Full text of "Chronicles and characters of the Stock exchange"

The whole of this Work is contained in the Bankers 1 Magazine for 1850.

CHKONICLES AND CHARACTERS

OF THE

STOCK EXCHANGE

JOHN FRANCIS.

'*. 4

AUTHOR OF

THE HISTORY OF THE BANK OF ENGLAND, ITS TIMES AND TRADITIONS.

FIRST AMERICAN EDITION.

TO WHICH AEE ADDED STOCK TABLES FROM 1732 TO 1846; DIVIDENDS ON BANK
OF ENGLAND STOCK FROM 1694 TO 1847, &c.

BOSTON:

WM. CROSBY AND H. P. NICHOLS,
111 WASHINGTON STREET.

1850.

INSCRIBED,

BY PERMISSION,

TO SAMUEL GURNEY, ESQ.

THIS VOLUME, RECORDING CITY SCENES, AND RELATING TO CITY TRANS-
ACTIONS, IS, TO SAMUEL GURNEY, ONE OP LONDON'S MOST EMINENT CITIZENS,
RESPECTFULLY DEDICATED, BY

HIS MOST OBEDIENT SERVANT,

JOHN FKANCIS.

PREFACE.

To GATHER the many remarkable incidents connect-
ed with the National Debt; to present an anecdoti-
cal sketch of the causes which necessitated, and the
corruptions which increased it; to reproduce its prin-
cipal characters ; to detail the many evils of lotter-
ies ; to relate the difficulties in the early history of
railways ; to popularize those loans, of which the
Poyais, with its melancholy tragedy, and the Greek,
with its whimsical transactions, were such striking
exemplars ; and to group these subjects around the
Stock Exchange, is the object of a portion of the
present volume.

Any work which tends to familiarize the origin
and progress of the National Debt, which shows that
it was raised for no idle cause, and increased for no
trifling purpose, may be useful in the consideration
of that encumbrance which must, sooner or later, be
reduced or repudiated.

VI PREFACE.

The volume does not profess to be statistical,
there are abundant works of a financial kind upon
the subject. Mr. Van Sommer's valuable Tables, to
which the writer acknowledges his obligations, and
which, with Mr. Wilkinson's Law of the Public
Funds, should be possessed by every member of the
Stock Exchange ; the works of McCulloch, of Ham-
ilton, of Grellier, of Fenn, render such a production
unnecessary. The present volume is a popular nar-
rative of the money power of England, intended to
be at once interesting and suggestive.

Shooter's Hill.

CONTENTS.

CHAPTER I.

PAGE

Ancient Mode of supporting Governments. Ignorance of Political Econ-
omy. Mercantile Greatness. Early Supplies. Tulip Mania. Acces-
sion of William 1

CHAPTER II.

The Earliest National Debt. History of Tontines. Of the Money In-
terest, its Origin, Extravagance, and Folly. Royal Exchange. First
Irredeemable Debt. Tricks of the Brokers. Jobbing in East India Stock.
False Reports. Importance of the English Funds. Picture of the
Alley. Systematic Jobbing of Sir Henry Furnese, Medina, and Marlbor-
ough. Thomas Guy, a Dealer in the Alley. 6

CHAPTER III.

Enormous Bribery by William. Increased Taxation. Speech of Sir
Charles Sedley. Wrongs of the Soldiers. Defence of William. Moral
Disorganization of the Country. First Exchequer-Bill Fraud. First
Foreign Loan. Romantic Fraud in 1715. Political Fraud of 'Change
Alley. Interference of the House of Peers. First Hoax. ... 12

CHAPTER IV.

Charitable Corporation Fraud. Its Discovery. Appalling Effects
and Remedy. Marlborough's Victories, their History, and the Loans they
brought. Augmented Importance of the Stock Exchange. Dislike to the
Members. Increased Loans. Difficulties in procuring them. Statement
of Sir Robert Walpole. Gifts of Contractors to Clothiers. First Pay-
ment of Dividends by the Bank. South-Sea Anecdotes 19

Vlll CONTENTS.

CHAPTER V.

Life of Thomas Guy. Imposition in Sailors 1 Tickets. Foreign Loan
attempted. Sir John Barnard. Expresses of the Jobbers. Foreign
Commissions. Origin of Time-Bar gains. Attempt to stop them. Its
Inadequacy. Proposal to reduce the Interest on the National Debt. Op-
position of Sir Robert Walpole. New Mode of raising Loans. Compar-
ative Interest in Land and Funds. Punishment of Manasseh Lopez.
The first Reduction of Interest. Life of Sir John Barnard. ... 25

CHAPTER VI.

Origin of New Loans. Fraud of a Stock-broker. East India Stock.
Sketch of Sampson Gideon, the great Jew Broker. East India Com-
pany. Restriction of its Dividends. Liberality to its Clerks. Impor-
tant Decision. Robbery at Jonathan's. Curious Calculation concerning
the National Debt. , 31

CHAPTER VII.

Crisis of 1772. Indian Adventurers, their Ostentation, their Character.

Failure of Douglas, Heron, <5f Co. Neale, Fordyce, <Sf Co. Sketch
of Mr. Fordyce. His Success in the Alley. Alarm of his Partners.
His Artifice. His Failure. General Bankruptcy. Liberality of a Na-
bob. Reply of a Quaker. Witticism of John Wilkes. War of Ameri-
can Independence. Artifices of Ministers. Anecdote of Mr. Atkinson.

Value of Life on the Stock Exchange. Longevity of a Stock-broker. 39

CHAPTER VIII.

Invention of Lotteries. The First Lottery. Employed by the State.
Great Increase. Eagerness to subscribe. Evils of Lotteries. Suicide
through them. Superstition. Insurances. Spread of Gambling.
Promises of Lotteries. Humorous Episodes. Legal Interference. Par-
liamentary Report. Lottery Drawing. Picture of Morocco Men. Their
Great Evil. Lottery Puffing. Epitaph on a Chancellor. Abolition of
Lotteries. . . 45

CHAPTER IX.

Wholesale Jobbing. Insurance on Sick Men. False Intelligence.
Uselessness of Sir John Barnard's Act. Origin of the Blackboard.
Opposition to Loans. Lord Chatham's Opinion of Jobbers. Inviolability
of English Funds. Parisian Banking-Houses . Proposition to pay off
the National Debt. Extravagance of the Contractors. Lord George
Gordon's Opinion of }hem. Members' Contracts. New System adopted.
Abraham Goldsmid. Bankers' Coalition broken by him. His Munifi-
cence. His Death. Sensation in the City. . . 54

CONTENTS.

CHAPTER X.

Curious Forgery. Its Discovery. Loan of 1796. Its Management.

French Revolution and its Effect. List of Subsidies to Foreign Pow-
ers. Removal of Business from ' Change Alley. Erection of the present
Stock Exchange. Loyalty Loan. Preliminaries of Peace. Its Effect.

Hoax on the Stock Exchange. War renewed. Great Fraud on the
Jobbers. Its Discovery. Rights of Stock-brokers. .... 62

CHAPTER XI.

Unfounded Charge. Joint-Stock Companies. Speculators. Mark
Sprot. Sketch of the House of Baring. Policies on the Life of Bona-
parte. Rumors of his Death. David Ricardo. Forgery of Benjamin
Walsh. Excitement of the Nation. Increase of the National Debt.
Sinking Fund. Unclaimed Dividends. Francis Baily. ... 72

CHAPTER XII.

Review of the National Debt. Opinions. Bolingbroke. Financial
Reform Association. Extravagance of Government. Schemes for paying
off the National Debt. Review of them. Proposals for Debentures. . 82

CHAPTER XIII.

Progress of Invention. Public Roads. Steam. Duke of Bridge-
water. Canals. Railroads. Thomas Gray, their Pioneer. His Diffi-
culties. Proposals for the Liverpool and Manchester Railway. Monopoly
of the Canals. Parliamentary Inquiry. Extraordinary Opinions of Wit-
nesses. The Claims of Thomas Gray. Value of Canal Property. . 89

CHAPTER XIV.

Monetary Excitement. Approaches to the Stock Exchange. Gold Com-
pany. Equitable Loan Company. Frauds in Companies. Loan to For-
eign States. Poyais Bubble. . 96

CHAPTER XV.

Loan to Guatemala. Dispute concerning it. Greek Loan. Its Mis-
management. Asserted Jobbing. Mr. Hume. Dr. Bowring. Quar-
terly Review. Proposed Tax on Transfers 103

CHAPTER XVI.

Sketch of the Life of Rothschild. Comes to England. Introduction of
Foreign Loans. Large Purchases. Anecdotes Concerning Rothschild.
His Difficulties and Annoyances. His Death and Burial. Last Crisis on
the Stock Exchange. ... 109

CONTENTS.

CHAPTER XVII.

Legends of the Stock Exchange. Mr. Dunbar. Duke of Newcastle.
French Ambassador. James Bolland. Extraordinary Incident. For-
tunate Adventure. Morals and Manners of the Stock Exchange. Its Con-
stitution and Arrangements 118

CHAPTER XVIII.

Life Assurance. Its Benefits. Its Commencement. Suicide of an In-
surer. Insurance of Invalid Lives. The Gresham. Sketch of the West
Middlesex Delusion. 125

APPENDIX.

The Anatomy of Exchange Alley; or a System of Stock Jobbing. Prov-
ing that Scandalous Trade, as it is now carried on, to be Knavish in its Pn-
vate Practice, and Treason in its Public 135

Stock Tables; Dividend Tables. . . 153

CHRONICLES AND CHARACTERS

STOCK EXCHANGE.

CHAPTER I.

Ancient Mode of supporting Governments. Ignorance of Political Economy.
Mercantile Greatness. Early Supplies. Tulip Mania. Accession of

William.

THE national debt has been designated by some a national nuisance ;
by others it has been termed a national necessity. In the earlier history
of the world, when war was a war for dominion, and spoliation followed
conquest, the victor returned rich with the treasures of conquered states,
and his captive paid trebly the expenses of the war. It was thus that the
mistress of the world became an emporium for the gathered wealth of
temples, for the gorgeous ornaments of a subdued aristocracy, and for
the gold which had filled the treasury of barbarous but luxurious nations.
These accumulations, together with annual tributes, prevented the forma-
tion of a public debt. The Goth, when he poured from his barren re-
cesses upon the cultivated plains of Italy, ignorant of political economy
as a science, felt it as a principle, and more than repaid the expenses of
his foray by exacting the riches of imperial Rome. Modern Europe
teaches us to similar purport ; and Napoleon, in those wars which, to
some a memory, are to others history, acted upon the same plan, and 1
made Paris a receptacle for the spoil of many nations.

In the early annals of England, the feudal system prevented the ere*
ation of a national debt. The Saxon serf was compelled to follow the
banner of his Norman master. The Norman baron, at the command of
his sovereign, called his followers to the field, and having, if successful,
enriched himself, retraced his path to his mountain fastness and his island
home. In these rude ages the art of levying money was unknown ; and
victorious armies were often dispersed for want of funds. The con-
queror of Pavia was compelled to disband 24,000 men because he could
not raise taxes to support them ; and it is a suggestive fact, that when v
I 1

Ancient Mode of supporting Governments.

during the reign of the third Henry, it was necessary to procure 50,000,
and a tax of 1 2s. 4d. was levied on each parish in England, it only
produced about < 9,500, there being but 8,500 parishes ; so ignorant
were the authorities of the very machinery of the state they governed.

From a very early period, the mercantile capacity of England has
been developed ; and her insular position, which at once suggested and
favored commerce, was taken advantage of by laymen and churchmen.
Bishops entered into speculations in herrings, and abbots did not disdain
to unite the smuggling with a more saintly calling. But there were other
and more legitimate followers of that pursuit which has since made the
name of an English merchant a symbol of English greatness. Among
these, William de la Pole stands prominently forward ; and the founder
of the House of Suffolk is familiar to the student of commercial history.
William Canyng that name so intimately connected with the fortunes
of " the marvellous boy who perished in his pride " and Richard
Whittington dear to household memories, and the founder of many
princely charities were others whose munificence was only surpassed
by their wealth.

A slight sketch of the tyranny and injustice employed by our earlier
monarchs in the production of revenue, may not be unamusing to the
readers of the present volume. The records of the Exchequer prove
that barbaric acts were performed to obtain money ; that justice was
openly bought and sold ; that the supreme judicature of the country
could only be approached by bribes to the monarch. The county of
Norfolk paid a large sum to Henry I. to secure fair dealing. Yarmouth
paid heavily to prevent a king from violating his own charter. Com-
merce was controlled, and trade was harassed. Corporations and mo-
nopolies were created at the monarch's pleasure ; and, as nothing was too
small to escape his notice, so nothing was too large to escape his grasp.
The wife of Hugh de Neville paid two hundred hens to enjoy the society
of her husband twelve hours in prison ; and an abbot paid largely for
permission to secure his wood from being stolen. To mitigate the king's
anger, or obtain the king's services, money was equally necessary.
When peer and prior were sufficiently strong to resist, or sufficiently
poor to escape, the farmer and the peasant were visited. The approach
of the court was like the approach of the plague ; and men ran to con-
ceal their effects and their persons until the royal plunderer had passed.

Extraordinary emergencies caused extraordinary expenses ; and the
call to arms which resounded throughout Europe when Peter the Hermit
preached deliverance to the captive Sepulchre, was responded to by
Richard I. with the vehemence and energy of his character. To com-
pass his aim, he mortgaged the customs and he farmed the revenues.
Fie exacted money from his subjects in proportion to their wealth, and
declared he would sell London itself rather than forego his cherished
object. He feigned the loss of his signet, to procure fees ; and, to crown
all, resumed, on his return, the property he had previously sold, on the
pretence that he had no right to alienate it.

King John adopted the notable plan of imprisoning the mistresses of
the priests, confident that the money he could not obtain from their

Prerogatives of the Crown.

cupidity he would from their lust. Henry III. seized the merchandise of
his subjects, and borrowed a large sum besides, for which he paid a high
interest, and which the Parliament refused to discharge. Edward I.
seized the money and plate of monasteries and churches, feigned a voy-
age to the Holy Land, and, when funds were collected to aid him, kept
the money, and refused to go. Edward III. erected monopolies, exacted
loans, levied arbitrary fines, imposed arbitrary taxes, and, notwithstanding
the determined remonstrances of the Commons, claimed the right of doing
so at pleasure.

Richard II. pawned the jewels of the crown, sold the furniture of the
palace, went from place to place in the fashion of one soliciting alms,
and was deposed partially because he extorted large sums which he never
repaid. The reign of Henry V., brilliant as it was, would have proved
yet more so, had an authorized mode of raising supplies been then organ-
ized. Although he took from all quarters, sold his jewels, and borrowed
on the security of his crown, he was often compelled to stop in a career of
the most splendid success for lack of money. Edward IV. was called the
handsomest tax-gatherer in his kingdom ; and when he kissed a widow
because she gave more than he expected, it is said she doubled the
amount, in expectation of a second kiss. Henry VII. adopted all modes
and methods ; and, having levied a benevolence, made a large claim on
those who lived frugally, because they must have saved by their fru-
gality ; while, if they lived splendidly, they were dealt with as opulent.
It must, however, be recorded of this monarch, that he lent money, with-
out interest, to many merchants whose capital was not sufficient for their
commercial operations. When the eighth Henry attempted to raise a
forced loan of unusual amount, with unusual rigor, the people said, if
they were treated thus, " England was bond, and not free." The county
of Suifolk rose in arms ; and had not even this man's stubborn spirit
quailed before it, the resistance would have changed into rebellion. No
sooner had the monarch exhausted all Parliamentary supplies, than he
carried out, on a grand scale', the robberies he had often achieved on a
small one, by seizing the accumulated property of the monastic classes.
In 1522, he required a general loan of ten per cent, upon all property
from .20 to ,300, and a higher rate on larger sums. By courtesy, it
was termed a loan ; but when, seven years afterwards, a subservient Par-
liament acquitted him of all obligation to pay it, a harsher name was re-
corded in the minds, than the tongues of the people dared to express.

To the English sovereign a certain power over commerce had always
been intrusted ; but Elizabeth stretched her prerogative, and granted
monopolies by scores. Prices rose enormously, and the evil was felt
by every family in the realm. The House of Commons remonstrated.
When a long list of patents for monopolies was read, one sturdy member
demanded, " Is not bread there ? " " Bread ! " quoth one. " Bread ! "
cried another. " Yea, bread ! " said Mr. Hackwell ; " for, if care be
not taken, bread will be there before next Parliament." Nor was this
all : the coach of the chief minister was surrounded by the populace ;
menacing murmurs were heard cursing patents ; and indignant voices
declared that the old liberties of England should not be encroached on by

Commencement of the National Debt.

new prerogatives. With admirable sagacity, the queen saw the necessity
of yielding, and did it while she could with grace and dignity. But this
sovereign improved upon the plans of her predecessors, she kept the
temporalities of bishoprics in her own hands for years, and appropriated
the landed property of sees. Under the name of New Year's gifts, she
extorted large sums from the frequenters of the court ; she ordered com-
panies to lend her money, to borrow, if they did not possess it, and,
if she had more than she required, she would return part, provided they
would pay her interest for that on which she paid them nothing. To the
citizen of the nineteenth century this must appear a fable ; but it is a
recorded fact, that Elizabeth borrowed money from the citizens, found
she had more than she required, and, instead of repaying it, re-lent it to
them at seven per cent, on the security of gold and silver plate.

Charles I. seized the money of his merchants ; and his bonds were
hawked about the streets, were offered to the people as they left church,
and sold to the highest bidder. The Commonwealth were debtors, on the
security of the forfeited estates. Charles II. took money from France,
shut up the Exchequer, borrowed from his friends, and did any thing
rather than run the risk of being again sent on his travels. Thus, it
would seem, the exchequer of the earlier monarchs was in the pockets
of the people ; that of Henry VIII. in the suppressed monasteries ; Eliz-
abeth in the corporations ; and Charles II. wherever he could find it.

The abdication of James II. and the arrival of William III. form an era
in the history of the monetary world. The plans adopted by the latter to
crush the power of France, and raise the credit of England, were the
commencement of that great accumulation known as the National Debt,
and the origin, though remote, of that building celebrated throughout
Europe as the Stock Exchange. The rapid sketch now presented of the
mode in which money was supplied confirms the remark of Mr. Macaulay,
that " there can be no greater error than to imagine the device of meet-
ing the exigencies of the state by loans was imported into our island by
William III. From a period of immemorial antiquity, it had been the
practice of every English government to contract debts. What the
Revolution introduced was the practice of honestly paying them."

The earliest instance of that fatal love of speculation, so ruinous to the
character and credit of all who possess it, occurred in 1634 ; and the his-
tory of the tulip mania in Holland is as instructive as that of any similar
period. In the above year, the chief cities of the Netherlands engaged in
a traffic which destroyed commerce and encouraged gambling ; which en-
listed the greediness of the rich and the desire of the poor ; which raised
the value of a flower to more than its weight in gold ; and which ended,
as all such periods have ended, in wild and wretched despair. The many
were ruined, the few were enriched ; and tulips were as eagerly sought
in 1634, as railway scrip in 1844. The speculation was conducted on
similar principles. Bargains were made for the delivery of certain roots ;
and when, as in one case, there were but two in the market, lordship
and land, horses and oxen, were sold to pay the deficiency. Contracts
were made, and thousands of florins paid, for tulips which were never
seen by broker, by buyer, or by seller. For a time, as usual, all won,

The Tulip Mania.

and no one lost. Poor persons became wealthy. High and low traded
in flowers ; sumptuous entertainments confirmed their bargains ; notaries
grew rich ; and even the unimaginative Hollander fancied he saw a sure
and certain prosperity before him. People of all professions turned their
property into cash ; houses and furniture were offered at ruinous prices ;
the idea spread throughout the country that the passion for tulips would
last for ever ; and when it was known that foreigners were seized with
the fever, it was believed that the wealth of the world would concentrate
on the shores of the Zuyder Zee, and that poverty would become a tra-
dition in Holland. That they were honest in their belief is proved by
the prices they paid ; and the following list shows that the mania must
indeed have been deep, when goods to the value of 2,500 florins were
given for one root :

Florins. Florins.

2 Lasts of wheat . . .448 4 Tons of beer . . 32

4 Lasts of rye 558 4 Tons of butter .

4 Oxen 480 1000 Pounds of cheese

3 Swine 240 1 Bed

12 Sheep 120 1 Suit of clothes .

2 Hogsheads of wine . . 70 1 Silver beaker . .

192

120

100

Another species commonly fetched two thousand florins ; a third was
valued at a new carriage, two gray horses, and a complete harness.
Twelve acres of land were paid for a fourth ; and 60,000 florins were
made by one man in a few weeks. But the panic came at last. Con-
fidence vanished ; contracts were void ; defaulters were announced in
every town of Holland ; dreams of wealth were dissipated ; and they
who, a week before, rejoiced in the possession of a few tulips which
would have realized a princely fortune, looked sad and stupefied on the
miserable bulbs before them, valueless in themselves, and unsalable at
any price. To parry the blow, the tulip-merchants held public meetings,
and made pompous speeches, in which they proved that their goods were
worth as much as ever, and that a panic was absurd and unjust. The
speeches produced great applause, but the bulb continued valueless ; and,
though actions for breach of contract were threatened, the law refused to
take cognizance of gambling transactions. Even the wisdom of the
Deliberative Council at the Hague was at fault, and to find a remedy was
beyond the power of the government. Many years passed before the
country recovered from the shock, or commerce revived from the de-
pression which followed the Tulipomania ; and which, not confined exclu-
sively to Holland, visited London and Paris, and gave a fictitious impor-
tance to the tulip in the two greatest capitals of the world.

