blunt, with his glib personality and gift of the gab, was a man of his time, just as Law was far ahead of it. His initial route to power was through a company whose original business matched the bellicose nature of the times: the Sword Blade Company.
At the turn of the century, the Sword Blade Company had spotted a gap in the arms market. The English rapier, heavy and flat, was considered both by combatants and by those who wished, more peaceably, merely to make a fashion statement, to be less effective and less