Cantillon’s Career
Cantillon worked as a deputy to Anthony Hammond, the representative in Spain of the British Paymaster General to the Forces Abroad, James Brydges. Brydges, who later became Lord Carnarvon and still later the Duke of Chandos (henceforth Chandos), was the biggest war profiteer of the age.
He amassed a fortune through foreign exchange transactions on money that was converted from sterling into foreign currencies to pay for the armies overseas. Chandos took his percentage on all provisioning contracts ranging from food to horses, to uniforms, to gunpowder, and so on.By 1717 Cantillon had met up with a far more important personality who was to have a profound effect on the rest of his career. This was the Scotsman, John Law (1671-1729) who had started to put in place his grand design aimed at transforming the French monetary and financial systems - see entry on John Law.
Cantillon’s relationship with Law blew hot and cold during the Mississippi System. Initially they were on sufficiently good terms to establish, along with one of the biggest Mississippian speculators, Joseph Gage, a colonizing group to develop a settlement in Louisiana. Cantillon’s brother, Bernard, led this group from La Rochelle to New Orleans in 1719. However, as shares in the Mississippi Company rose from 170 to over 2000 in the early summer of 1719 Cantillon believed that there was a definite asset market bubble emerging. He sold his shares and retired to Italy. Cantillon’s timing was wrong as the Mississippi shares moved to over 10000 in early January 1720. Cantillon returned to France in the spring of 1720. Then, convinced more than ever that the Mississippi System would explode, he shorted the shares of the Mississippi Company and the French currency. Believing that a similar bubble, emanating from the speculation in the South Sea Company shares, had emerged in Britain, Cantillon took out sizeable put option contracts with Dutch bankers on British shares.
Meanwhile in France when the Mississippi Company faced increasing difficulties in the early summer of 1720, John Law invited Cantillon to return to France to assist him in re-structuring the System. Cantillon turned down the offer fearing that his profits, made through shorting the Company’s shares and the French currency, would be confiscated when the System eventually collapsed. By the end of 1720 Law was forced to flee from France as his System fell apart. Cantillon, on the other hand, had made sizeable fortunes by shorting Mississippi shares and the French currency along with the put contracts that he had arranged on British shares. He would become known as one of the Mississippian millionaires, classified in the French Visa of 1721 as having made 20 million livres on his French transactions. Cantillon was to find that there were costs associated with making his fortune. Some of his clients, led by Lady Mary Herbert and Joseph Gage, were responsible for criminal and civil suits against him alleging that he shorted the Mississippi with shares that they had given him as collateral for loans. These charges were never proven but they did mean that Cantillon faced continuous litigation in both Britain and France for the rest of his life. Cantillon was apparently murdered in his bed by a member of his household in 1734 in Albemarle Street, London.