1* 5

Reign of William the Third.

CHAPTER II.

The Earliest National Debt. History of Tontines. Of the Money Interest,
its Origin, Extravagance, and Folly. Royal Exchange First Irredeemable
Debt. Tricks of the Brokers. Jobbing in East India Stock. False Re-
ports. Importance of the English Funds. Picture of tlie Alley. Sys-
tematic Joltbing of Sir Henry Furnese, Medina, and Marlborough. Thomas
Guy, a Dealer in the Alley.

THE creation of a national debt has been attributed to the Dutch, but is
really due to the Venetians. The immediate treasury of the Doge was
exhausted ; money was necessary ; and the most eminent citizens of that
great republic were called upon to redeem the credit of their country.
A Chamber of Loans was established, the contributors were made cred-
itors, four per cent, was allowed as interest, and she,

" Who once held the gorgeous East in fee,
And was the safeguard of the West,"

resumed her credit, and increased her power.

So fruitful a source of wealth was not allowed to fall into desuetude.
The Florentine republic, experiencing a deficiency in her revenue, estab-
lished a mount, allowed five per cent, interest, and, says Sir William
Blackstone, these laid the foundation of our national debt. The Dutch
were not long following the example. When the great persecution oc-
curred, which forced the Spanish Jew the aristocracy of the chosen
race from the place of his nativity, he brought with him to Holland
the craft and the cunning of the people. He taught the Dutch to create
an artificial wealth ; and the people of that republic, by its aid, main-
tained an attitude of independence, which rendered them so long the
envy and the hatred of the proud states which surrounded their territory.
Their industry increased with the claims upon them. They cultivated
their country with renewed perseverance ; they brought the spices of the
4ch and barbarous East to the shores of the cultivated and the civilized
West ; they opened new sources of profit ; their merchant-vessels cov-
ered the waters ; their navy was the boast of Europe ; their army was
the scourge of the great Louis in the height of his pride and power.
The markets of Holland evinced a full activity ; the towns of Holland
increased in importance ; and the capital of Holland became the centre
of European money transactions, partly in consequence of the great
bigotry which banished the Jew from Spain.

When, therefore, the chief of that small yet powerful republic was
called to sit upon an English throne, he brought with him many of those
whose brains had contrived and whose cunning had contributed to pro-
duce these great changes ; and from his reign, whatever evils may have
arisen from a reckless waste of money, there commenced that principle
which, for a century and a half, has operated on the fortunes of all
Europe , which proclaimed that, under every form and phase of cir-
cumstance, in the darkest hour of gloom as hi the proudest moment of

Origin of Tontines.

grandeur, the inviolable faith of England should be preserved towards the
public creditor. Up to this period, the only national debt on which interest
was acknowledged was that sum which had been seized on in the Ex-
chequer ; and even these dividends were irregularly paid. Many debts
had been incurred by our earlier kings, but all the promises and pledges
which had been given for their redemption were broken directly the
money was gained ; and it remained, we repeat, for William, whatever
his errors may have been, to establish the principle, that faith to the public
creditor must be inviolate.

The reign of William was productive of all modes and methods of
borrowing. Short and long annuities, annuities for lives, tontines, and
lotteries, alike occupied his attention. The former are still in existence,
the two latter have fallen to decay. The lotteries have been expunged
from the statute-book, and their evils will be fully developed at a fitting
period ; while to the brain of a Neapolitan, and the city of Paris, Wil-
liam was indebted for the knowledge of the tontine. Lorenzo Tonti, in
the middle of the seventeenth century, with the hope of making the
people of France forget their discontents in the excitement of gambling,
suggested to Cardinal Mazarin the idea of annuities, with the benefit to
the survivors of those incomes which fell by death. The idea was
approved by the Cardinal and allowed by the court. Parliament, how-
ever, refused to register the decree, and the scheme failed. Tonti again
endeavoured to establish a society on this plan, and to build by its means
a bridge over the Seine ; but the unfortunate inventor christened it Ton-
tine, and not a man in Paris would trust his money to a project with an Ital-
ian title. A complete enthusiast, he allowed Paris no rest on his favorite
theme, and proposed to raise money for the benefit of the clergy in the
same way. The Assembly reported on the scheme, and the report con-
tained all that could flatter the projector's vanity, but refused a permission
to act on it ; and again it was abandoned. The idea, however, which
could not be carried out for the people, which was refused for the benefit
of the city, and not allowed for the clergy, was claimed as a right for the
crown ; and in 1689, Louis XIV. created the first tontine to meet his
great expenses. From this period they became frequent ; and William
was too determined to humble the pride of his rival, not to avail himself
of this among other modes of raising funds.*

The moneyed interest a title familiar to the reader of the present day
was unknown until 1692. It was then arrogated by those who saw
the great advantage of entering into transactions in the funds for the aid
of government. The title claimed by them in pride was employed by
others in derision : and the purse-proud importance of men grown sudden-
ly rich was a common source of ridicule.

Wealth rapidly acquired has been invariably detrimental to the man-
ners and the morals of the nation, and in 1694 the rule was as absolute

* The tontine is simply a loan raised on life-annuities. In consideration of a cer-
tain amount paid by a certain number of persons, government grants to each a life-
annuity. As the annuitants die, their shares are divided among the survivors, until
the annuity granted to the whole becomes centred in the longest liver ; at his death
the transaction ceases.

The Royal Exchange in 1695.

as now. The moneyed interest, intoxicated by the possession of wealth
which their wildest dreams had never imagined, and incensed by the
cold contempt with which the landed interest treated them, endeavoured
to rival the latter in that magnificence which was one characteristic of
the landed families. Their carriages were radiant with gold ; their per-
sons were radiant with gems ; they married the poorer branches of the
nobility ; they eagerly purchased the princely mansions of the old aris-
tocracy. The brush of Sir Godfrey Kneller, and the chisel of Caius
Gibber, were employed in perpetuating their features. Their wealth was
rarely grudged to humble the pride of a Howard or a Cavendish ; and the
money gained by the father was spent by the son in acquiring a distinc-
tion at the expense of decency. They were seized upon by the satirist
and the dramatist as a new object of ridicule ; and under various forms
they have become a stage property. The term which they had cho-
sen to distinguish them became a word of contempt ; and the moneyed
class was at once the envy and the laugh of the town. Nor was it until
that interest became a great and most important one, that the term assum-
ed its right meaning, or that the moneyed contended with the landed interest
on a more than equal footing. The former have always clung to the
house of Brunswick ; the latter have often used their exertions against it.
In time, however, the moneyed became a landed interest, and vied in taste
as well as magnificence with the proudest of England's old nobility.
Among these was Sir Robert Clayton, director of the Bank, whose ban-
queting-room was wainscoted with cedar, whose villa was the boast of
the Surrey hills, whose entertainments imitated those of kings, whose judi-
cious munificence made him the pride of that great city to the represen-
tation of which he was called by acclamation. But there were other and
less reputable directors of the great Bank ; and a pamphlet, published
shortly afterwards, drew public attention to acts which either prove that
morality in one commercial age is immorality in the next, or that some
of the governors of the corporation were wofully deficient in the organ
of conscientiousness.

In the Royal Exchange, erected for less speculative and more mercan-
tile pursuits, were the early transactions of the moneyed interest in the
funds carried on. In 1695, its walls resounded with the din of new pro-
jects ; nor could a more striking scene be conceived than that presented
in the area of this building. The grave Fleming might be seen making
a bargain with the earnest Venetian. The representatives of firms from
every civilized nation the Frenchman with his vivacious tones, the
Spaniard with his dignified bearing, the Italian with his melodious tongue
might be seen in all the variety of national costume ; and the flowing
garb of the Turk, the fur-trimmed .coat of the Fleming, the long robe of
the Venetian, the short cloak of the Englishman, were sufficiently striking
to attract the eye of the painter to a scene so varied. There, too, the
sober manner of the citizen formed a strong contrast to the courtier, who
came to refill his empty purse : and there also, as now, might be seen
the broken-down merchant, pale, haggard, and threadbare, haunting the
scene of his former glory, passing his now valueless time among those
who scarcely acknowledged his presence, and, as he had probably dined
with Duke Humphrey, supped with Sir Thomas Gresham.

East India Company Stock.

" Trampling the Bourse's marble twice a day,
Though little coin thy purseless pockets line,

Yet with great company thou art taken up,
For often with Duke Humphrey dost thou dine,

And often with Sir Thomas Gresham sup."

A new impulse had been given to trade, and the nation was beginning
to feel the effect of the Revolution. William had already tried his power
in the creation of a national debt : jobbing in the English funds and East
India Stock succeeded ; and the Royal Exchange became what the
Stock Exchange has been since 1700 the rendezvous of those who,
having money, hoped to increase it, and of that yet more numerous and
pretending class, who, having none themselves, try to gain it from those
who have.

The charter granted by William to the Corporation of the Bank of
England is the first instance of a debt bequeathed to posterity. Annui-
ties had hitherto been the mode of raising supplies ; arid the day, there-
fore, which witnessed the establishment of the Bank is worthy of notice,
as being also the day on which William laid the foundation of an irre-
deemable national debt.

It was soon found that the duties appropriated to the various payments
of interest and annuities were insufficient to meet the claims. In 1697,
the national debt amounted to twenty millions, and the revenue was de-
ficient five millions. The payment in consequence grew uncertain, and
the moneyed men of the day, watching the course of events, made large
sums out of the distresses of government. " The citizen," says an old
writer on the subject, " began to decline trade and turn usurer."

To prevent this, a law was passed against the stockbrokers and jobbers,
which limits the number of the former, enacts some severe regulations,
and makes some severe remarks upon the entire body.

At this period the broker had a walk upon the Royal Exchange devoted
to the funds of the East India and other great corporations ; and many
of the terms now in vogue among the initiated arose from their dealings
with the stock of the East India Company. Jobbing in the great char-
tered corporations was thoroughly understood. Reports and rumors were
as plentiful then as now. No sooner was it known that one of the fine
vessels of the India Company, laden with gold and jewels from the
East, was on its way, than every method was had recourse to. Men were
employed to whisper of hurricanes which had sunk the well-stored ship ;
of quicksands which had swallowed her up ; of war which had com-
menced when peace was unbroken ; or of peace being concluded when the
factories were in the utmost danger. Nor were the brains of the specula-
tors less capable than now. If at the present day a banker condescends
to raise a railway bubble 50 per cent., the broker of that day understood
his craft sufficiently to cause a variation in the price of East India Stock
of 263 per cent. ; and complaints became frequent that the Royal Ex-
change was perverted from its legitimate purpose, and that the jobbers
the term was applied ignominiously ought to be driven from a spot
polluted by their presence. Mines of gold, silver, and copper were so
temptingly promised, that the entire town pursued the deception. Tricks

''Change Alley.

and stratagems were plentiful ; the wary made fortunes, and the unwary
were ruined.

In 1698, the dealers and jobbers in the funds and share market, annoy-
ed by the objections made to their remaining in the Royal Exchange, and
finding their numbers seriously increase, deemed it advisable to go to
'Change Alley, as a large and unoccupied space, where they might carry
on their extensive operations.

" The centre of jobbing is in the kingdom of 'Change Alley and its
adjacencies," said a pamphleteer a few years after. " The limits are ea-
sily surrounded in about a minute and a half. Stepping out of Jona-
than's into the Alley, you turn your face full south ; moving on a few
paces, and then turning due east, you advance to Garraway's ; from
thence, going out at the other door, you go on still east into Birchin
Lane ; and then, halting a little at the sword-blade bank, you immediate-
ly face to the north, enter Cornhill, visit two or three petty provinces
there on your way to the west ; and thus, having boxed your compass,
and sailed round the stock-jobbing globe, you turn into Jonathan's again."

The English funds were assuming a greatness they have ever since
maintained. The Hebrew capitalist, who came over with William, had
increased the importance of the jobbers by joining them. The English
merchant even at this early period found that money might be gain-
ed in the new operation ; and 'Change Alley, so well known in Parlia-
mentary debates and the correspondence of the time as " the Alley,"
was for a century the centre of all dealings in the funds. Here assem-
bled the sharper and the saint ; here jostled one another the Jew and the
Gentile ; here met the courtier and the citizen ; here the calmness of the
gainer contrasted with the despair of the loser ; and here might be seen
the carriage of some minister, into which the head of his broker was
anxiously stretched to gain the intelligence which was to raise or depress
the market. In one corner might be witnessed the anxious, eager coun-
tenance of the occasional gambler, in strong contrast with the calm, cool
demeanor of the man whose trade it was to deceive. In another the He-
brew measured his craft with that of the Quaker, and scarcely came off
victorious in the contest ; while in one place, appropriated to him, stood
the founder of hospitals, impressing with eagerness upon his companion
the bargain he was about to make in seamen's tickets.

It was soon felt practically that the air of England is cold and its cli-
mate variable. The more respectable among the jobbers, therefore,
gathered beneath the walls of one of those coffee-houses which formed
so marked a feature of London life in the eighteenth century, until the
chance became a customary visit, and the coffee-house known as Jona-
than's became the regular rendezvous of all the dealers in stock, and
consequently the scene of transactions as extensive as any the world ever
witnessed.

In 1701, the character of those who met in 'Change Alley was not
very enviable. It was said, and said truly, that they undermined, impov-
erished, and destroyed all with whom they came in contact. " They can
ruin men silently," says a writer of th'; period, with great vehemence ;
" undermine and impoverish, fiddle them out of their money, by the

Sir Henry Furnese.

strange, unheard-of engines of interest, discount, transfers, tallies, deben-
tures, shares, projects, and the devil and all of figures and hard names."

Every thing which could inflate the hopes of the schemer was brought
into operation by the brokers. If shares were dull, they jobbed in the
funds, or tried exchequer bills ; and if these failed, rather than remain
idle, they dealt in bank-notes at 40 per cent, discount. These new modes
of gambling seized upon the town with a violence which sober citizens
could scarcely understand. Their first impulse was to laugh at the sto-
ries currently circulated of fortunes lost and won ; but when they saw
men who were yesterday threadbare pass them to-day in their carriages,
when they saw wealth, which it took their plodding industry years of pa-
tient labor to acquire, won by others in a few weeks, unable to resist
the temptation, the greatest of the city merchants deserted their regular
vocations and speculated in the newly-produced stocks. " The poor
English nation," says a writer, " run a madding after new inventions,
whims, and projects ; and this unhappy ingredient my dear countrymen
have in their temper, they are violent, and prosecute their projects
eagerly."

No sooner had the members of the jobbing community taken their
quarter in 'Change Alley, than the city of London was seized with
alarm, and tried to keep the brokers at the Royal Exchange. They
grew indignant at their deserting so time-honored a place, and bound
them in pains and penalties not to appear in 'Change Alley. Pocket,
however, triumphed over prerogative ; brokers resorted where bargains
were plentiful ; 'Change Alley grew famous throughout England ; but it
was not till nearly a century and a quarter after its first transaction, and
a quarter of a century after 'Change Alley ceased to exist as a sphere
for the stockjobbers, that the ancient and useless provision not to assem-
ble in 'Change Alley was expunged from the broker's bond.

Among those who employed their great fortunes in the manner alluded
to was Sir Henry Furnese, a Director of the Bank of England. Through-
out Holland, Flanders, France, and Germany, he maintained a complete
and perfect train of intelligence. The news of the many battles fought
at this period was received first by him, and the fall of Namur added to
his profits, owing to his early intelligence. On another occasion he was
presented by William with a diamond ring, as a reward for some impor-
tant information, and as a testimony of this monarch's esteem. But the
temptation to deceive was too great, even for this gentleman. He fabri-
cated news ; he insinuated false intelligence ; he was the originator of
some of those plans which at a later period were managed with so much
effect by Rothschild. If Sir Henry wished to buy, his brokers were or-
dered to look gloomy and mysterious, hint at important news, and after a
time sell. His movements were closely watched ; the contagion would
spread ; the speculators grew alarmed ; prices be lowered 4 or 5 per
cent., for in those days the loss of a battle might be the loss of a
crown, and Sir Henry Furnese would reap the benefit by employing
different brokers to purchase as much as possible at the reduced price.
Large profits were thus made ; but a demoralizing spirit was spread
throughout the Stock Exchange. Bankrupts and beggars sought the

Obnoxious Taxation.

same pleasure in which the millionnaire indulged, and often with similar
success.

The wealthy Hebrew, Medina, accompanied Marlborough in all his
campaigns ; administered to the avarice of the great captain by an annu-
ity of six thousand pounds per annum ; repaid himself by expresses con-
taining intelligence of those great battles which fire the English blood to
hear them named ; and Ramilies, Oudenarde, and Blenheim adminis-
tered as much to the purse of the Hebrew as they did to the glory of
England.

In the midst of these excitements arises a name which, to the dwellers
in London, is well known. Thomas Guy, the Bible contractor, was a fre-
quenter of 'Change Alley ; and here, duly and daily, might be seen that
figure, which the gratitude of his fellow-men has rendered familiar in the
statue raised to his memory.

CHAPTER III.

Enormous Bribery by William. Increased Taxation. Speech of Sir Charles
Sedley. Wrongs of the Soldiers. Defence of William. Moral Disorgani-
zation of the Country. First Exchequer-Bill Fraud. First Foreign Loan.
Romantic Fraud in 1715. Political Fraud of ' Change Alley. Interference
of the House of Peers. First Hoax.

THE Parliamentary records of William's reign are curious. The de-
mands which he made for money, the hatred to France which he encour-
aged, and the frequent supplies he received, are remarkable features in
his history. Every art was employed ; at one time a mild remonstrance, at
another a haughty menace, at a third the reproach that he had ventured his
life for the benefit of the country. The bribery during this reign was the
commencement of a system which has been very injurious to the credit
and character of England. The support of the members was purchased
with places, with contracts, with titles, with promises, with portions of the
loans, and with tickets in the lottery. The famous axiom of Sir Robert
Walpole was a practice and a principle with William ; he found that cus-
tom could not stale the infinite variety of its effect, and that, so long as
bribes continued, so long would supplies be free. Exorbitant premiums
were given for money ; and so low was public credit, and so great public
corruption, that, of 5 millions granted to carry on the war, only 2| mil-
lions reached the exchequer. Long annuities and short annuities, lottery-
tickets and irredeemable debts, made their frequent appearance ; and the
duties, which principally date from this period, were most pernicious.
The hearth-tax was nearly as obnoxious as the poll-tax. The custom and
excise duties were doubled. The hawker and the hackney-coach driver,
companies and corporations, land and labor, came under his supervision.
Births, burials, and bachelors were added to the list, and whether a wife

Corruption of Parliament.

lost a husband, or whether a widow gained one, the effect was alike.
Beer and ale, wine and vinegar, coal and culm, all contributed to the im-
poverished state ; and although some who looked back with regret occa-
sionally indulged their spleen, the general tone of the Parliament was sub-
missive. Still, there were times when the truth was spoken ; and truths
like the following were unpleasant :

" We have provided," said Sir Charles Sedley, " for the army ; we
have provided for the navy ; and now we must provide for the list. Tru-
ly, Mr. Speaker, 't is a sad reflection that some men should wallow in
wealth and places, while others pay away in taxes the fourth part of
their revenue. The courtiers and great officers feel not the terms, while
the country gentleman is shot through and through. His Majesty sees
nothing but coaches and six, and great tables, and therefore cannot imag-
ine the want and misery of the rest of his subjects. He is encompassed
by a company of crafty old courtiers."

The corrupt transactions which tended so greatly to increase the na-
tional debt are very remarkable. The assembled Commons declared in a
solemn vote, " it is notorious that many millions are unaccounted for."
Mr. Hungerford was expelled from the lower house for accepting a bribe
of <^21; and the Duke of Leeds impeached for taking one of 5,500
guineas. The price of a speaker Sir John Trevor was 1,005,
and the Secretary to the Treasury was sent to the Tower on suspicion of
similar practices. Money-receivers lodged great sums of public money
with the goldsmiths at the current interest. Others lent the exchequer its
own cash in other persons' names ; and out of 46 millions raised in 15
years, 25 millions were unaccounted for. The Commissioners of Hack-
ney-coaches were accessible, and peculation in the army was discovered
by a chance petition of the dwellers in a country town. By this it ap-
peared that the inhabitants of Royston in Hertfordshire had large claims
made upon them for money, by colonels, captains, and cornets, in addi-
tion to the food and lodging which was their due. A few independent
members took up the question ; the public supported them ; and at this
juncture a book was delivered at the lobby of the house, which asserted
that the public embezzlement was as enormous as it was infamous, and
that the writer was prepared to make discoveries which would astonish the
world. 1 The offer was accepted ; a searching inquiry was made, and de-
falcations were discovered so great, that all wonder ceased at the increase
of the national debt, and at the decrease of the national glory. The
abuses in clothing the army were plain and palpable. The agents habit-
ually detained the money due to the soldiers, and used it for their own
advantage, or compelled them to pay so large a discount, that they were
in the utmost distress.

The subaltern officers were not better off. Colonel Hastings, after-
wards cashiered for the offence, made them buy their raiment of him.
If they hesitated, he threatened ; if they refused, he confined them. In
1693, an inquiry was made into the application of the secret-service
money, when great and deserved animadversion was passed upon those
through whom it circulated. The power possessed by government under
such abuses may be imagined. They were sure of the votes of those
2 13

Defence of William the Third.

who had places and pensions, and they were sure also of the votes of
that large class of expectants which always haunts a profuse ministry ;
and thus " the courtiers," as the ministerial party was long designated,
could baffle any bills, quash all grievances, stifle any accounts, and raise
any amount of money.

These discoveries inflamed the people, and murmurs that corruption
had eaten into the nation became general. Court and camp, city and
senate, were alike denounced. The pamphleteers spoke in strong lan-
guage. " Posterity," said the author of one, termed The Price of the
Abdication, " will set an eternal brand of infamy upon those members,
who, to obtain either offices, profitable places, or quarterly stipends, have
combined to vote whatever hath been demanded."

It has been the fashion of a certain class to decry William because he
founded the national debt. But the war which he waged was almost a
war of necessity, and could not be supported without liberal supplies.
There was, however, with William a personal pride in the contest. He
had been taught, from his boyhood, hatred to France, and almost in boy-
hood had checked the universal dominion aimed at by Louis. With him,
therefore, opposition to France was a passion ; and he who, at the age of
twenty-three, bade defiance to the combined power of the two greatest
nations of the modern world, remembered, as soon as he reached the
English throne, that proud, though bitter moment, when, surrounded by
French force, his people determined to let loose the waters which their
skill had confined, and from the homes and hearths of their fathers bear
their goods, their fortunes, and their persons, and to erect in a new land
the flag they would not see dishonored in the old. When, therefore,
William of Orange became monarch of England, his first thought was
the humiliation of France. To this point he bent the vast energies of
England and his own unconquerable will ; for this only was his crown
valuable, and for this purpose was the power of England strained to the
utmost tension.

The importance of France was then at its height. Louis sought to
sway the councils of Europe ; and whoever else might have succumbed,
the statesmen of England had been in his power, and a monarch of
England in his pay. He saw, therefore, with dislike which was not at-
tempted to be concealed, the throne mounted by one who was resolved,
not merely to maintain its ancient greatness, but to quell the power of its
ancient rival. Louis sheltered the abdicated king, and encouraged his
mock court and his mock majesty. This was sufficient proof of his feel-
ing ; nor were other indications wanting : and it is a complete fallacy to
suppose that the debt was unnecessarily incurred ; in it lay the power of
William and the safety of the land.

Had the new king employed the arbitrary mode of levying supplies of
the earlier monarchs ; had he made forced loans and never repaid them ;
had he seized upon public money, and wrung the purses of public men,
the country might as well have been governed by a James as a William,
and would in all probability have recalled the exile of the unfortunate
House of Stuart. The evils of William's reign were in the facts that his
power was not sufficiently established to borrow on equitable terms ; that

Moral Disorganization.

the bribery, abuses, and corruption of men in high places increased with
their position ; and, above all, that, instead of paying his debts by terminable
annuities, he made them interminable. Lord Bolingbroke declares, that
he could have raised funds without mortgaging the resources of the na-
tion in perpetuity, and that it was a political movement to strengthen the
power of the crown, and to secure the adherence of that large portion of
the people by whom the money had been lent.

The war was necessary, and the contraction of the debt equally so ;
for, although William engaged in the contest with something like person-
al pride, it was essentially a national war. A free people had driven
away the Stuarts ; a despotic king would have forced them back. If
ever, therefore, a contest directly interested both subject and sovereign, it
was that which created the national encumbrance ; and England was for-
tunate in the man she had chosen to champion her rights. The contest,
which dated from 1688 and ended in 1697, which cost us 20 millions in
loe.ns and 16 millions in taxes, was only closed because both nations were
fatigued. It produced no great results, no grand achievements, no last-
ing peace. It did but prove that the strength which had departed from
England during the two previous reigns had slumbered, but was not with-
ered. The earlier history was, as many of England's great wars have
been, comparatively unsuccessful. The parties into which the nation was
divided prevented the unanimity necessary to great deeds. They agreed
only in robbing the people. Public principle was with them a public jest.
Incapacity and corruption pervaded all branches. By corruption a Par-
liamentary majority was procured, and through incapacity the commerce
of the country was decaying. Talent was only employed in devising its
own benefit ; patriotism was perverted ; national virtue was forgotten ;
and the allies found that on sea and land the enemy had the advantage.
The navy was daring, but divided ; the admirals were accused of disaf-
fection. While the foe was intercepting our merchandise in the Channel,
the vessels of England were building in the docks. On the sea, our own
peculiar boast, we were dishonored ; our flag was insulted ; and English
admirals retreated before French fleets. Ships of war were burnt ; mer-
chant-vessels were sunk ; and a million of merchandise was destroyed.

But the clamor of the people reached her councils. It was said our
plans were betrayed to the enemy ; treachery was justifiably suspected ;
and all who were familiar with the period will join the writer in thinking
it not only possible, but probable.

During these trials the spirit of William remained unchanged ; and,
rejecting all overtures from France, he exhibited to the world the soldier-
ship for which he was remarkable. At Namur he fought in the trenches,
ate his dinner with the soldiers, animated them with his presence, shared
their dangers, and won their hearts. Namur capitulated, and the scene
changed. The French power was shaken in Catalonia ; its coasts were
assailed ; its people were suffering, and Louis, whose great general was
dead, was sufficiently humbled to renew his proposals for peace, which,
after nine years' war, costing Europe 480 millions of money and 800,000
men, was gained by the pacification of Ryswick.

A deep thinker of the present day has said of the war anterior to 1688,

First Exchequer- Bills.

and the argument is supported by that school of which Cobbett was
chief, " The cost happily fell upon those who lived about the time, it
was not transmitted to posterity, according to the clever contrivance devised
in a more enlightened and civilized age. They spent their own money,
and not that of their grandchildren. They did as they liked with their
own labor and its results ; they did not mortgage the labor of succeeding
generations."

Men do not argue thus, ordinarily. The case is very similar to that of
a land-proprietor mortgaging his estate to defend it from a suit which en-
dangers it. His posterity may regret, but they cannot complain ; they
know it is better to have the estate partially mortgaged than not to have
an estate at all. It seems, to the writer, similar with the national debts of
the reign of William. He was bound to defend the people who had
chosen him ; war was then, as now, a popular pastime ; and William is
no more to be blamed that he was not in advance of the time, than the
nobles of the present day are to blame because they bring up their
younger sons to be shot at for glory and a few shillings a day, instead of
seeing, as their successors will probably see, the anti-progressive and anti-
Christian nature of the principle thus supported.

The one great evil was, that the difficulty of getting money tempted
William to borrow on irredeemable annuities. Had he borrowed only on
annuities terminable in a century, he would have attained his money at a
little extra cost, but the pressure on the people would have decreased
year by year, the credit of the government have increased, and the dis-
content of the nation been less.

If, however, any blame be attached to the government of William,
how much greater must be that which is attached to succeeding minis-
tries. They knew, for they felt, the evil of perpetual debts. Sir Robert
Walpole said, when the nation owed 100 millions it would be ruined ; but
he, and those who preceded with those who followed him, persisted in
neglecting the only principle of action which could save the country. It
is the misfortune of governments to abide by that which is only venera-
ble from its antiquity, and persist in following precedents when they
should act upon principle. They forget and the fact cannot be urged
too strongly that government is a progressive science, and that im-
provement is a law of nations a-s well as of nature.

In 1696, while the gold was being recoined, exchequer-bills, principally
for 5 and 10, were introduced. Being issued on the security of gov-
ernment, they supplied the place of coin, and were found a great conven-
ience, acting as state counters, which passed as money, because the peo-
ple knew that the government would receive thern at full value. The
Lords of the Treasury were authorized to contract with moneyed men to
supply cash ; and though these bills were at one time at a discount, their
credit rose daily, until they reached 1 per cent, premium. They at first
bore no interest ; but when they were reissued, 7 12s. per cent, per
annum was paid, and they became a favorite investment. The genius of
Mr. Halifax invented them ; and it has required no genius on the part of
succeeding ministers to issue a supply whenever the wants of the govern-
ment have demanded them. When it is not convenient to pay these se-

Fraud in Exchequer- Bills.

curities off, and they have accumulated to an amount which attracts the
notice of the Opposition, or is calculated to depress the price, the consent
of Parliament is procured, and they are liquidated by being added to the
fixed debt of the country. They now form a regular supply to the min-
istry, and are part of the floating or unfunded debt of England, bearing
a premium or discount in proportion to the credit of the nation.

The first fraud in exchequer-bills occurred within a year of their crea-
tion ; when receivers-general, members of Parliament, and deputy ac-
countants formed a confederacy fraudulently to indorse some of these se-
curities, to which their position gave them access. The robbery was dis-
covered ; and a Mr. Reginald Marryot, one of the accomplices, saved
himself by discovering the plot. The House of Commons expelled from
its members the men whose dishonor was increased by their position ;
and, as the estate of Mr. Charles Buncombe, one of the accused, was
worth 400,000, they fined him 200,000, being the amount wrongful-
ly circulated. In the House of Lords it fell to the Duke of Leeds to give
the casting vote. Mr. Buncombe's estate was saved, but the Duke's cred-
it suffered, for he gave his decision in favor of the defaulter ; and it was
said that Mr. Buncombe paid no inconsiderable sum for the benefit he re-
ceived at the hands of his Grace. The charge was never brought home ;
but the Buke's after-conduct gave a sufficient coloring to the suspicion.

The first foreign loan was negotiated in 'Change Alley in 1706. The
victories of the Buke of Marlborough had raised the pride of the English
people ; and even 'Change Alley possessed a somewhat similar feeling.
When, therefore, his Grace proposed a loan of 500,000 to the Emperor,
for eight years, at 8 per cent., on the security of the Silesian revenue, it
was received with acclamation, and was filled in a few days by the first
commercial names of England.

Buring that period, which, now a romantic, was then a terrible reality,
when it was known, in 1715, that the best families in the North of Eng-
land had assembled in arms to change the dynasty, no pains were spared
by the jobbers to procure correct and to disseminate false intelligence :
and it was with mingled feelings of alarm and pity that the inhabitants of
a small town between Perth and the seaport of Montrose where James
embarked after his unhappy expedition saw a carriage and six, travel-
ling with all the rapidity which the road would allow. It was known that
the rebel army was dispersed ; that its chiefs were scattered ; and that
the unfortunate Stuart was wandering through the country, with life and
liberty alike endangered. It excited, therefore, no surprise in the village
when the carriage was surrounded, and the apparent prize conveyed with
great ostentation towards London. Letters soon reached the city that the
fugitive Stuart was taken, and the letters were confirmed by the story re-
lated, which quickly reached London. The funds of course rose, and
the inventors of the trick laughed in their sleeves as they divided the
profit. By this time the jobbers must have reached a somewhat high po-
sition, as, the same year, one Quare, a Quaker and a celebrated watch-
maker in 'Change Alley, having successfully speculated in the shares and
funds with which it abounded, was of sufficient importance to invite to
the marriage-feast of his daughter, Sarah Jennings, Buchess of Marlbor-
2* 17

Political Hoax on 'Change.

ough, and the Princess of Wales, who, with three hundred guests of dis-
tinction, graced the wedding entertainment.

But 'Change Alley was notorious for other dealings than those in the
funds. When that desperate struggle for power occurred between the
old and new East India Company ; when their varying claims were on
every man's tongue, and their bribes in every man's hand ; the election
of a member of Parliament was an affair of moment. The partisans of
each Company sided with their friends ; bought boroughs ; shed their
money lavishly and largely ; used every art that self-interest could de-
vise ; and so extensive was the interference of the brokers, that the only
question heard in 'Change Alley was, " Is he for the New or the Old
Company ? " It was the touchstone of a principle more sacred than the
Hanoverian succession, and more important than England and Hanover
united. It was probably found profitable ; and it was said in 1720, that
elections for members of Parliament came to market in 'Change Alley as
currently as lottery-tickets.

The first political hoax on record occurred in the reign of Anne.
Down the Queen's Road, riding at a furious rate, ordering turnpikes to be
thrown open, and loudly proclaiming the sudden death of the queen,
rode a well-dressed man, sparing neither spur nor steed. From west to
east, and from north to south, the news spread. Like wildfire it passed
through the desolate fields where palaces now abound, till it reached the
city. The train-bands desisted from their exercise, furled their colors,
and returned home with their arms reversed. The funds fell with a sud-
denness which marked the importance of the intelligence ; and it was re-
marked that, while the Christian jobbers stood aloof, almost paralyzed
with the information, Manasseh Lopez and the Jew interest bought eager-
ly at the reduced price. There is no positive information to fix the de-
ception upon any one in particular, but suspicion pointed at those who
gained by the fraud so publicly perpetrated.

The invasion of 1715, as it caused extra expenses, demanded extra
grants. The House of Commons voted them ; but the House of Peers,
a portion of which possessed strong Jacobite feeling, attempted to modify
without mending it. Though they did not reject the bill, the lower house
resented the mere interference. At an early hour on the morning of the
13th February, Lord Harcourt went to the House of Peers, and made an
anxious search for precedents of amendments to money bills. The
search proved unsuccessful, as, since the Restoration, the Commons had
defended their right of not allowing the Lords to make any alterations in
these acts. A committee was appointed, and the Peers fought bravely
for their claim ; but though the court was willing to support them, money
was so immediately necessary, that, at the request of the government, they
yielded under protest.

Charitable Corporation Fraud.

CHAPTER IV.

Charitable Corporation Fraud. 7/5 Discovery. Appalling Effects and Rem-
edy. Marlborougft s Victories, their History, and the Loans they brought.
Augmented Importance of the Stock Exchange. Dislike to the Members.
Increased Loans. Difficulties in procuring them. Statement of Sir Robert
Wa/pole. Gifts of Contractors to Clothiers. First Payment of Dividends
by the Bank. South-Sea Anecdotes.

IN the early part of the eighteenth century, a prospectus was issued to
the commercial world and the members of 'Change Alley, in which the
wants of the needy and the infamy of the pawnbrokers, the purest
philanthropy and a positive five per cent., were skilfully blended. It
was shown that then, as now, the poor were compelled to pay a greater
interest than the rich ; that thirty per cent, was constantly given by the
former on a security which the usurer took care should be ample ; and it
was proposed that the wealthy capitalist should advance, for the benefit
of the needy, a sufficient sum to enable the company to lend money at
five or six per cent. The proposal proved eminently successful. A
capital of 30,000 was immediately subscribed, a charter obtained, and
the " Charitable Corporation," the object of whose care was the neces-
sitous and industrious poor, appeared to flourish. For some years the
concern answered, the poor received the assistance which they required,
and the company was conducted with integrity. In 1719, however, their
number was enlarged ; their capital increased to 600,000 ; an aug-
mentation of business was looked for ; cash credits were granted to gen-
tlemen of supposed substance ; and the importance of the corporation
was unhappily recognized by that numerous class of persons compelled
to pay in maturity for the excesses of youth. They acted also as bank-
ers, and received deposits from persons of all classes and conditions.
Its direction boasted men of rank, its proprietary men of substance, and
its executive men of more capacity than character. The cashier of the
company was a member of the senate ; Sir Robert Sutton, a director,
was one of his Majesty's Privy Council ; and Sir Archibald Grant, who
took a prominent part in the affairs of the corporation, was also a mem-
ber of the lower house. Every confidence was reposed in such a body,
and it was regarded as a rich and prosperous society.

Under these circumstances, the surprise of the public may be con-
ceived when it was first whispered, and then openly announced, that the
cashier, with one of the chief officers, had disappeared in company.
The alarm spread to the proprietors ; the public participated ; the poor
assembled in crowds ; the rich clamored for information ; a meeting was
called to inquire into the case, when a most pernicious, but scarcely
comprehensible, piece of villany was unravelled, and a most disgrace-
ful tissue of fraud discovered. 30,000 alone remained out of half a
million. The books were falsified ; money was lent to the directors on

Public Distress.

fictitious pledges ; men of rank and reputation were implicated ; suspicion
and censure followed persons of importance. Some managers were
found to have connived at scenes so disgraceful, that their character was
lost for ever. Many had concerted active plans of fraud, which ended
alike in their own ruin and the ruin of the corporation ; while others
were guilty of personally embezzling the funds of the company. Peti-
tion after petition was presented to the Commons. A bill was brought in
to prevent the defaulters from leaving the kingdom ; and the scorn of all
England pointed at the men who, under the guise of charity, had en-
riched themselves. The interest which was taken in the discovery by
the entire country attracted the attention of the Jacobites ; and, as one of
the party had fled to Rome with the spoils, the Pretender endeavoured to
enlist the sympathy of the nation, through one Signor Belloni, who wrote
to the committee, stating that the refugee had been seized and placed in
the castle of St. Angelo. The Whig party, ever jealous of the Pretender,
voted that the letter should be burned by the hangman at the Royal Ex-
change.

The distress occasioned by this bankruptcy was appalling, pervading
nearly every class of society. Large sums had been borrowed at high
interest. The small capitalist was entirely ruined ; and there was scarce-
ly a class in English life which had not its representative and its sufferer.
The poor were unable to get their goods ; the rich were robbed of their
jewels ; families accustomed to affluence were starving ; delicate women,
hitherto irreproachable, were compelled to exchange their persons for
bread. Similar evils have been known to exist during sieges ; and, in
the public streets of Lisbon, women of unblemished virtue offered them-
selves for sale during its occupation by the French ; but the writer be-
lieves there is no other parallel in commercial history.

All that the wisdom of the senate could devise was attempted to miti-
gate the evil. The revenge of the losers was appeased by several mem-
bers being expelled the house ; their fear of loss was reduced by the
confiscation of the estates of the offending parties ; a lottery was granted
for the advantage of the sufferers ; and though a dividend of nearly ten
shillings was eventually paid, the fraud of the Charitable Corporation was
remembered long after the evils caused by it had ceased to exist.

The next great increase of debt was through the War of Succession in
Spain, to the crown of which several princes laid claim. According to
the ordinary rule of inheritance, the Dauphin, by virtue of the marriage
of Louis XIV. with the eldest sister of the king, should have succeeded ;
but as all right to the throne had been solemnly renounced on the mar-
riage, it was supposed that the claim was vacated ; and the principal
powers of Europe, knowing the necessity that so great an inheritance
should not descend to any state possessed of territorial importance, formed
the celebrated partition treaty.

By this, France, England, and Holland agreed that Spain, the Indies,
and the Netherlands should descend to the Archduke Charles, and, in
return, that France should be possessed of the rich province of Lorraine.
There is no doubt that governments regard treaties in proportion to the
physical rather than the moral necessity to abide by them ; and France,

Effect of Marlborougtfs Victories.

under Louis Quatorze, was no exception to the rule. A succession of
cabals in Spain gave the latter the influence he required. His ambassa-
dor won the court and city ; the Archbishop of Toledo was of his party,
and gained the Spanish king, who, sick body and soul, priest-ridderr, a
prey to mental and physical agony, was, after a succession of intrigues,
induced to fix his name to that will which annexed the splendid possession
of the empire of Spain to the grandeur of France.

At once Louis violated the partition treaty, accepted the noble legacy
for his grandson, and sent the whole court of France to accompany him
to the Pyrenees, that frontier which he said in his pride had ceased to
exist. When the news reached William, he was at the Hague, but in-
stantly returned to London. Vigorous preparations were made ; but he
did not live to see the declaration of the war, which began in 1782,
agitated Europe for thirteen years, and added so much to the great debt
of which this volume treats.

England, Holland, and the Empire were opposed to France, Spain, and
Bavaria ; and the war thus commenced was a memorable contest. Marl-
borough and Peterborough, than whom England boasts none greater, made
her name a word of dread for many years. The knight-errantry of Peter-
borough conceived schemes which only his ardent and fiery imagination
could achieve. He took towns by storm, under circumstances little less
than marvellous ; he reduced the largest and strongest cities of Europe
with a handful of soldiers ; he made forced marches, shared the fatigues
of his men, and took entire reinforcements prisoners. With 3,000 troops
he harassed a regular army, cut off communications, and raised sieges ;
he forced towns with horse-soldiers, and chivalrously mortgaged his es-
tates to pay the expenses incurred in the cause of his country.

The victories of John Churchill, Duke of Marlborough, were more
important to the nation than those of the adventurous Peterborough ; and
if his glory was tarnished by the love of gold, yet the name of Marl-
borough as a captain is unsullied. The battle of Blenheim was his first
great achievement in the War of Succession, and it made the people con-
sent to pay the additional taxes imposed upon them. Innumerable tro-
phies, hundreds of flags and standards, tents, cannon and mortars,
casks and barrels filled with the precious metals, evinced the glory
of the contest, and added to the pride of the nation. The thanks
of the House were voted to the Duke ; medals were struck in his honor ;
Addison celebrated him in poetry ; but dearer far to Marlborough than
medal, poetry, or thanks, was the rich manor and the noble mansion
of Woodstock, voted to him by the nation. Scarcely had the people
recovered from the joy occasioned by the battle of Blenheim, and from
the increased taxation which ensued, than another battle that of
Ramilies seized them with delight. Forgetful of the consequences,
men talked of the old days of England, of the ancient victories of her
armies, of the time when the great Cromwell made the English name
terrible, and, in their excitement, they magnified the grandeuf, and
diminished the cost. The pride of Louis was indeed humbled. He
made proposals for a congress ; he tampered with the Dutch ; he be-
sought the interposition of the Head of the Church ; he offered to cede

Treaty of Utrecht.

Spain, Milan, Naples, or Sicily ; and felt bitterly the consequences of
having provoked the vengeance of the island he hated. Ambition had,
however, seized upon the nation ; conquest only was thought of ; and,
remembering the glory of the past, the English people deemed them-
selves entitled to some privilege for the blood which was shed. They
forgot that a new campaign would bring new costs ; and they forgot,
what their successors yet feel, that every fresh victory brought a fresh
loan. Oudenarde, the third of that splendid series of victories which has
made the name of Marlborough renowned in the land, was followed by
Malplaquet, the glory of which was superior to its results, and the blood
of which was shed to maintain the court influence of the Duke.

But a change of ministry brought a change of measures ; and a Tory
government refused to maintain a Whig policy. The ministers tri-
umphed, and the treaty of Utrecht was concluded. Then arose that
war of words which enlisted the pens of Steele, of Addison, of Swift,
and of a host of other and lesser spirits. The Tories said the Whigs had
sold us to the Dutch, to fill the pockets of Marlborough. The Whigs
said the Tories had sold us to the French, to facilitate the return of the
Pretender. The waste of life, the suspension of trade, the accumulation
of debt, without an adequate return, were so terribly evident, that the
Commons remonstrated, and told her Majesty that ,35,302,107 of the
supplies were not accounted for.

It must be evident that every fresh war, every new loan, and every
public peculation, increased the importance of the members of the Stock
Exchange ; and when men saw the broker and jobber assuming a posi-
tion the public was unwilling to grant, they mistook the effect for the
cause ; and a hundred voices were raised, and a hundred essays written,
to prove that the brokers of 'Change Alley were the bane of the nation.
A member could hardly make a financial speech, a pamphleteer write a
political pamphlet, or a dramatist employ his pen for the public, without
dragging in the jobber as an illustration and a cause of the misery of
England. Those who had lost their money in the many speculations
with which the 'Change abounded, deemed also thejy had earned a right
to decry it. The following is a specimen of their opinion : " It is a
complete system of knavery, founded in fraud, born of deceit, and nour-
ished by trick, cheat, wheedle, forgeries, falsehoods, and all sorts of
delusions ; coining false news, whispering imaginary terrors, and preying
upon those they have elevated or depressed." Archibald Hutcheson,
whose life was afterwards endangered from the determined manner in
which he opposed the South-Sea bubble, says that the jobbers vied with
the first nobility in the kingdom. Pope wrote,

" Statesmen and patriots ply alike the Stocks,
Peeress and butler share alike the box ;
And judges job, and bishops bite the town ;
And mighty dukes pack cards for half-a-crown."

At any rate, it is certain that, if the national glory was aggrandized, the
national debt increased in proportion. From 16 millions to 54 was fear-
fully felt, thirty-seven millions and a half being raised by loan, besides
thirty millions in taxes, during the war of the Spanish succession.

Projector of the South' Sea Bubble.

In 1716, great difficulty was experienced in procuring a loan of
600,000. The interest offered was four per cent. ; and while the
propriety of the loan was being debated on the second evening, Mr.
Lechmere entered the House hastily, and told them that only 45,000
had been subscribed. Sir Robert Walpole instantly rose, and said, " I
know that the members of the Stock Exchange have combined not to
advance money on the loan. Every one is aware how the administration
of this country has been distressed by stock-jobbers." The interest of
four per cent, appeared so low to men accustomed to the enormous pre-
miums of a few years previous, that they treated the proposed terms with
contempt, and enlisted the sympathy of the public by reporting that it
was the first step towards the reduction of the interest on the national
debt. When the same minister proposed a loan of 1,700,000, to
supply a deficiency, the opposition was so great, that, had not Sir Robert
appealed to an empty exchequer, and declared that the debt had been
incurred by a previous government, he would have been refused. The
feelings of the House were greatly incensed by the discovery that the
money was jobbed away with unequalled recklessness ; and public-
spirited men were not wanting to resist, in the name of the country,
such shameless expenditure. They protested, because and the protest
drawn in 1729 would do for 1849 " the national debt ought not to be
increased when the taxes are heavily felt in all parts of the country ;
when our foreign trade is encumbered and diminished ; when our manu-
factures decay ; when our poor daily multiply ; and when national ca-
lamities surround us." The report of the commissioners appointed to
inquire into public accounts sanctioned the opposition which such men as
Sir John Barnard gave to unjust demands. They proved that colonels
received large sums from clothing contractors, as premiums for their
favor, and that 1,400 had been given for a single contract. " The
practice," said the report, " is so notorious and universal, that it wants
no representation." Some barefaced practices were related in the same
document ; nor can there be any wonder that, with such gross misman-
agement, it was said, " The army was in the field, no money in the
treasury, none of the remitters would contract again. The Bank
refused to lend 100,000 on good security. The navy was 11 millions
in debt, and the yearly income greatly deficient."

In 1717 the Bank first undertook the payment of dividends to the
national creditors, previous to which they were paid quarterly ; when,
however, they were undertaken by the Bank, this plan was found incon-
venient, and since that period they have been paid half-yearly.

Sir John Blunt was the projector of the South-Sea bubble, which, in
1720, produced such extraordinary effects in England. As the scheme
did not at first prove successful, rumors were spread that Gibraltar and
Port Mahon would be exchanged for Peru. The stock soon rose to 1,000
per cent., and the excitement lasted till September, by which time it had
sunk to 150. Several eminent goldsmiths and bankers were obliged to
abscond ; and every family in the kingdom felt the shock.

In other works the anecdotes of this memorable period have been pre-
sented in proportion to their effects upon commerce ; in the present, those

Fortunes lost or won.

only will be given which either affect the Stock Exchange or possess a
general interest.

On May 15th, 1719, the king went abroad, and many who went with
him sold all their funds. The Bank of England was accused of assisting
the bubble by lending money, for the first time, on the security of its
stock ; " and this," said Mr. Aislabie, " furnished an additional supply of
money to gamesters in the Alley." The stories of the period are very
widely spread, and prove how all ranks were affected. The Marquis of
Charidos embarked 300,000 in it, and the Duke of Newcastle advised
him to sell when he could make the tolerable profit of cent, per cent. The
Marquis was greedy, hoped to make it half a million, and the advice was
declined. The panic came, and the entire investment went in the shock.

Samuel Chandler, the eminent nonconformist divine, risked his whole
fortune in the bubble, lost it, and was obliged to serve in a bookseller's
shop for two or three years, while he continued to discharge his min-
isterial duty.

The elder Scraggs gave Gay .1,000 stock, and, as the poet had been
a previous purchaser, his gain at one time amounted to .20,000. He
consulted Dr. Arbuthnot, who strongly advised him to sell out. The
bard doubted, hesitated, and lost all. The doctor who gave such shrewd
advice was too irresolute to act on his own opinion, and lost 2,000 ; but,
with an enviable philosophy, comforted himself by saying it would be
only 2,000 more pairs of stairs to ascend.

Thomas Hudson, a native of Leeds, came to London, and filled the
situation of government clerk. Having been left a large fortune, he re-
tired to the country, where he lived until, tempted to adventure in the
scheme, he embarked the whole of his fortune in it. After his loss he
came to London, became insane, and Tom of Ten Thousand, as he
called himself, wandered through the public streets, a piteous and pitiable
object of charity.

One tradesman, who had invested his entire resources in the stock,
came to town to dispose of it when it reached 1,000. On his arrival it
had fallen to 900, and as he had decided to sell at 1,"000, he determined to
wait. The stock continued to decline, the tradesman continued to hold,
and became, as he deserved, a ruined man.

Others were more fortunate. The fine mansion of Sir Gregory Page,
at Blackheath, was made out of the profit made by his guardians ; and
two maiden sisters, who sold the stock at 970, reinvested their money in
navy-bills, at a discount of 25 per cent., which in a very short time were
paid off" at par.

The wags of the day were not idle. A pretended office was opened
in 'Change Alley to receive subscriptions for raising one million. The
people flocked in, paid five shillings for every thousand they subscribed,
fully believing they would make their fortunes. After a large sum had
been subscribed, an advertisement was published, that the people might
have their money without any deduction, as it was only a trial to see how
many fools might be caught in one day.

Similar anecdotes to these are scattered over the private and the pub-
lic histories of the period ; but they have been rendered too familiar by
recent works to narrate them in the present volume.

Thomas Guy.

CHAPTER V.

Life of Thomas Guy. Imposition in Sailors' Tickets. Foreign Loan at-
tempted. Sir John Barnard. Expresses of the Jobbers. Foreign Com-
missions. Origin of Time-Bar gains. Attempt to stop them. Its Inade-
quacy. Proposal to reduce the Interest on the National Debt. Opposition
of Sir Robert Walpole. New Mode of raising Loans. Comparative Interest
in Land and Funds. Punishment of Manasseh Lopez. The first Reduc-
tion of Interest. Life of Sir John Barnard.

IN 1724 died the founder of Guy's Hospital, and a sketch of this re-
markable man's career is a curious picture of the period. The son of a
lighterman and member of the senate, one year the penurious diner
on a shop-counter, with a newspaper for a table-cloth, and the next the
founder of the finest hospital in England, at one time a usurious
speculator, and at another the dispenser of princely charities, the
wearer of patched garments, but the largest dealer in the Alley, be-
ginning life with hundreds, and ending it with hundreds of thousands,
Thomas Guy was one of the many remarkable men who, tempted from
their legitimate pursuit, entered into competition with the jobbers of the
Stock Exchange, and one of the few who devoted their profits to the
benefit of a future generation.

His principal dealings were in those tickets with which, from the time
of the second Charles, the seamen had been remunerated. After years
of great endurance and of greater labor, the defenders of the land were
paid with inconvertible paper, and the seamen too often improvident
were compelled to part with their wages at any discount which the
conscience of the usurer would offer. Men who had gone the round of
the world, like Drake, or had fought hand to hand with Tromp, were
unable to compete with the keen agent of the usurer, who, decoying
them into the low haunts of Rotherhithe, purchased their tickets at the
lowest possible price ; and skilled seamen, the glory of England's navy,
were thus robbed, and ruined, and compelled to transfer their services to
foreign states.

In these tickets did Thomas Guy deal ; and on the wrongs of these
men was the vast superstructure of his fortune reared. But jobbing in
them was as frequent in the high places of England as in 'Change Alley.
The seaman was poor and uninfiuential, and the orders which were re-
fused payment to him were paid to the wealthy jobber, who parted with
some of his plunder as a premium to the treasury to disgorge the re-
mainder. By these means, and by fortunate speculations during the
South-Sea bubble, Mr. Guy realized a fortune of < 500,000.

It must be borne in mind, that, a century and a quarter ago, half a
million was almost a fabulous fortune. It was only to be acquired by
speculation in the funds, and by ventures which merely commercial deal-
ings failed to produce. In the literature of the past century, a " plum "
3 25

Seamen's Lottery Tickets.

is mentioned as the great prize of a lifetime, and as the extent of mer-
cantile ambition. The enormous sums lately realized were then almost
unknown, or arose from some chivalrous adventure, such as marked the
lives of a Robert Clive or a Warren Hastings ; and it was left for the
present century to witness the achievement of fortunes which in the past
would have been beyond credence.

In attaining so great a result, Mr. Guy was doubtless assisted by his
penurious habits ; but he did not possess a penurious mind. The en-
dower of a princely charity, the founder of alms-houses, the enricher of
Christ's Hospital, the support of his relations, and the friend of the poor,
must be regarded as one of those contradictory characters which, at all
periods and in all portions of the world, have marked the human race.
His dealings in the Stock Exchange were continued to a late period of
his existence. In 1720, he speculated largely in the South-Sea Stock ;
and in 1724 he died, at the age of eighty-one, leaving by will 240,000
to the hospital which bears his name. His body lay in state at Mercer's
Chapel, was carried with great funeral pomp to St. Thomas's Hospital,
and on February 13th, 1734, just ten years after his death, a statue was
erected to his memory in the square of that asylum, partially raised by
profits from the hard earnings of English seamen.

It was, indeed, to this improvidence in supplying funds to meet the
demands for the navy that the South-Sea Company owed its origin. So
largely had the unpaid sailors' tickets increased, that nine millions were
unprovided for. Cash was scarce, the holders were clamorous, and Par-
liament, as a premium for forbearance, erected them into that body which
ended so disastrously for the commercial interests of England.

In 1730, a loan of 400,000 was attempted for the Emperor of
Germany. 'Change Alley was ready to advance it on sufficient interest
and sound security ; but Sir Robert Walpole brought in a bill to prohibit
his Majesty's subjects and others resident in the kingdom from advancing
money to any foreign state, without license from the king under his
privy seal. The opposition experienced by the minister was very strong.
The great city commoner spoke against the bill, and it required all the
power of Sir Robert Walpole to counterbalance the influence of Sir John
Barnard in a matter pertaining to business.

It was very natural that men's minds should be turned to that portion
of the town which, ever and anon, gave signal symptoms of great frauds,
great gains, and great gambling ; and Sir John Barnard endeavoured, in
1732, to draw the attention of the House of Commons to the dealings and
the doings of the Stock Exchange. It had, even at this early period, a
complete and organized system. The expresses of its rich members
came from every court in Europe, and beat as the expresses of job-
bers always have the messengers of the government. Sir Robert Wal-
pole not only declared this, but with great naivete added, " It is because
they are better paid and better appointed." The very fact that brokers
did beat the government despatches was regarded as a crime ; and the
public continued, year by year, to pour its maledictions on the frequent-
ers of 'Change Alley.

The funds were said to be the nursery of fraud. In the leading com-

Origin of Time- Bargains.

panies the interest of the citizen was sacrificed to the jobber. The whole
town was converted into a corporation of brokers and usurers, which
could lie the government into credit one week and out of it the next.
The magistracy of the city encouraged it, and the aristocracy of the city
pursued it. 'Change Alley was called a gaming-house publicly set up
in the middle of London, towards which the heads of our merchants and
tradesmen were turned instead of to their legitimate pursuit ; and it was
said that ,80,000 were paid annually by foreigners in the shape of
commissions to the brokers of the Alley. But it was to the bargains for
time that public attention was principally pointed by the city member.
The origin of these bargains is obvious, and may be traced to the period
of six weeks in each quarter, when the bank books were as it was then
thought necessarily closed to prepare for the payment of the dividend.
As no transfer could be made during this period, it naturally enough
became a practice to buy and sell for the opening. The habit grew by
what it fed on ; and, in time, periodical dates for the payment of funds,
purchased or sold when it could not be transferred, were fixed on by the
Stock Exchange Committee, at intervals of about six weeks. As in
these transactions the possession of stock was unnecessary, and the pay-
ment of the difference in the price was sufficient, bargains for time be-
came common, and not only English, but foreign capitalists, were attract-
ed by the chance of gain, while the Hebrews flocked to 'Change Alley
from every quarter under heaven.

In consequence of the view which Sir John Barnard took of these
facts, he succeeded in carrying that enactment which, intended to pre-
vent gambling in the funds, has been utterly and singularly powerless in
its effect. It provided that no loss in bargains for time should be recov-
erable in the courts, and placed without the pale of the law all such
speculations. One hundred and sixteen years have passed, the act is
still in force, and speculative bargains have not only increased, but form
the chief business of the Stock Exchange. The greatest corporation in
the world has availed itself of the principle, and the effect of the statute
is, not to prevent respectable men from speculating, but to make rogues
refuse to pay their losses, knowing that, while the law is inefficient, the
blackboard of the Stock Exchange is their only punishment. To such
men such punishment is ridiculous ; they only feel through the purse, and
in that they know they are safe by virtue of an act in which they rejoice.

That a feeling of gambling was encouraged is indisputable, and the
attempt of Sir John Barnard was, therefore, honorable. But this pro-
pensity seems a natural principle of humanity. The savage in a state of
nature, and the peer at the highest point of civilization, alike indulge in
it. Every man who trades beyond his power to .pay, every merchant
who purchases goods on delivery, is, strictly speaking, a gambler ; and it
is well known to be a common practice of the first merchants to buy
goods for arrival without the slightest intention of receiving them, and
directly a profit can be gained, or too great a loss averted, they are re-
sold without even the bill of lading being visible to the buyer.

It is these things which lead to disgraceful bankruptcies. The intel-
ligent author of " Partnership en Commandite " says : " On the banks

Reduction of Interest on National Debt.

of the Danube, the Vistula, the Rhine, and the Tagus, on the shores
of the Baltic and the Mediterranean, on the plains of Poland, I have
met with men who have asked me for charity, because they had been
ruined by connection with some of the first English houses."

The first effect of Sir John Barnard's Act was serious ; and bargains
for time, or the " race-horses of 'Change Alley," as they were termed,
were said to have expired. It was soon found, however, that to make
the brokers responsible would answer every purpose ; and business flour-
ished as gayly as if the father of the city had never had an existence.

Though this measure was with difficulty passed, the wonder is that it
passed at all, as the reasoning brought in its favor was very slight ; and
the following is a fair specimen of the speeches in its behalf :

" The broker comes to the merchant, talks of the many fatigues and
dangers, the great trouble and small profits in the way of trade. He then
tells him if he will allow him to dig in the rich mine of 'Change Alley,
he could get more in a day than he could by his trade in twelve months.
The merchant is persuaded, he engages, goes in for some time, and is
quite undone. His just creditors are surprised. 4 What,' say they, ' this
man had a good stock to begin with, and he has had a good trade for
several years ; he never lived extravagantly ; what is become of his
effects and his money?' They inquire, and find that the whole was
gamed away in 'Change Alley."

The fears of the brokers outran their discretion as soon as the bill
passed into law ; and the maledictions poured upon Sir John were loud,
deep, and frequent. They thought that the principal and most profitable
part of their trade was departed ; and it was declared how truly, time
has since shown that it would be only possible to get an estate by the
slow, dull way of commerce. Every effort was made to ruin his repu-
tation and his character ; but both were too firmly established to receive
any injury from the malevolent stories which were currently circulated.

A proposition was made in 1737, by the same gentleman, to reduce
the interest on the national debt from four to three per cent. Nothing
could be more just than this, as the public might either receive their
principal in full, or one per cent, less interest. The House was at first
disposed to entertain the proposal with the fairness it merited ; but the
moneyed men rose in a body, and Sir Robert Walpole, fearing to disoblige
them, fearing to lose those votes on which he had hitherto relied, and en-
vying also the popularity Sir John might acquire, determined to crush the
scheme. He interested the king and queen ; he employed his ministerial
power ; he intimidated some, he bribed others, he puzzled and persuaded
more ; until, his purpose being effected, the bill than which nothing
could be more reasonable was rejected. The popular feeling attrib-
uted this opposition to the royal family, who possessed great funded
property ; but to popular feeling, unless it rose to a storm, as with the
Excise Bill, Sir Robert Walpole was very indifferent.

In the same year, an inquiry being instituted into the books of the
Bank of England, it was calculated that ten millions were held by for-
eigners in the English funds ; a remarkable proportion of the amount at
which the national debt then stood.

Reduction of Interest on National Debt,

In the reign of George II. a new mode of raising loans was adopted.
Instead of varying the interest according to the state of the money-
market, the rate was fixed from three to five per cent., and the subscrib-
ers remunerated by an additional amount of stock. It was the first
public announcement that the debt was perpetual ; and has made the
present principal two fifths more than the sum originally advanced. In
the earlier history of borrowing, the government named its own terms ;
and as this generally afforded a profit, the loan was soon filled. If,
however, the ministerial proposals were not sufficiently liberal, the exec-
utive altered the terms to the real value of money ; and it is by no means
an uninstructive fact, that it was found in 1748, after a close calculation,
that for thirty previous years land had produced a higher interest than
the funds.

Although an act had been passed by which it was declared illegal for
one individual to have more than twenty lottery-tickets allowed him, it
soon became notorious that the rule was flagrantly and frequently vio-
lated. Manasseh Lopez, whose dealings on the Stock Exchange entitled
him to be termed a leader, had bribed the commissioners to permit an
indirect violation of the law, by accepting a long list of feigned names as
candidates for tickets. He was prosecuted by the Attorney-General,
and sued in the Court of King's Bench. A fine of one thousand pounds
was awarded as punishment ; but as he had made more than fifty times
the amount, it might be regarded as a very successful speculation.

The first reduction in the interest of the national debt from four to
three per cent. was effected in 1750, and was received with a storm
of indignation similar to that which arose in 1737, on the mere attempt.
Sir John Barnard, to whom every thing connected with the funds was
of importance, is mentioned as having proposed it to Mr. Pelham, who
brought it forward in the House of Commons. The best men in the
city protested against so bold a measure, and the foes of the minister
encouraged the opposition of the fundholder ; his friends overwhelmed
him with entreaties to withdraw the motion ; and every engine which
could be brought into operation by the moneyed interest was employed.
Reasons which time has since repudiated, fallacies which almost re-
pudiated themselves, evils which had no existence save in the brain
of the prophet, were freely circulated. It was said that the landed
gentry and the noble families of England would be ruined, and their
children would become beggars ; that the interest of younger sons' por-
tions would nM 'enable them to associate with the cooks and coachmen of
their elder brothers ; and that merchants, shopkeepers, and tradesmen
would be ruined. The farmers would lose their farms ; families would
be undone ; and such a deluge of distress be brought upon all ranks, that
the consequences would be fatal to that " free and happy constitution "
which has been so often ruined in the brains and in the prophecies of
partisans.

Its first reception was so lukewarm by the minister's friends, and the

opinions of the people so strong, that, coupled with the previous failure

of a similar measure, its miscarriage was confidently calculated. " Mr.

Pelham," says the flippant chronicler of the times, " who has flung him-

3* 29

Sir John Barnard.

self entirely into Sir John Barnard's hands, has just miscarried in a
scheme for the reduction of interest, by the intrigues of the three great
companies and other usurers." Horace Walpole mistook the voice of
his little circle for the voice of the country. The scheme did not mis-
carry ; and it is remarkable that this, the first reduction in the interest of
the national debt, was planned in a most masterly manner, and reflected
great honor upon Sir John Barnard. A loss of one per cent, upon the
income of an annuitant is important, and acts prejudicially upon all with
limited means. To obviate this evil, if the fundholder declined receiving
his capital, the interest was reduced from 1750 to 1757 only one half
per cent., 3 being paid during that period ; after 1757 it was reduced
the remaining half per cent. The great resources of England have ever
been regarded with wonder by foreign nations ; and they looked with
astonishment on the power of a people which, after a heavy war and
an increased debt, enabled the state to repay its creditors or reduce its
interest.

The name of Sir John Barnard, the father of the city, its honest rep-
resentative for six sessions, the remodeller of the Stock Exchange, and
the reducer of the interest on the national debt, occupies a prominent
place in all questions connected with the funds. Born of the same per-
suasion as William Penn, he retained during life much of the simple
honesty of the creed he originally professed ; and even Sir Robert Wal-
pole respected him, although he was constant in his opposition to bad
measures, and could never be bought nor bribed. " I address myself to
you, Mr. Speaker, and not to your chair," he said, when Sir .Robert Wal-
pole, secure in a majority, withdrew the attention of the Speaker ; " I
will be heard ; and I call that gentleman to order." Lord Chatham gave
him, half in jest and half in earnest, the proud title which was afterwards
appropriated to himself, of " the great Commoner." His pride was in-
domitable. The members of the Stock Exchange, who were always
spoken of with great contempt by Sir John, thoroughly detested him, and
greatly helped to fan the unpopularity which fell upon him when he
opposed public feeling, as, with a most unbending integrity, he inva-
riably did, if his conscience prompted. " He grew," said Horace Wal-
pole on one occasion, " almost as unpopular as Byng." On commercial
subjects his opinion was greatly regarded. When any remarkable fea-
ture in financial politics occurred, the town echoed with, " What does
Sir John say to this ? What is Sir John's opinion ? " And he had the
honor of refusing the post of Chancellor of the Exchequer in 1746. It
is somewhat at variance with the proud character of the man, that, from
the time his statue was erected in the Royal Exchange, he never entered
the building, but transacted his business in the front. The blood of Sir
John Barnard yet flows in the veins of some of the best houses in the
commercial world, his son having married the daughter of a gentleman
known in contemporary history as " the great banker, Sir Thomas
Hankey."

Origin of New Loans.

CHAPTER VI.

Origin of New Loans. Fraud of a Stock-broker. East India Stock.
Sketch of Sampson Gideon, the great Jew Broker. East India Company.
Restriction of its Dividends. Liberality to its Clerks. Important Decision.
Robbery at Jonathan's. Curious Calculation concerning the National Debt.

THE Spanish war, and the war of the Austrian succession, was the
origin of the next increase of the national debt. It was alleged that the
commerce and the merchants of Great Britain were injured by the Span-
iards ; that the subjects of England were sent to the Spanish mines ;
and though one remonstrance followed another to the court of Madrid,
promises were more plentiful than performances from the haughty Span-
iard. The people were excited to believe that their honor was insulted ;
a dramatic exhibition was made at the bar of the House of Commons ;
and this war, partly to please the populace, partly to heal the wounded
national pride, and partly to secure British subjects from the right of
search in American seas, was openly declared in 1739. The heralds
were attended in their progress by the chiefs of the opposition, and the
Prince of Wales drank success to England at Temple Bar ; but Sir Rob-
ert Walpole, as he heard the merry peal from the city steeples, muttered,
" They may ring their bells now, they will wring their hands before
long."

The misfortunes with which the campaign opened justified the minis-
ter's prophecy, and the war was violently attacked in the House ; but the
majority of Sir Robert was an irresistible argument, and calamity con-
tinued to mark the progress of the British arms. An armament, with
15,000 sailors, and as many soldiers, completely equipped, failed dis-
gracefully before Carthagena. The squadrons of our admirals were dis-
persed. Fontenoy witnessed a signal defeat, and Tournay was taken.
Scotland was entered by a Stuart, under circumstances which promised
success. England was threatened with invasion ; the vast armies of the
English allies, paid by English money, raised by loans through the Stock
Exchange, were inactive or defeated ; and it was only when a more
promising aspect was shed over our efforts, when the assistance of Russia
would have assured a supremacy, and British fleets had intercepted the
treasures of France and Spain, that the ministry, tired of a war which
brought so many reverses, and alarmed at the voice of public opinion,
consented to treat for peace.

But their treaty was as disgraceful as their war. The principal cause
of the latter, the right of search, was not even alluded to ; no equiv-
alent was received for forts restored to the enemy ; and, for the last
time in English history, the nobles of the land were given as pledges for
the country's faith. " The whole treaty," says one historian, " is a
lasting memorial of precipitate counsel and English disgrace." It is

Fraud of a Stock-broker.

melancholy to add, that this unhappy war added ,31,333,689 to the
permanent debt, took 15,080,000 in taxes, and, says a pamphleteer
of the day, " increased the contemptible crew of 'Change Alley."

The early mode of raising money was somewhat curious. When a
new tax was imposed by Parliament, any person might advance any sum
not less than 100. For this, a tally was given at the Exchequer, with
an order for repayment of the principal, and the payment of interest.
The sums thus advanced were to be paid off in regular order, as the
money arising from the tax was received. But as this was generally
found to be insufficient to redeem the loan, it became necessary either to
prolong the term, or raise a new loan to pay off the old one.

The interest on loans during the reigns of Anne and William was
very uncertain. In the reign of George II. a new principle was adopted.
Instead of varying it according to the state of the money-market, the rate
was generally fixed at 3 or 3J per cent., and the necessary variation
made in the sum funded. In consequence of this practice having pre-
vailed, the principal of the debt now existing amounts to nearly two fifths
more than the sum actually advanced.

As early as 1762, a stock-broker, named John Rice, met the fearful
penalty so liberally awarded to crime by the civil code of the eighteenth
century. A client of Rice, for whom he was accustomed to receive her
dividends, was, under false pretences, induced to grant a power to sell as
well as to receive the interest. As the temptation to speculate on the
Stock Exchange is great, the temptation to divert property from its
legitimate channel is equally so, when confidence or carelessness has
granted the power. The stock-broker sold all his client's money, em-
ployed it to meet his losses, and kept up his deception by sending her the
dividends as usual. The lady, moved by doubt, or by some cogent but
unknown cause, intimated to Rice her intention of visiting the city. Un-
able to restore the money, the conscience of Rice took the the alarm, and
he fled, leaving with his wife 5,000 of the misappropriated property.
Ignorant of his evil deeds, and anxious to join her husband, she em-
barked for Holland. The weather proved rough ; the vessel was driven
back ; and the persons sent in search of the husband apprehended the
wife, who yielded the money in her possession, leaving herself entirely
destitute ; and it is to the credit of the directors of the South-Sea Com-
pany, that they settled a small pension on the unhappy woman.

The search continued for Rice, who was discovered in the old town of
Cambray, where he had taken up his residence. The English ambassador
at Paris applied for his delivery ; the misguided man found that Cambray
was no city of refuge for him ; and the last sad penalty of the law was
enacted on the body of John Rice, the stock-broker.

In February, 1674, the jobbers were taken by surprise, and a sudden
fall of fourteen per cent, in India Stock occurred, owing to an unex-
pected war in the East. The incident is only remarkable, that from this
period, marked by a fall in their stock to so large an extent, commenced
the political greatness of the Company. A violent dispute had arisen be-
tween Lord Clive and the directors ; but their foreign affairs assumed so
serious an aspect, that the latter were forced to yield. Every vessel

Sampson Gideon.

brought alarming tidings. The natives, unable to bear the oppressive
exactions to which they were subject, arose and defied the government.
The directors of the Company grew alarmed. They forgot their feuds,
they remembered only their dividends, and called Clive to their rescue.
But Clive refused to act so long as one Sullivan, his bitter enemy, occu-
pied the position of chairman ; and as the proprietors would have remov-
ed the whole court of directors rather than miss the services of Clive,
Sullivan not only lost his chairmanship, but was within a single vote of
losing his seat as director. During this exciting period, so great was the
bustle, that Cornhill and Cheapside were filled with the carriages of the
voters ; and from this dispute, which commenced with so ominous a fall
in their stock, may the territorial dignity of the East India Company be
dated.

Sampson Gideon, the great Jew broker, as he was called in the city,
and the founder of the house of Eardley, as he is known to genealo-
gists, died in 1762. This name, as the financial friend of Sir Robert
Walpole, the oracle and leader of 'Change Alley, and the determined
opponent of Sir John Barnard, was as familiar to city circles in the last
century as the names of Goldsmid and Rothschild are to the present. A
shrewd, sarcastic man, possessing a rich vein of humor, the anecdotes
preserved of him are, unhappily, few and far between. " Never grant a
life-annuity to an old woman," he would say ; " they wither, but they nev-
er die." And if the proposed annuitant coughed with a violent asthmatic
cough on approaching the rdt>m-door, Gideon would call out, " Ay, ay,
you may cough, but it sha'n't save you six months' purchase ! "

In one of his dealings with Mr. Snow, the banker, immortalized by
Dean Swift, the latter lent Gideon 20,000. Shortly afterwards, the
" forty-five " broke out ; the success of the Pretender seemed certain ;
and Mr. Snow, alarmed for his beloved property, addressed a piteous
epistle to the Jew. A run upon his house, a stoppage, and a bankruptcy,
were the least the banker's imagination pictured ; and the whole con-
cluded with an earnest request for his money. Gideon went to the bank,
procured twenty notes, sent for a phial of hartshorn, rolled the phial in
the notes, and thus grotesquely Mr. Snow received the money he had lent.

The greatest hit Gideon ever made was when the 'rebel army ap-
proached London ; when the king was trembling ; when the prime min-
ister was undetermined, and stocks were sold at any price. Unhesitat-
ingly he went to Jonathan's, bought all in the market, advanced every
guinea he possessed, pledged his name and reputation for more, and held
as much as the remainder of the members held together. When the
Pretender retreated, and stocks rose, the Jew experienced the advantage
of his foresight.

Like Guy, and most men whose minds are absorbed in one engrossing
pursuit, Mr. Gideon was no great regarder of the outward man. In a
humorous essay of the period, the author makes his hero say, " Neither
he nor Mr. Sampson Gideon ever regarded dress." He educated his
children in the Christian faith, but said he was too old himself to change.
Being desirous to know the proficiency of his son in his new creed, he
asked, " Who made him ? " and the boy replied, " God." He then

Sir Robert Walpole's Sinking Fund.

asked, " Who redeemed him ? " to which the fitting response was given.
Not knowing what else to say, he stammered out, " Who who who
gave you that hat ? " when the boy, with parrot-like precision, replied in
the third person of the Trinity. The story was related with great unction
at the period.

" Gideon is dead," writes one of his contemporaries, in 1762, " worth
more than the whole land of Canaan. He has left the reversion of all his
milk and honey, after his son and daughter, and their children, to the Duke
of Devonshire, without insisting on the Duke taking his name, or being
circumcised." That he was a man of liberal views, may be gathered
from his annual donation to the Sons of the Clergy, from his legacy of
2,000 to the same charity, and of -1,000 to the London Hospital. He
died in the faith of his fathers, leaving 1,000 to the Jewish syna-
gogue, on condition of being interred in the bury ing-place of the chosen
people."

The question of the sinking fund has greatly occupied the attention of
financial men, and upon few schemes have so many and such various
opinions been given. To view the subject by the light of common
sense, it seems palpably absurd that more money than was necessary
should be borrowed for the sake of paying it again, or that, while a sur-
plus fund remained in the Exchequer, new loans should be raised. Paine
afterwards declared it was like a man with a wooden leg running after a
hare, the more he ran, the farther he was off.

The first sinking fund is usually called ^Sir Robert Walpole's, because
it was adopted by him ; but its author was the Earl of Stanhope. The
taxes, which had at first been for limited periods, being rendered per-
petual, proved greater than the charges they were meant to defray.
The surpluses, therefore, were united under the name of the Sinking
Fund, and appropriated for the discharge of the national debt.

The opinion which Dr. Price has since so strongly urged was very
prevalent ; and as much anxiety concerning the debt existed, it was con-
sidered important to apply this surplus invariably to the discharge of the
great debt, and to borrow by new loans when the public exigencies re-
quired it. Thus, although from 1718 to 1731 was a period of peace, the
following sums were borrowed :

1718 .... 505,995 1727 .... 1,750,000

1719 . . . 312,7.37 1728 . . . 1,230,000

1720 . . . . 500,000 1729 . . . . 550,000

1721 . . . 1,000,000 1730 . . . 1,200,000

1725 . . . . 500,000 1731 . . . . 500,000

1726 . . . 370,000

The money procured by the sinking fund for the discharge of the na-
tional debt, from 1716 to 1728, amounted to ,6,648,000, being a trifle
more than the debt contracted during the same period.

In 1728, it was found that the principle could not be preserved ; and
the interest of the loan of that and the following year was charged on
the fund, while the additional taxes imposed to pay the interest of the
loans were applied to increase it. A short time after, the plan of pre-

Operations of the Sinking Fund.

serving the sinking fund inviolate was abandoned ; and in i733, 500,000
was taken to meet the expenses of the year; in 1734, 1,200,000 was
taken for the same purpose ; and in 1735, it was even anticipated, and
the principle, in effect, abandoned. From that time its operations grew
feeble, its produce was often devoted to other purposes, and it was found
necessary to have recourse to it when the expenses exceeded the rev-
enue, and no new taxes were imposed. In the peace which followed the
treaty of Utrecht, a period of twenty-six years, 7,23 1,508 was
the amount of debt discharged by the sinking fund ; and in war the
produce was applied to the expenses of the year, loans being raised
for the additional sums required.

This fund produced at its commencement, in

1717 '.'.' . ! . '' 323,439

From 1717 to 1726, both inclusive 577,614

" 1727 " 1736 " .... 1,132,251

" 1737 " 1746 " . .,(., . *, ,. . 1,062,170

" 1747 " 1756 " /'-.' .' . 1,356,578

" 1757 " 1766 . ; ;' '"; . . 2,059,406

The further and feeble operations of this fund are unnecessary to trace,
as, although it continued nominally in the accounts of the Exchequer
until 1786, when Mr. Pitt's sinking fund was introduced, it did little in
peace, and nothing in war. From 1717 to 1772 it produced but twenty
millions, being about 357,000 annually.

If the increase to the debt last recorded was caused by a disgraceful
war and a powerless ministry, that which followed was no less remark-
able for the brilliancy of its operations and the greatness of its achieve-
ments. Since the treaty of Aix-la-Chapelle, the English and French
East India Companies had been fighting for supremacy, and the animosity
spread to the colonies. A British force was cut off in America, and some
French vessels were taken on the West India seas. War seemed neces-
sary, and, when commenced, proved at first sufficiently humiliating.
Hanover was attacked by France, and petty German princes were sub-
sidized to defend it. Minorca, commanded by Blakeney, a superannuated
general, was taken by Richelieu, a superannuated fop. Braddock was
defeated in America ; Admiral Byng refused to engage the French fleet ;
and an outcry arose for his life, which appalled the men who governed
the councils of the country. Shops were filled with libels ; walls were
covered with satires. The English people, rarely yielding to the thirst
for blood, demanded that of the unpopular admiral ; and the prime min-
ister trembled for his neck. Our navy could scarcely keep the sea, and
the army was commanded by men desirous only of seeking emolument
and avoiding risk. Enterprise and energy were absent. In the West,
our power was paralyzed ; in the East it was endangered. From every
county in the kingdom, from every town in the empire, vengeance was
demanded. The Duke of Newcastle vacated the place of prime minister ;
a change was effected ; and from that period a succession of conquests
filled the kingdom with pride, and raised the fame of the country. The
accession of Mr. Pitt to the post of prime minister was felt in every de-
partment. France, attacked on some, and menaced on all points, suf-

Mr. Pitt's Administration.

fered disastrous defeats, retired from Germany, and saw her West and
East Indian colonies wrested from her. In one action, thirty-six sail of
the line, fifty frigates, and forty-five sloops were taken or destroyed, and
the sea swept clear of the fleets that had insulted our coasts and our
colonies. Triumph after triumph, conquest after conquest, and, it must
be added, loan after loan, were witnessed. Goree and Guadaloupe were
taken. The Heights of Abraham beheld the fall of Wolfe and of Que-
bec ; Montreal was subdued ; and the total cession of Canada followed.
The fleet to which the French court had confided its American posses-
sions was destroyed, and captured standards were borne through the streets
amidst triumphant shouts, which deadened the roar of the cannon.

The accession of George III. did not interfere with the conduct of the
war. Nineteen millions were voted the first year of his reign ; and
though Mr. Pitt retired from the councils of his Majesty, the contest was
carried on with the same energy ; while the system of subsidies was con-
tinued with a profusion which has been rarely paralleled. Triumphs
such as these produced their effects on the opponents of England. Spain
and Portugal were anxious for peace ; France was impoverished, the
plate of her monarch converted into money ; and, in 1762, a just and
honorable peace was. concluded.

It is remarkable, also, that public distress was never less apparent than
during this war ; and the rare picture was presented of a people support-
ing without murmurs the trials and the taxes of a wide and costly con-
test. Prosperity and wealth at home hid the price at which the victories
were purchased abroad. London was never more thriving ; and the im-
portance of several manufacturing districts dates from the, success of the
seven years' war. During this period, the whole continent of America
fell into our power. Twenty-five islands were captured ; twelve great
battles won ; nine fortified cities, and forty forts and castles, taken. One
hundred ships of war and twelve millions of specie acquired ; sixty mil-
lions added to the national debt, and fifty-two millions raised by taxes.

To produce the peace which followed this contest, bribery was resorted
to, and the public money wasted. " The peace of 1763," said John
Ross Mackay, private secretary "to the Earl of Bute, and afterwards Treas-
urer to the Ordnance, " was carried through and approved by a phcu-
niary distribution. Nothing else could have surmounted the difficulty. 1
was myself the channel through which the money passed. With my
own hand I secured above one hundred and twenty votes on that vital
question. Eighty thousand pounds were set apart for the purpose. Forty
members of the House of Commons received from me a thousand pounds
each. To eighty others I paid five hundred pounds apiece."

The continued corruptions produced continued irregularity. George
II. said he was the only master who did not see his servants remunerated ;
adding, to Mr. Pelham, that if the civil list were not paid, he would find
another minister. Remonstrances on the injury to the national and in-
dividual interest were so frequent, that the king declared he would in-
spect the accounts himself.

The Duke of Newcastle, then prime minister, bowed, and promised to
send the papers ; and the following morning, a cart loaded with official

Secret- Service Money.

accounts was paraded in the court-yard of the palace. With much vio-
lence, the monarch demanded the cause of the display. " They form a
portion of the accounts your Majesty desired to inspect," was the reply ;
" there is another wagon-full on the road."

One specimen of the accounts his Majesty had offered to investigate
was, however, quite sufficient ; and the public complaint remained un-
alleviated.

In 1742, ,1,384,000 6s. 3d. was under the sole direction of the Earl
of Orford for secret-service money, of which 50,077 18s. went to the
newspapers ; and the amount of this supply expended in the six weeks
preceding the resignation of the Earl of Orford was more than during
the three previous years.

In 1766, the House of Commons compelled the East India Company
to rescind a vote which the excitement of the time had induced them to
pass. The success of Lord Qlive, the important commercial consequen-
ces to which it led, and the plunder which rewarded the victories of the
soldier, had fired the brains of the East India proprietary. The most
extravagant reports were promulgated, and half-yearly dividends of fifty
per cent, were confidently promised. The value of the stock rose enor-
mously ; and the directors divided at the rate of thirteen per cent, per
annum. When it was found that the corporation were enabled to divide
thus liberally, Parliament, under the pretence that it might lead to a dan-
gerous panic, interposed with a strong hand, directed that the annual div-
idend of the Company should be limited to ten per cent., and that all
accumulations beyond should accrue to the state. Great opposition was
evinced. The corporation, having paid liberally for their charter, would
not quietly submit to an interference which so materially decreased its
value ; and, having formerly bribed with success, tried the same process,
but without the same result. The changes in the opinion of the " inde-
pendent " members, as they were bribed by the Company or awed by the
minister, were somewhat curious ; and the cause of Charles Townshend's
tergiversations was probably only a type of many. Having dealt largely
in India Stock, he cried up the Company's claims to serve himself. He
then sold out at a profit, and cried them down to serve his friends. It
was a complete South-Sea year.- A third of the House of Commons
was deeply engaged in the traffic ; and jobbing was the thermometer by
which patriots were made or marred. " From the Alley to the House>"
said Walpole, " is like a path of ants." Most of the members were in
Mr. Townshend's position, and the East India Company were, therefore,
restricted in their dividends. The result was, that this corporation is
worthy the study of others in the liberality with which it rewards the
labors of its clerks. Acting on the fine Mosaic principle, that the ox
shall not be muzzled which treadeth out the corn, the Company have
made their servants' interests their own ; they have made them under-
stand that their old age shall be liberally protected if they faithfully
serve ; they have made them know that their widows and orphans shall
not be forsaken; and they have, therefore, made them feel that the ser-
vice of such a company is a pleasure, and not a pain ; a love, and not at
labor.

4 37

Liberality to Clerks.

It is the curse of English commerce, of English banking, and of
English trading generally, that, while large fortunes are made by the
principals, the clerks are often remunerated at a rate inferior to that which
the merchant pays his favorite domestic. The small number necessary
to produce a great income takes away all excuse for this penury ; and as
four or five are frequently sufficient to produce annual thousands, it is to
be regretted that, while the principal seeks the most luxurious abode
which wealth can produce, the clerk goes to some cheap suburban home,
in which, with his family, he can scarcely unite respectability with life.

In corporations and in public offices this is peculiarly hard. The addi-
tional salary would not be felt, and there is a responsibility on the clerks
which demands that their payment should be proportioned to it. It is an
honor to them that, with the lax notions entertained of corporate and na-
tional property, the frauds should be so rare ; but it is a dishonor to com-
mercial nature, that, considering the profits made by merchants, the daily
intercourse they hold with their clerks, and the trust they are compelled
to place in them, they pay in so small, and work in so great a degree.
It is a most suggestive fact, that, where the functionaries are remunerated
the worst, the frauds are most numerous.

But there is another evil felt by the stipendiary. His personal treatment
is not in accordance with his claims as an educated man. The coldest
look and the haughtiest answer are reserved for him. The smallest
amount of intercourse necessary to business is awarded him. The com-
mon courtesies of life are denied him. The merchant too often enters
his counting-house without recognition, and leaves it without an adieu.

In similar establishments abroad, the clerks are treated with care and
kindness. They are not made hourly to feel (he great gulf between
them and their wealthy superiors. They visit the homes of the latter ;
they are confidentially consulted ; they are allowed time to think ; they
are treated as men, not as animals. And thus it was in England in the
olden time. The merchant of that school invited his clerk to his home,
took an interest in his affairs, and recognized him as a friend. They
worked the fortunes of the house together, and, if the merchant was re-
paid by his clerk's fidelity, the latter was often admitted into the firm he
had served. This is not so now. But the master is the greatest loser ;
for there is no service so fruitful as that which arises from kindness, or so
grateful as that which has its root in affectionate respect.

An important point was decided against the presumed privilege of the
city in 1767. Two gentlemen, wishing to purchase stock, employed
friends, not brokers, to procure it. The chamberlain, deeming this an
invasion of the civic prerogatives, commenced proceedings against them.
In both cases, however, the defendants gained the day. " And," says
the authority, " it is now settled that every person is at liberty to employ
his friends to buy or sell government securities without employing a
broker."

Some of the frequenters of Jonathan's were dexterous manipulators,
and, however the speculator might congratulate himself on his success in
the Alley, it occasionally happened that he found himself lightened of
his profit. Thus, in one day in the above year, no fewer than four

Crisis of 1772.

brokers were robbed of their pocketbooks, containing large amounts of
property. The thief was taken ; but, in place of expressing contrition,
he gave a voluntary and unexpected opinion, that one man had as much
right to rob as another, and that he was only acting as an honorary
magistrate, in taking that of which they had cheated their neighbours.

In 1771, a somewhat curious calculation was made, that if the debt of
130 millions were counted in shillings at the rate of 100 a minute, it
would occupy one person 49 years, 158 days, and 7 hours. The same
person also declared its weight in the same coin to be 41,935,484 troy
pounds ; and that it would require 279,570 men to carry it.

CHAPTER VII.

Crisis of 1772. Indian Adventurers, their Ostentation, their Character.
Failure of Douglas, Heron, <5f Co. -Neale, Fordyce, <$ Co. Sketch of Mr.
Fordyce. His Success in the Alley. Alarm of his Partners. His Ar-
tifice. His Failure. General Bankruptcy. Liberality of a Nabob.
Reply of a Quaker. Witticism of John Wilkes. War of American Inde-
pendence. Artifices of Ministers. Anecdote of Mr. Atkinson. Value of
Life on the Stock Exchange. Longevity of a Stock-broker.

THE crisis of 1772 has been entirely overlooked by those who have
bestowed their thoughts upon such subjects. It had its origin in a variety
of circumstances ; but the exciting cause was the failure of the bank of
Douglas, Heron; & Co., established in 1769. It was the period when
the success of adventurers in our Indian empire had contributed to the
wealth of England. Immense sums were accumulated in a few months.
Large purchases of land were made at high prices. All the early and
late symptoms of speculation were apparent. The vast fortunes brought
home were ostentatiously displayed. A contempt for the slow gains of
trade, a feverish excitement, and an ungovernable impatience to be rich,
marked the period. The nabobs were not disposed to hide their wealth
under a bushel. They built magnificent mansions, and mistook ostenta-
tion for taste. They raised the prices of all articles of consumption ;
they were bowed to before their faces, and dreaded behind their backs.
Dark deeds were told of them ; and the shrewd peasantry shuddered
as the massive carriage rolled by, which held the man whose wealth had
been obtained at the expense of his humanity. The ephemeral litera-
ture of the day is filled with the popular opinion of the character ; and
the nabob is commonly represented as a man with a bad liver and
black heart. Scott, with his exquisite conception of the ludicrous, makes
one of his characters define a nabob as " one who comes frae foreign
parts, with mair siller than his pouches can hold : as yellow as oranges,
and maun hae a' thing his ain gate."

Failure of Douglas, Heron, fy Co.

For thirty years the public was filled with impressions of their wealth
and crimes ; and so late as twenty years ago, Lord Clive was described
to the writer as keeping memorials of his guilt in a box beneath his
bed, and as having destroyed himself because his past enormities were
too great for his conscience to bear. The drama, the story, and the
poem, were colored with their eccentricities ; while newspapers occa-
sionally recorded facts which marked that, in some at least, a fine gen-
erosity was mixed with their grossness.

The effect, however, of these things was to make money plentiful ; to
raise a spirit of emulation, and a thirst for gold. In addition to this, the
banking-house of Douglas, Heron, & Co. circulated its paper with a
freedom which had an effect upon the population of Scotland remembered
to the present day. Discounts for a time were plentiful. Bills presented
by farmers, and accepted by ploughmen, were readily cashed. As is
usual in these cases, the dashing character attained by the bank attracted
those who should have known better ; and many, who boasted of their
foresight, paid for their presumption.

In 1771, the result of reckless trading was apparent; and Douglas,
Heron, & Co. failed. The shock was felt throughout the empire. The
Royal Bank of Scotland tottered to its base ; the banking-houses of
England shook with a well-grounded fear ; and the great corporation of
the Bank of England was beset on all sides for assistance, but from none
more vehemently than from Mr. Fordyce, of the house of Neale, For-
dyce, & Co., a firm which, from its position, the importance assumed
by its partners, and the known success of some of its speculations, was
generally supposed to be beyond suspicion. The career of the man who
thus craved assistance was somewhat out of the ordinary way of his
craft, and may, perhaps, prove interesting, as the sketch of an adventurer
in whose power it lay to make or mar the fortunes intrusted to him ; and
also as a specimen of the mode in which the Stock Exchange is some-
times resorted to by bankers with the balances of their customers.

Bred a hosier at Aberdeen, Alexander Fordyce found the North too
confined for any extensive operations, and, repairing to London as the
only place worthy his genius, obtained employment as clerk to a city
banking-house. Here he displayed great facility for figures, with great
attention to business, and rose to the post of junior partner in the firm of
Roffey, Neale, & James. Scarcely was he thus established, ere he began
to speculate in the Alley, and generally with marked good fortune.

" The DeviHempts young sinners with success ";

and Mr. Fordyce, thinking his luck would be perpetual, ventured for sums
which involved his own character and his partners' fortune. The game
was with him ; the funds were constantly on the rise ; and, fortunate as
daring, he was enabled to purchase a large estate, to support a grand ap-
pearance, to surpass nabobs in extravagance, and parvenus in folly. He
marked the " marble with his name " upon a church which he ostenta-
tiously built. His ambition vied with his extravagance, and his extrav-
agance kept pace with his ambition. The Aberdeen hosier spent thou-
sands in attempting to become a senator, and openly avowed his hope of

Fraud of Mr. Fordyce.

dying a peer. He married a woman of title ; made a fine settlement on
her Ladyship ; purchased estates in Scotland at a fancy value ; built a
hospital ; and founded charities in the place of which he hoped to become
the representative. But a change came over his fortunes. Some polit-
ical events first shook him. A sensible blow was given to his career by
the affair of Falkland Island ; * and he had recourse to his partners' pri-
vate funds to supply his deficiencies. Like many, who are tempted to
appropriate the property of others, he trusted to replace it by some lucky
stroke of good fortune, and redoubled his speculations on the Stock Ex-
change. Reports reached his partners, who grew alarmed. They had
witnessed and partaken of his good fortune, and they had rejoiced in the
far ken which had obtained the services of so clever a person ; but when
they saw that the chances were going against him, they remonstrated
with all the energy of men whose fortunes hang on the success of their
remonstrances. A cool and insolent contempt for their opinion, coupled
with the remark, that he was quite disposed to leave them to manage a
concern to which they were utterly incompetent, startled them ; and when,
with a cunning which provided for every thing, an enormous amount of
bank-notes, which Fordyce had borrowed for the purpose, was shown
them, their faith in his genius returned with the possession of the magic
paper ; and it is doubtful whether the plausibility of his manner or the
rustle of the notes decided them.

But ill-fortune continued to pursue Mr. Fordyce. His combinations
were as fine, his plans as skilful, as ever. His mind was as perceptive
as when he first began ; but unexpected facts upset his theories, and the
price of the funds would not yield to his combinations. Every one said
he deserved to win ; but he still continued to lose. Speculation succeeded
speculation ; and it is remarkable, that, with all his great and continued
losses, he retained to the last hour a cool and calm self-possession. After
availing himself of every possible resource, his partners were surprised
by his absenting himself from the banking-house. This, with other
causes, occasioned an immediate stoppage, and a bankruptcy which
spread far and wide. But Mr. Fordyce was not absent long. He re-
turned at the risk of his life ; the public feeling being so violent that it was
necessary to guard him from the populace while he detailed a tissue of
unsurpassed fraud and folly. He manfully took the blame upon himself,
and exonerated his partners from all, save an undeserved confidence.

It need hardly be added, that the assistance earnestly begged by Mr.
Fordyce of the Bank of England was refused. Whatever impression
might be entertained by others of his house, the corporation to which he
applied was equally aware of his speculative propensities, as of the sphere
in which he indulged them ; and they refused assistance, upon a well-
founded principle, to the man who employed his customers' capital and
his own energies in incessant speculations on the Stock Exchange. For-
dyce, however, only advanced the crash. The Scotch bankers were the
cause ; and the Bank of England saw the necessity of stopping the dan-

* " The stocks have got wind of this secret," said Horace Walpole, " and their
heart is fallen into their breeches, where the heart of the stocks is apt to lie.''
4* 41

Hebrew Brokers in 1774.

gerous game commenced by the Bank of Ayr. The failures continued
in the commercial world. He broke half the people in town. Glyn and
Halifax were gazetted as bankrupts ; * Drummonds were only saved by
General Smith, a nabob, the original of Foot's Sir Matthew Mite,
supporting their house with 150,000. Two gentlemen, ruined by the
extravagance of the city banker, shot themselves. Throughout London
the panic, equal to any thing of a later date, but of shorter duration, spread
with the velocity of wild-fire, and part of the press attributed to the Bank
the merit of supporting the credit of the city, while part assert that it
caused the panic. The first families were in tears ; nor is the consterna-
tion surprising, when it is known that bills to the amount of four millions
were in circulation, with the name of Fordyce attached to them.

The attempts of the speculating banker to procure assistance were
earnest and incessant. Among those to whom Mr. Fordyce went was a
shrewd Quaker. " Friend Fordyce," was the reply of the latter, " I have
known many men ruined by two dice, but I will not be ruined by Four-
dice."

In 1774, the number of Hebrew brokers was limited to twelve ; and
the privilege was always purchased by a liberal gratuity to the Lord
Mayor. During this year, the mayoralty of Wilks, one of the privileged
being at the point of death, Wilks, with characteristic boldness, openly
calculated on the advantage to be attained, and was very particular in his
inquiries after the sick man. The rumor, that Wilks had openly ex-
pressed a wish for the death of the Hebrew, was spread by the wags of
'Change Alley, and the son of the broker sought his Lordship to reproach
him with his cupidity. " My dear fellow," replied Wilks, with the readi-
ness peculiar to him, " you are greatly in error. I would sooner have
seen all the Jew brokers dead than your father."

" It is the nature of colonies, as of children, at a certain period in their
history, to cease to be dependent upon their parents. By judicious coun-
sel and control they may be retained, but they must eventually separate ;
and, with the one as with the other, the future influence of the parent de-
pends upon that parent's behaviour during the nonage of the child."
Such was the opinion of William Pitt, first Earl of Chatham ; and it is to
be lamented that the behaviour of England to her American children was
not likely to be remembered with kindness, when the tie was violently
broken. The story of that disastrous war, when men of the same ances-
try and the same habits were arrayed in hostility, when they who spake
the same tongue spake it only in unkindness, is pitiable and humiliating.
From the time when the inhabitants of Boston refused to be taxed, to the
signing of the treaty with the young republic on terms of equality, the
measures adopted were as severe as they were injudicious ; and to the
obstinacy of George III. may be traced the cause and the continuation of

* Sir Thomas Halifax had not a high reputation for liberality. During a severe
winter, when requested to join his neighbours in a subscription for the poor, and told
that " he who giveth to the poor lendeth to the Lord," he replied, " He did not lend
on such slight security " ; and it is curious, that, when he afterwards applied to a rich
neighbour for assistance, a similar reply, couched in similar language, was given to
his application.

Tea in Boston Harbor.

the contest, and the increase of the national debt. The first blow was
struck at Boston. On the evening of December 16th, 1773, a number
of citizens, disguised as Mohawk Indians, boarded the vessels containing
the tea which they would not allow to be taxed, and discharged it into
the water, while other cargoes were not only refused a landing, but were
sent back with contempt.

When the news reached London, various restraining measures were
passed. The place which had witnessed the outrage was declared closed
for all exports and imports ; and though the bold stand of the provincials
astonished the mother country, it was supposed to be but temporary. It
was soon found, however, that Boston was not alone ; other provinces
joined ; and British America called a general congress. Magazines were
formed ; ammunition was provided ; plans were drawn up for the defence
of the country ; and a large body enrolled, termed minute-men, engaged
to turn out at a minute's notice. Every contingency was prepared for ;
and an aspect called rebellious by the mother country was boldly pre-
sented. The first blood was shed at Lexington, where British soldiers
fled before American militia. Emboldened by success, they reduced two
forts, took Montreal, and attempted Quebec. Nor was England idle in
the struggle. An addition to the land and sea force was voted ; loans
were raised ; reinforcements were ordered to Boston ; and the military
ardor which had seized the Americans found fuel on which to expend
itself.

With fire-arms formed by themselves ; with weapons wrought from the
plough ; with artillery so clumsily fashioned that it burst more often than
it discharged ; with men who had only the determination to die free
rather than live bond, the American generals beat the veteran troops
of England. Her forts were taken, her forces surrounded, her armies
destroyed, and her officers made prisoners. The principal powers of
Europe looked with delight upon a struggle between the soldiers of the
mother country and the raw recruits of the colony ; between discipline
on the one side and patriotism on the other ; on the entire power of Eng-
land baffled by men from the pen and from the plough, from the shop
and from the counting-house. The loans of this disastrous period were
most unpopular. The increased taxation which followed was drawn with
the utmost difficulty from the pockets of the people.

Political misfortunes and military disasters made the subjugation of
America chimerical. Earl Cornwallis surrendered himself and his army
as prisoners of war ; and when the contest was extended to Europe,
when England stood alone against Holland, France, Spain, and America,
when our navy was defeated, when the English coast and harbors
were insulted, our West India Islands ravaged, and our trade swept
away, the discontents of the country increased, and the debates in the
House grew violent and acrimonious. " You sheathe your sword, not in
its scabbard, but in the bowels of your countrymen," said one ; and on
some unhappy boast of driving the Americans into the sea, "I might
as well," said Lord Chatham, " think of driving them with my crutch."
The people grumbled at defeat following defeat, at trade crippled, at
taxes augmented, and debts enlarged.

New Loans in 1778.

Loan succeeded loan; a cry arose about the corruption of contracts ;
and the feeling of discontent increased so strongly, that the stubborn
obstinacy of the king, who said he would sooner lose his right arm than
his colonies, was compelled to yield to a unanimous resolution of the
Commons, that the House would consider as enemies all those who ad-
vised the continuance of the war. Had any other monarch sat upon
the throne, the large accumulation of debt would, probably, have been
avoided ; and England would now be spared the painful task of looking
back upon " a nation convulsed by faction ; a throne assailed by the
fiercest invective ; a House of Commons hated and despised ; a rival
legislature sitting beyond the Atlantic ; English blood shed by English
bayonets ; our armies capitulating ; our conquests wrested from us ; our
enemies hastening to take vengeance upon us for past humiliations ; and
our flag scarcely able to maintain itself in our own seas."

Such was the aspect of public affairs during a war which cost thirty-
two millions in taxes, and added one hundred and four millions to the
national debt.

In 1778, when a loan was proposed, the usual number of applications
was delivered from the bankers, merchants, and members of the Stock
Exchange. To their surprise the answers were not received so soon as
usual ; and, as political events were threatening, the applicants grew
anxious. The funds fell greatly ; and, when the replies came, it was
found that the whole of this unfortunate loan was fixed upon them. Had
the funds risen, the members and the minister's friends would have had a
good portion ; but, as the scrip was sure to be at a discount of three per
cent., the whole was divided among those who were either without interest
or were opposed to the government. In 1781, on a new loan being pro-
posed, the same houses applied ; but as the scrip went to a premium, it
was divided with due regard to senatorial interests ; and many who had
ost on the last loan had no opportunity of retrieving on the present.

Prior to the allotment, one firm was waited on by a stranger, and told,
ihat, if they would add his name to their list, they would be favorably
considered. The house declined the proposal, and sent in a tender for
two millions ; when, to their surprise, they received, with an allotment of
,560,000, an intimation that the odd .60,000 was for the gentleman
who had waited on them, and of whom they knew nothing.

.240,000 was nominally given to another house ; but of this .200,000
was for members whose votes were desirable. Mr. Dent, the head of the
house of Child, and a senator, received 500,000, being two thirds of
his tender ; while Drummonds and other bankers, not members, received
only tenths and sixteenths of the sums they requested. Some applicants,
without Parliamentary interest, though as good as any in the city, were
totally neglected, while " to a number of mendicants," said Mr. Fox,
" obscure persons, and nominal people, were given large amounts."

The mendicants and obscure people, thus politely alluded to by the
great gambler, were the Treasury and Bank clerks, to whom a portion of
the loan was usually presented as a compliment for their services.

It is curious to notice the increase of applications for the loans so con-
stantly required. Thus, in 1778 only 240 persons applied ; in 1779 the

The First Lottery.

number increased to 600; in 1780, to 1,100; and in 1781 it reached
1,600.

In 1785, Mr. Atkinson, said to be an adventurer from the North, was a
great speculator. That he acted with judgment may be gathered from
the fact of his dying possessed of half a million. A curious, but not a
parsimonious man, he occasionally performed eccentric actions. During
one of the pauses in a dinner conversation, he suddenly turned to a lady
by whom he sat, and said, " If you, madam, will trust me with 1,000
for three years, I will employ it advantageously." The character of the
speaker was known ; the offer so frankly made was as frankly accepted ;
and in three years, to the very day, Mr. Atkinson waited on the lady with
10,000, to which amount the sagacity of the citizen had increased the
sum intrusted to him.

It is probable, although the fact is difficult of attainment, that the lives
of the members of the Stock Exchange are, at the present day, less
valuable than the ordinary average of human life. The constant thought,
the change from hope to fear, the nights broken by expresses, the days
excited by changes, must necessarily produce an unfavorable effect upon
the frame. Instances, however, of great longevity are not wanting ; and
one John Riva, who, after an active life in 'Change Alley, had retired to
Venice, died there at the patriarchal age of one hundred and eighteen.

CHAPTER VIII.

Invention of Lotteries. The First Lottery. Employed by the State. Great
Increase. Eagerness to subscribe. Evils of Lotteries. Suicide, through
them. Superstition. Insurances. Spread of Gambling. Promises of
Lotteries. Humorous Episodes. Legal Interference. Parliamentary Re-
port. Lottery Drawing. Picture of Morocco Men. Their Great Evil.
Lottery Puffing. Epitaph on a Chancellor. Abolition of Lotteries.

THE history of lotteries is one of those anomalies which it is the duty
rather than the pleasure of the annalist to record. A minute picture,
however, of the progress of these institutions, is as necessary to the
financial annals of the Stock Exchange as it is to the development of the
social history of a people. Invented by the Romans to enliven their fes-
tivities, they were to that luxurious people a new excitement ; and the
prizes distributed to their guests were in proportion to the grandeur of the
giver. Fine estates, magnificent vases, and beautiful slaves, with other
and less expensive prizes, gratified at once the pride of the founder and
the cupidity of the guest.

The application, however, of lotteries to the service of a state origi-
nated at Genoa, the government of which established the principle for
its own benefit. The Church was not long in following the example
at Rome, where the inhabitants deprived themselves of necessaries to

State Lotteries.

share the chances which their excited imaginations magnified a hundred-
fold.

The first on record in England was drawn in 1569. The harbors
and havens of the whole line of coast were out of repair, and the only
mode of procuring money was by lottery. The prizes were partly in
money and partly in silver plate, and the profits to be applied to the above
purpose. But the drawing was a very important task ; and, as 400,000
lots were to be drawn, night and day for nearly four months were the
people kept in a state of excitement. The time occupied must have been
somewhat tedious ; and, as this was the first lottery, and there were but
three offices in London, it is to be supposed that the drawing of that
period bore the same proportion to the drawing at a later time, that the
coaches then bore to the railroads now. In 1612, another lottery was
allowed for the benefit of the Virginia colonies, in which a tailor gained
the largest prize of 4,000 crowns. But thus early was it found that lot-
teries and demoralization went hand in hand. Sanctioned by the state
as a source of gain, they were found equally profitable to private indi-
viduals ; and the town teemed with schemes which brought wretchedness
and ruin in their train. In March, 1620, however, they were suspended
by an Order in Council ; but it was only a suspension, and the evil was
once more revived by Charles I., who, to assist a project of conveying
water to London, granted a lottery towards its expenses. That which
the first Charles allowed for so great a purpose, the second of the name
allowed as a boon to those whom he could reward in no other way. It
was in vain for censors to preach, divines to sermonize, or the House of
Commons to legislate. While there was the chance of a great gain for a
small risk, men ran in crowds to subscribe. Those who could not pay a
large sum found plenty of opportunities to gamble for a small amount,
and penny lotteries became common.* In 1694 they were again em-
ployed by the state, William III. having appealed to the propensities of the
people, and raised one million by the sale of lottery-tickets, the prizes of
which were funded at four per cent, for sixteen years. The voice of the
moralist continued to be raised ; and the public papers show, that, directly
the state sanctioned the nuisance, the evil increased tenfold, and that
schemes were introduced which were a loss to all save the promoters.
" What a run of lotteries we have had ! " says one. " With what haste
they all put in their money ! What golden promises they made ! "

The anecdotes connected with these abominations, the grim, grotesque
despair of the losers, and the eager delight of the gainers, was for the
time the great entertainment of the town. Men ran with eager haste
after the lotteries of merchandise ; and " the people were tickled," says
a pamphleteer, " with the proposals of prodigious profits, when the pro-

* Mr. J. B. Heath says of the early lotteries, in his valuable volume entitled " Some
Account of the Grocers' Company, " There is not one entry in the accounts to
show that the prizes were ever paid," and quotes various documents to prove that
they were very difficult to procure. " The science of puffing," adds this gentleman,
" which in our times has attained such perfection, was unknown at that period, and in
lieu of placards and advertisements, the more direct mode was adopted of personal
solicitation."

Lottery Gambling.

posers intended it only for themselves." The writer concludes somewhat
vehemently : " Indeed, the people have been so damnably cheated,
they have no need of dissuading, and their own sufferings are sufficient
to convince them it is their interest to forbear."

The system of lotteries sanctioned and employed by the legislature
was a terrible temptation to human nature. The chance, however re-
mote, of gaining a large sum by a small risk, with the feeling of anxious
and not unpleasing excitement, rendered lotteries a favorite phase of
English gambling ; for the voice of the people had not spoken so per-
emptorily the great truth, that the state must not purchase a nation's
wealth at the price of a nation's morals. That which a government em-
ploys as an instrument of wealth, is sure to be followed by the people to
a lower extent, but in a more mischievous manner. In 1772, lottery
magazine proprietors, lottery tailors, lottery stay-makers, lottery glovers,
lottery hat-makers, lottery tea merchants, lottery snuff-and-tobacco mer-
chants, lottery barbers, where a man, for being shaved and paying
threepence, stood a chance of receiving 10, lottery shoe-blacks,
lottery eating-houses, where, for sixpence, a plate of meat and the
chance of sixty guineas was given, lottery oyster-stalls, where three-
pence gave a supply of oysters and a remote chance of five guineas,
were plentiful ; and, to complete a catalogue which speaks volumes, at a
sausage-stall in a narrow alley was the important intimation written up,
that for one farthing's worth of sausages, the fortunate purchaser might
realize a capital of five shillings. Quack doctors a class which formed
so peculiar a feature in village life of old sold medicine at a high price,
giving those who purchased it tickets in a lottery purporting to contain
silver and other valuable prizes.

The eagerness of the populace grew with the opportunity. The news-
papers teemed with proposals ; and the rage for gambling reigned uncon-
trolled. Every ravenous adventurer who could collect a few articles
advertised a lottery. Shopkeepers, compelled by the decrease of busi-
ness, took the hint, and disposed of their goods in lottery. Ordinary
business among the lower tradesmen was greatly suspended. Purchasers
refused to give the full price for that which might be obtained for nothing.
Large profits were procured upon worthless articles ; and in 1709, so
great was the eagerness to subscribe to a state lottery, that Mercers' Hall
was literally crowded with customers, and the clerks were insufficient to
record the influx of names. It was, however, from those which were
termed " little goes," which drew the last penny from the pockets of
the poor man, which saw the father gambling and the daughter starv-
ing, the mother purchasing tickets and the child crying for bread, that
most evil arose. The magistracy, not always the first to interfere, grew
alarmed, and announced their determination to put in practice the penal-
ties which, if earlier enforced, would have been beneficial, but, unhap-
pily, were incompetent to put down that which they might easily have
prevented. It was found, also, impossible to restrain in private adven-
turers the wrong that the state sanctioned in public.

It was known that lotteries were injurious to morals and to manners ;
it was known that crime followed in their wake ; it was known that mis-

Lottery Suicides.

ery and misfortune were their attendants ; but the knowledge was vain,
and remonstrance useless, under the plea of the necessities of the state.

Lotteries continued to be employed by ministers as an engine to draw
money from the pockets of the people, at a price alike disgraceful to the
government and demoralizing to all. The extent to which the evil had
reached may be inferred from the fact, that money was lent on these as
on any other marketable security ; that, in 1751, upwards of 30,000
tickets were pawned to the metropolitan bankers ; and this, when, to have
an even chance for any prize, a purchaser must have held seven tickets ;
and it was ninety-nine to one that, even if a prize were drawn, it did not
exceed 50.

Suicide through lotteries became common. The streets swarmed with
unhappy wretches, who, while they suffered for the past, were making
imaginary combinations for the future. All arts were resorted to. Lucky
numbers were foretold by cunning women, who, when their art failed,
shrouded themselves in their mysticism ; and if fortune favored them,
paraded their prophecies to the public.

The most gross and revolting superstition was practised to discover
lucky numbers. Rites which surpassed the darkest imagination of a
Maturin, and ceremonies which' appear like relics of the elder world,
were resorted to for the same purpose.

It was in vain that the smaller lotteries were put down ; they only gave
way to an evil which preyed upon the very vitals of English society.
Insurance, an art upon which hundreds grew rich, while hundreds of
thousands grew poor, was commenced with terrible success. Those
who were unable to buy tickets, paid a certain sum to receive a certain
amount if a particular number came up a prize. A plan like this was
available for all, as the amount could be varied to the means of the insurer.

It is almost impossible to describe the many iniquities, the household
desolation, the public fraud, and the private mischief, which resulted from
insuring. Wives committed domestic treachery ; sons and daughters ran
through their portions ; merchants risked the gains of honorable trade.
" My whole house," wrote one, " was infected with the lottery mania,
from the head of it down to my kitchen-maid and post-boy, who have
both pawned some of their rags that they might put themselves in for-
tune's way." The passions and prejudices of the sex were appealed to.
Lovers were to strew their paths with roses ; husbands were plentifully
promised, and beautiful children were to adorn their homes through the
lottery. And all these glories were promised when Adam Smith de-
clared, as an incontrovertible fact, that the world never had, and never
would, see a fair lottery. So great were the charms of insuring, while
the chances were so small, that respectable tradesmen, in defiance of the
law, met for this illegal purpose, on the following day to that on which
some of their body had been taken handcuffed before a magistrate. The
agents were spread in every country village, and the possession of a prize
was an absolute curse to the community. Its effects were witnessed
alike in the shock it gave to industry, and the love of gambling it spread
among the people. It is due to those whose voices were lifted up against
these abominations to say, that their appeals to the good feeling of the

Effects upon the People.

government were incessant ; but the state replied in that language which
is so unanswerable when held by a firm government, that the necessities
of the state overbalanced the evils of the lottery.

Nor could ignorance be pleaded of its fatal effects. The domestics of
the senators themselves purchased shares with their masters' money ;
and members of the lower and upper house were unable to resist the
fascinations of the game they condemned. The most subtle language
was not wanting to support the cause. Scripture was used to defend it ;
and as the Bible was perverted by the supporters of the slave-trade, and
lately by the discoverers of the virtues of chloroform, so was it now
wrested to prove the antiquity and sanctity of lotteries. " By lot," they
said, " it was determined which of the goats should be offered to Aaron.
By lot the land of Canaan was divided. By lot Saul was marked out for
the kingdom. By lot Jonah was discovered to be the cause of the storm."

There are many incidents, which, recorded in contemporary annals,
have been either overlooked or disregarded as insignificant. There is,
however, nothing insignificant connected with so important a topic, and
nothing ought to be overlooked on an evil which has eaten to the very
heart of society, and which may again be used by some unscrupulous
minister for some unscrupulous purpose. The declaration of Sir Samuel
Romilly, that " whenever the House voted a lottery, they voted that the
deserving should become depraved," with the additional assertion, that
" the crimes committed would be chiefly bought off by the paltry gain to
the state coffers," was entirely disregarded.

Let it be remembered that a chancellor declared " he could not see
that lotteries led to gambling," that though the Corporation of London
presented an earnest petition for their abolition, as injurious to commerce
and injurious to individuals, that though Lord Mansfield said the state
exhibited the temptation and then punished for the crime to which it
tempted, that though, on one occasion, out of twenty-two convicts who
left the country, eighteen commenced their career with insuring, that
though forged notes were encouraged from the carelessness with which
lottery-office keepers received and passed them, that though it was
iterated and reiterated that no circumstances conduced so much to make
bad wives and bad husbands, bad children and bad servants, that
though men threw themselves into the river from the infatuation of their
wives, though the plate of respectable families was pledged to assist the
mania, that though the poor-rates were increased, and the consump-
tion of excisable articles diminished, during the drawing, that though
the gambling and lottery transactions of one individual only were pro-
ductive of from ten to fifteen suicides annually, that though half a
million sterling yearly came from metropolitan servants, that though
four hundred fraudulent lottery-offices were in London alone, that
though no revenue was ever collected at so great an expense to the
people, that though families pawned every thing they had, sold the
duplicates, and were reduced to poverty, that though women forgot the
sanctities of their sex, that though the parishes were crowded with
applicants who had reduced themselves by insurances, that though
perjury was common, and small annuitants squandered their resources,
5 49

Morocco Men.

that although all these pictures were drawn, and statements made, so
publicly and so prominently that they could not fail to reach even the
obtuse ears of a dominant ministry, yet it was not until 1826 that
the evil was abolished. A similar pressure may recall the evil. It is of
no importance to argue that lotteries are forbidden, and that the morals
and the minds of the people are more regarded. Lotteries have been
repeatedly forbidden, but they have been invariably renewed when the
coffers of the state were low ; and the morals of the people are a minor
point compared with the balance-sheet of the nation.

The melancholy history was occasionally enlivened by episodes, which
sometimes arose from the humor, and sometimes from the sufferings of
the populace. It is recorded as a fact, that, to procure the aid of the
blind deity, a woman to whom a ticket had been presented caused a peti-
tion to be put up in church, in the following words : " The prayers of
the congregation are desired for the success of a person engaged in a new
undertaking "; a singular contrast to others, who sought the midnight
gloom of a church-yard to secure them the good fortune so eagerly craved.
Romantic incidents often checkered the history. Old bureaus with se-
cret drawers, containing the magic papers which led to an almost magic
fortune, were purchased of brokers, or descended as heirlooms.

The evils in country places were more vividly impressed on the mind
from the smallness of the population. In a village near town, a benefit-
club for the support of aged and infirm persons existed for many years.
Among the members was one who, in trying his luck, gained 3,000.
The effect was feverish and fatal to the peace of the little community.
The society formed to nourish the sick and clothe the needy, was con-
verted into a lottery-club. The quiet village, which had hitherto vege-
tated in blessed peacefulness, rang with the sound of prizes, sixteenths,
and insurances. People carried their furniture to the pawnbrokers, while
others took their bedclothes in the depth of winter to the same source.
The money thus procured was thrown away upon lotteries ; and the
prize of 3,000 was destructive to the happiness of the place.

Up to the year 1780, although these many evils were well known,
insurances, and every species of gambling connected with the lottery,
were legal. But the malady grew so violent, that, after much urging, a
step was taken in the right direction. Insurances were declared illegal,
and prohibited under very heavy penalties. So many, however, were
imprisoned, and perjury was not wanting for the sake of the penalty,
that some check was necessary. A law, therefore, was made, preventing
any one from suing save the Attorney-General ; and some idea may be
formed of the extent of the evil from the fact, that, between 1793 and
1802, upwards of one thousand were punished with imprisonment. But
the determination to insure surpassed the determination to punish. The
officers of government were absolutely defied. Blood, in defence of that
which the law declared illegal, was freely shed. So organized was the
system, that two thousand clerks, and seven thousand five hundred per-
sons known as " Morocco men," with a numerous staff of armed ruffians,
were attached to the insurance-offices. Committees were held three
times a week ; measures were invented to defeat the magistrates ; money

Parliamentary Report, 1805.

to an enormous extent was used to bribe the constabulary ; while to those
who refused to be bribed, a bold and insolent defiance was offered, with
threats, which the officers well knew would be executed at the risk, or
even the certain sacrifice, of life.

In 1805, Parliament again took cognizance of the evil. The reiterated
declarations of the press, the repeated assertion of members of the sen-
ate, the universal voice of the country, coupled with the notorious fact,
that crime continued to follow the system, compelled government to ap-
point a committee of the House to report upon it. The attendance of all
who could give any information upon the subject was required, and a
volume of evidence printed, which, though it must have opened the eyes,
could not open the hearts, of the ministers.

Time, instead of softening or subduing the misery, had extended its
ramifications into the highest, as it once had been confined to the lowest,
society. The middle class ordinarily supposed to be freest from vice
had gradually succumbed. The penniless miscreant of one day be-
came the opulent gambler of the next ; and the drawing of the lotteries
might be marked by the aspect of the pawnbrokers' shops, which over-
flowed with the goods of the laborer, with the ornaments of the middle
class, and with the jewels of the rich. Servants went to distant places
with the purloined property of their masters, pledged it, and, destroying
the tickets, insured in the lottery. Manufacturers discharged those
workmen who could not resist the temptation. During the drawing of
the prizes less labor was done by the artisans. Housekeepers of the
lower order were unable to pay their taxes ; money was begged from
benevolent societies ; and men, pretending they were penniless, were fed
and housed by the parish while embarking in these chimerical schemes.
Felons, on the morning of an ignominious death, named lotteries as the
first cause ; and often, if a dream pointed to a particular number, crimes
were committed to procure it, which led to transportation instead of for-
tune. Individuals presented themselves to insure, with such unequiv-
ocal marks of poverty in their appearance, that even the office-keepers
refused their money ; and yet, such was the indefatigable love of adven-
ture, that many would come in at one door as fast as they were shown
out at the other.

" When I have caught a great many in a room together," said one
witness, " I have found most of them poor women, and in their pockets
twenty or thirty, and even sixty, duplicates on one person. Their pillows,
their bolsters, their very clothes, were pledged, till they were almost
naked."

" First," said Mr. Sheridan, " they pawned ornaments and superfluities,
then their beds, the very clasps of their children's shoes, the very clothes
of the cradle. The pawnbroker grew ashamed of his profession."

A walk near the spot where the prizes were announced painfully
evinced the progress this terrible delusion had made, and the classes to
which it had extended.

Hundreds of wretched persons, the refuse of society, the very dregs of
the people, might be seen waiting with frightful eagerness until their fate
was decided. The courtesan was there, forgetting for a time her avowed

Lamentable Effects of Lotteries.

pursuit ; the man who the night before had committed some great crime ;
the pale artisan with his attenuated wife ; the girl just verging upon
womanhood ; the maid-servant, who had procured a holiday to watch her
fortune ; weary forms and haggard faces, mingling with the more robust
and ruffianly aspects, yet all bearing one peculiarity, that of intense
anxiety, marked the purlieus of the place where the lottery was drawn.
The oath which shocked the ear, the act which shocked the eye, the
scurrilous language of the boy ripe in mature iniquity, the scream of the
child dragged from its rest, to mingle in scenes it could not compre-
hend, formed a pictorial group which Hogarth alone could have given to
posterity, as an evidence of civilization in the nineteenth century.

But it has been said, that the mischief was not confined to the poorer
classes. Persons of the first consequence entered into insurances for a
great amount. Instances are not wanting, in which gentlemen of large
landed property, guilty of no other extravagance, lost all their cash, sold
their estates, and died in the poor-house.

The " Morocco men," so called from the red morocco pocket-books
which they carried, were remarkable features in the lottery, half a century
ago. They began their lives as pigeons, they closed them as rooks.
They had lost their own fortunes in their youth, they lost those of others
in their age. Generally educated, and of bland manners, a mixture of
the gentleman and the debauchee, they easily penetrated into the society
they sought to destroy. They were seen in the deepest alleys of Saint
Giles, and were met in the fairest scenes of England. In the old hall
of the countiy gentleman, in the mansion of the city merchant, in the
butlery of the rural squire, in the homestead of the farmer, among the
reapers as they worked on the hill-side, with the peasant as he rested
from his daily toil, addressing all with specious promises, and telling
lies like truth, was the morocco man found, treading alike the finest and
the foulest scenes of society. They whispered temptation to the inno-
cent ; they hinted at fraud to the novice ; they lured the youthful ; they
excited the aged ; and no place was so pure, and no spot so degraded,
but, for love of 7| per cent., did the morocco man mark it with his pes-
tilential presence. No valley was so lonely, but what it found some vic-
tim ; no hill so remote, but what it offered some chance ; and so enticing
were their manners, that their presence was sought, and their appearance
welcomed, with all the eagerness of avarice.

And little were they who dealt with these persons aware of the charac-
ters with whom they trafficked. Of bland behaviour, but gross habits,
the nature of their influence on the unpolluted minds with which they
had to deal may be judged from the fact, that some of the morocco men
ended their days at Tyburn ; that transportation was the doom of others ;
and that the pillory was the frequent occupation of many. To such men
as these were the morals of the people exposed through the lottery.
Nor, if the opinion of a member of the senate can be trusted, was the
lottery-office keeper much better. " I know of no class of persons in the
country," said Mr. Littleton, " excepting hangmen and informers, on
whom I should be less disposed to bestow one word of commendation."

The wonder is, not that the public was tempted so much, but that it was

Nicholas Vansittart.

seduced so little. Puffing, by the side of which the power of a Mechi
and a Moses waxes dim, was employed to assist the contractor. Myriads
of advertisements were circulated in the streets. The newspapers, under
all forms and phases, contained stories of wonderful prizes. Horns were
sounded ; huge placards displayed ; false and seductive lures held out ;
houses hired for the sole purpose of displaying bills ; falsehoods fresh
every day ; and fortunes to be had for nothing. Puffs, paragraphs, and
papers circulated wherever the ingenuity of man could contrive. The
public thoroughfares were blazoned by day and lighted by night with
advertisements.

With such a picture of crime as has been presented to the reader, he
may not think the quiet satire of Mr. Parnell on the Chancellor unmerit-
ed. He said that the following epitaph ought to be placed on his grave :

" Here lies the Right Honorable Nicholas Vansittart, once Chancellor
of the Exchequer, who patronized Bible Societies, built churches, en-
couraged savings' banks, and supported lotteries."

The attention bestowed on the subject, the mass of intelligence col-
lected, the evidence given by competent parties, produced considerable
notice, and the report condemned the evil the committee had examined.

" The foundation of the lottery," it said, " is so radically vicious, that
under no system can it become an efficient source of gain, and yet be
divested of the evils and calamities of which it has proved so baneful a
source.

" Idleness, dissipation, and poverty are increased ; sacred and con*
fidential trusts are betrayed ; domestic comfort is destroyed ; madness
often created ; crimes subjecting the perpetrators to death are committed.

" No mode of raising money appears so burdensome, so pernicious,
and so unproductive. No species of adventure is known where the
chances are so great against the adventurers ; none where the infatuation
is more powerful, lasting, and destructive.

" In the lower classes of society, the persons engaged are, generally
speaking, either immediately or ultimately tempted to their ruin ; and
there is scarcely any condition of life so destitute and so abandoned, that
its distresses have not been aggravated by this allurement to gambling."

Notwithstanding the strong nature of this report, the labors of the com-
mittee were fruitless. Various attempts at amelioration were made, but
the evil was not finally abolished until the year 1826.

5* 53

Life Insurance.

CHAPTER IX.

Wholesale Jobbing. Insurance on Sick Men. False Intelligence. Uselessness
of Sir John Barnard's Act. Origin of the Blackboard. Opposition to
Loans. Lord Chatham's Opinion of Jobbers. Inviolability of English
Funds. Parisian Banking-Houses. Proposition to pay off the National
Debt. Extravagance of the Contractors. Lord George Gordon's Opinion
of them. Members'' Contracts. New System adopted. Abraham Gold-
smid. Bankers' Coalition broken by him. His Munificence. His Death.
Sensation in the City.

THE following picture of wholesale jobbing, drawn from public and
private documents, from correspondence, from newspapers, and from
Parliamentary history, will show that gambling was equally pursued in
high places as in 'Change Alley.

Letters from abroad, containing false intelligence, were forwarded to,
or forged by, senators ; names of importance were fraudulently used ;
the news was promulgated, and funds raised or lowered according to the
wish of the contriver. But if the jobber was cheated in one way, he
took his revenge in another. The domestics of public men were bribed
by him ; the secretaries of men in office were paid by him ; the mistresses
of ministers were accessible to him ; and, it is said, even their wives were
not seldom in the pay of members of the Stock Exchange. Nor did
many hesitate to declare that men in office not only made profit of the
news they really received, but that they promulgated false intelligence,
knowing, from their position, it would be received as true, at the expense
of their own character, and to the ruin of the men who trusted them.

Another practice had obtained a notoriety so bad and baleful, that it
became necessary to stop its progress. Directly it was known that any
great man was seriously ill, insurances on his life, at rates in proportion
to his chance of recovery, were made. These bargains were reported in
the papers ; and the effect on an invalid who knew his health to be pre-
carious may be imagined, when he saw in the Whitehall Evening Post,

that " Lord might be considered in great danger, as his life could

only be insured in the Alley at ninety per cent." The custom grew so
rapidly, and the evil was so serious, that the principal merchants and un-
derwriters refused to transact business with brokers who engaged in such
practices.

Of a less questionable character was the habit of insuring property in
any besieged city ; or the yet more common mode of paying a premium
to receive a certain sum, should the city be taken by the day named in the
contract. The Spanish ambassador was accused of insuring 30,000 on
Minorca, during the seven years' war, when the despatches announcing
its capture were in his pocket.

The newspapers were the vehicles generally employed to spread false
intelligence ; and an almost invariable success attended those who made

Origin of the Blackboard.

use of the press to promulgate, in bold type and inflated language,
" bloody engagement," " rumored invasion," or " great victory," to
assist their city operations. Every class, from the maiden who jobbed
her lottery-ticket, to the minister who jobbed his intelligence, was in-
volved in the pursuit. All these bargains were for time, and continued
to prove that the act by which Sir John Barnard hoped to abolish gam-
bling was useless ; and it is an anomaly in the history of our great debt,
that bargains in the very funds which were raised to support the national
credit are disallowed by the national legislature. It is a law which has
been tried and found wanting. It does not prevent, in the smallest or
slightest degree, the system it was meant to crush ; and it adds to the
immorality of the speculator and the risk of the broker, by allowing the
former to repudiate his bargain at the expense of the latter.

Under the early loan-acts, tallies were delivered to the first contractors.
When a sale was effected, the name of the purchaser was indorsed upon
the tally, and from that entered into the government books, for the con-
venience of paying the dividends to the right person. This clumsy ma-
chinery was afterwards abolished ; but though, in 1717, the transfers and
dividends of the national debt were first undertaken by the Bank, it was
not until 1783 that the present method of transfer was adopted.

The origin of the blackboard that moral pillory of the Stock Ex-
change occurred in 1787. " There were no less than twenty-five lame
ducks," said the Whitehall Evening Post, " who waddled out of the
Alley." Their deficiency was estimated at 250,000 ; and it was upon
this occasion the above plan was first proposed, and a very full meeting
resolved, that those who did not either pay their deficiencies or name
their principals should be publicly exposed on a blackboard to be ordered
for the occasion. Thus the above deficiencies larger than had been
previously known alarmed the gentlemen of 'Change Alley, and pro-
duced that system which is yet regarded with wholesome awe.

During the administration of Mr. Pitt, in 1786, a sinking fund was
again attempted ; the various branches of revenue being united under the
title of the Consolidated Fund. One million was annually taken from it,
and placed in the hands of the Commissioners for the Redemption of the
National Debt, and was applied in purchasing such funds as might be
deemed expedient at the prices of the day. The interest of the debt thus
redeemed, the life-annuities which fell in, or the annuities which expired,
were added to the fund, the interest of which, when the principal amount-
ed to four millions, was no longer to be applied to it, but remain at the
disposal of Parliament.

The difficulties which every minister met in every new loan, were
more in proportion to the power of the opposition, than to the fairness or
necessity of the demand. In unpopular wars, these difficulties were
doubly increased. In the American contest, the whole population de-
manded peace ; and nothing but the obstinacy of " the best farmer and
worst king," nothing but a corrupt Parliament, wholesale places, a dom-
inant aristocracy, and large premiums to the moneyed interest^ could
have carried Lord North through the session, enlivened by his humor,
and the enmity created by the war. The loans, therefore, of this period

Loans 0/1779 -80.

were fiercely attacked ; 'Change Alley fiercely denounced ; and the
plans of the government hotly contested. The mode of conducting the
loans was then, as before, made conducive to the majority of the minis-
try, at the expense of the people. Out of 60,000 lottery-tickets, 22,000
were given to a few members, producing 44,000 profit. When the
system was attacked, precedent, the bane of official people, was quoted ;
and because it was known that, in 1763, Mr. Fox had ,100,000,
Mr. Calcraft and Mr. Drummond ,70,000, the Governor of the Bank
150,000 for the corporation, and < 50,000 for himself, and other
members similar sums, it was deemed a sufficient and an unanswerable
defence. But though by such methods the minister got the votes of the
House, he found it more difficult to get the money from the public after
it was voted. In 1779, he was greatly troubled to procure it on reason-
able terms. From bankers he went to contractors, from contractors to
stock-jobbers, and from stock-jobbers he went back to the bankers, pay-
ing a much higher rate than they at first demanded. " It was but yes-
terday," writes Horace Walpole, " that Lord North could tell the House
he had got the money on the loan, and is happy to get it under eight per
cent." The loan of 1780 brought them again into disrepute. Half was
given to members of the House of Commons ; more than three mil-
lions was allotted to one person ; and, without regard to the welfare of
the nation, the price was determined at a rate so favorable to the con-
tractors, that, from no cause save the low terms on which it had been
taken, the scrip arose at once to eleven premium. In 1781, it was said
that Lord North had made an infamous bargain in a bungling manner ;
and that, in 1782, he had made a bungling bargain in an infamous man-
ner ; and this was solemnly protested against as an improvident opera-
tion, a corrupt job, and a partial distribution. There cannot be a doubt
that the mode of conducting these loans was detrimental to the national
interest, and conducive to that of the Stock Exchange. There were
three plans up to this period. The first was in the offers of private indi-
viduals, stating the sum each would advance ; the second was an open
subscription at the treasury ; and the third a close subscription with a
few. By the first, the members of Parliament were bribed ; and by the
third, the bankers ; then the principal contractors were enriched. Their
interest, and it was great, with their votes in the House, and they were
many, were, therefore, at the disposal of the government. In 1783, out
of a loan for ,12,000,000, .7,700,000 were given to bankers. So
disgraceful was the whole affair, that Lord John Cavendish was compelled
to apologize for the terms on which it had been granted, because u the
former minister had left the treasury without a shilling." By attempting
to please men of all parties, Lord John, as usual, pleased none. He was
abused by some for dividing it among so small a number ; he was rated
by others for allowing so many to have a share. Mr. Smith, of the house
of Smith & Payne, made a formal complaint that he had been neglect-
ed in the allotment ; that his firm was the only one left out ; and that, in
consequence, a stigma of a very disagreeable character was attached to
it. By the explanation, it appeared that another house of the same name
had been accused of tempting customers from the various bankers, by

Lord Chaihani's Opinions.

giving portions of the loan to those who would secede. The meanness
had been attributed to Smith, Payne, &; Co., and Lord John omitted
them in consequence from his list. Mr. Smith was very irate on the sub-
ject ; and although his Lordship explained, as the explanation was unac-
companied by a share of the loan, it was, probably, very unacceptable to
the indignant banker. Although this gentleman saw no harm in receiv-
ing a portion of the loan, other bankers had higher views. Mr. Martin,
believing that, as a senator, he ought not to contract, lest it might bias his
votes, conscientiously refused to accept any portion of loan or contract ;
and thus sacrificed his pocket to his principle.

When jobbing occurred in the senate, who can wonder at the jobbing
in the funds, or at the strong feeling which such contemptible squabbling
created, and which fell upon the members of the House of 'Change as
fiercely as on the members, of the House of Commons ?

" Such gentry," said one, " coin disaster to sink the funds without
cause. If gospels mended mankind, there should have been a new ser-
mon preached on the mount, since 'Change Alley was built, and money-
changers were driven out of the temple all over Europe." " Ten thou-
sand lies are propagated every week, not only by both sides, but by
stock-jobbers. Those grave folks, moneyed citizens, contribute exceed-
ingly to embroil and confound history, which was not very authentic
before they were spawned."

Lord Chatham was not backward in expressing an opinion of those
whom he designated " the cannibals of 'Change Alley." " To me, my
Lords," he once said, " whether they be miserable jobbers of 'Change
Alley, or the lofty Asiatic plunderers of Leadenhall Street, they are
equally detestable." The same strong feeling animated him when he
was told that one of his measures had caused a decline in the stocks.
" When the funds are falling, we may be sure the credit of the country
is rising."

A finer spirit and that spirit is the principle which has pervaded the
whole public transactions of England was evinced when the same
nobleman was advised to retaliate on the Dutch merchants, who had
committed several outrageous frauds on the English, by seizing their
immense property hi our funds. " If the Devil himself had money there,"
he replied, " it must rest secure." To his Lordship, and to the political
assertion he made, that " not a gun should be fired in Europe without
England knowing why," it was of the utmost importance that the integ-
rity of the nation should be maintained.

During the American war, many of those in arms had property in the
funds ; and the provinces, as bodies corporate, had money in the same
securities. It is to the credit of the revolutionists, that, though they fully
expected this property would be confiscated, they persisted in their
course ; and it is equally to the credit of England, that their capital was
as secure, and their interest as regularly paid, as if they were not in open
rebellion.

Not only in loans were the people wronged and robbed, the word is
harsh, but expressive, the contracts for the public service exhibited
also the most gross and glaring favoritism. From time to time the evil

Mr. Fox and Lord George Gordon.

was exposed ; Parliament grew violent, and the public waxed wroth.
Every quarter of a century, an inquiry was instituted, and the whole
ended partly in some influential person being disgraced, and partly in an
expression, that " the said frauds and abuses were one great occasion of
the heavy debt that lies upon the nation." A few specimens may serve
to indicate the wrongs which, from time to time, have aggrandized an un-
popular government, have swollen the pockets of the few, and increased
the wants of the many.

The borough-monger, who for years had been in possession of a
pocket borough, found his property disturbed, and his constituents tam-
pered with, by the contractor, who, as a candidate for the honor of the
forum, was marked by vice, extravagance, and folly. As a member of
the senate, he assumed the purity of the patriot, complained of the ab-
sence of economy, and declared how much cheaper the public business
might be accomplished. He teased the minister ; he perplexed the Parlia-
ment ; he puzzled the government ; until, by giving him a job, the patriot
was turned into a contractor, and from that hour he marked the public
money as his own. If the First Lord of the Treasury were indolent, the
contractor availed himself of his sloth ; if ignorant, he taught him, and
made the country pay for the lesson.

The very name of a contractor was odious, and their luxuries were
bitter in the eyes of the people. Their abodes were like those of prin-
ces ; their daughters wedded with nobles ; the follies of their sons were
the talk of the town ; they died possessed of fortunes which kings might
envy ; and, as nearly all were members of Parliament, attention became
pointed at men whose mansions and whose manors, bought with public
money, challenged public notice.

" The minister," remarked Mr. Fox, " said to him, 4 1 will give you a
contract, if you will give me a vote.' The contractor replies, 4 Now I
have given you a vote, give me a contract. I voted that we had forty-
two ships when we had but six, and that the French fleet did not consist
of thirty-two ships. You must not, therefore, quarrel for twopence a
gallon on rum, or a farthing on a loaf of bread.' '

Lord George Gordon, shortly before his extraordinary conduct in 1780,
said, "This dunghill of contracts has given an ill air to our whole
proceedings. It has got abroad, and proves very offensive to the public
nostrils. Our constituents begin to smell a rat. They nose us in the
lobby, and call us tailors and shoemakers, cobblers and cabbage-salters,
potato forestallers, sour-krout makers, and swine contractors. The dig-
nity, reputation, and fair fame of the Commoners is smothered and sink-
ing in porter and salted cabbage, shoes, sour-krout, and potatoes." Lords
of trade ordered pewter inkstands by the hundred, sold them, and pur-
chased silver ones with the money they produced ; or ordered green
velvet bags for official papers, and employed the velvet of which they
were composed to make court dresses.

Under the Pelham administration, members received regular stipends
in bank-notes, from 500 to 800 yearly, varying according to the
influence or ability of the senator. " This largess I distributed," added
the person who took charge of the delicate department, and the par-

Bribes to Members.

ticulars are worth enumerating, " in the court of requests on the day
of the prorogation of Parliament. I took my stand there ; and as the
gentlemen passed me, in going to or returning from the House, I con-
veyed the money in a squeeze of the hand. Whatever person received
the ministerial bounty, I entered his name in a book which was preserved
in the deepest secrecy, it being never inspected by any one but the king
and Mr. Pelham." This book was afterwards demanded of Mr. Rob-
erts, the almoner, but he resolutely refused to yield it except by the
king's express command, or to his Majesty in person. In consequence of
his refusal, the king sent for him to St. James's, where he was introduced
into the closet. He was then ordered to return the book in question,
with which injunction Mr. Roberts immediately complied. At the same
time, taking the poker in his hand, his Majesty put it into the fire, made
it red hot, and, while the ministers and Mr. Roberts stood round him,
he thrust the book into the flames, where it was immediately reduced to
ashes.

These evils were so manifest and manifold, that, after various attempts
to pass a measure which should be some check on government, a bill was
introduced, by which all contracts were made subject to a species of
auction, although the minister was not compelled to accept the lowest
offer.

During the debates which were held upon the subject, many other facts
were elicited, which confirm all the previous remarks, and prove the
iniquity with which the money of the country was disposed of. One
member possessed a contract producing 30,000 a year more than the
legitimate profit. Mr. Alderman Harley made < 37,000 too much by
another. On a contract for remitting gold, 35,000 was paid more than
was necessary. At an earlier period it was discovered, that, out of 16,000
tuns of beer contracted and paid for, only 7,000 tuns were delivered.
The rum contract was granted at fifty per cent, above a remunerating
price. The transport service paid twenty per cent, too much. Millions
were lying for years in the hands of favorite placemen, favorite agents,
and favorite contractors, while the country was borrowing at an exor-
bitant interest ; and, after a careful perusal of the evidence, there can be
no doubt that the charge of corrupting the fiouse was true ; nor was it
in the nature of a member of Parliament in the eighteenth, any more than
in the nineteenth century, to possess profitable contracts, the continuation
of which depended on war, and yet speak honestly and earnestly for
peace.

The names of Abraham and Benjamin Goldsmid will recall to the
memory of many of our readers the forms and features of these mag-
nates of the money-market. Of singular capacity, and of equally sin-
gular good fortune, the firm of which they were the members rose, from
comparative obscurity, to be the head and front of 'Change Alley.

Prior to 1792 they were little known, Mr. Gurney, the eminent bill-
broker, regards them as his predecessors, but by that year they occu-
pied an important position, and became successful competitors for the
national loans. They were the first members of the Stock Exchange
who competed with the bankers for the favors of the Chancellor, and

The Bankers' Coalition.

diverted from their purses those profits which were scarcely a legitimate
portion of banking business. The combination of that interest being thus
broken, the bargains for public loans became more open ; there was no
confederation to limit and lower the prices ; and the ministry and country
reaped the benefit in improved terms. The house of Sir William Curtis,
whose fortunes were founded in this manner ; of Dorrien and of Boldero,
names which, great in their day, have almost passed from the roll of city
bankers ; of Grote, now better known as the philosophical historian of
Greece ; were all competitors, three quarters of a century ago, for those
loans which the necessities of the country made so frequent. Nor were
people wanting who openly accused the entire banking interest of an
unfair confederation to realize their views. This interest was first at-
tacked by the boldness of Abraham and Benjamin Goldsmid ; and it is
easy to imagine the feelings of the bankers when unknown men reaped
the prize which they had hitherto gathered.

The daily papers bore an almost daily testimony to their munificence.
Naturally open-handed, the poor of all creeds found kindly benefactors.
On one day, the grandeur of an entertainment to royalty was recorded ;
and on the next, a few words related a visit of mercy to a condemned
cell. At one time, mansions, vieing in architectural beauty with those
of our nobility, were described ; at another, some great and gracious act
of charity was recorded. Entertainments to princes and ambassadors,
reviving the glories of the Arabian Nights, were frequent ; and galleries,
with works of art worthy the magnificence of a Medici, graced their
homes. They were awhile Fortune's chief and most especial favorites.
When, in 1793, the old aristocracy of England's traders fell, as in 1847,
and the Bank in one day discounted -4,400,000, their losses amounted
but to 50. Prizes, under circumstances little inferior to romance,
followed their purchases of lottery-tickets ; and they knew, as if by in-
stinct, a bill of exchange with a bad name to it.

The brothers had faced the storm of life in their earlier years. For-
tune, which crowned their efforts, proved that prosperity had no power to
divide them ; and when, in the early part of the nineteenth century,
Benjamin Goldsmid destroyed himself, the survivor felt the loss so severe-
ly, that he never recovered the shock. The death of Benjamin caused
no abatement in the benevolence of Abraham Goldsmid ; and one who
knew him well has written with enthusiasm of his " general philanthropy,
his ready munificence, his friendly demeanour, his mild and unassuming
manner."

Many anecdotes, singularly illustrative of his kindly feeling, are still
remembered. It is stated that, on one occasion, noticing a great de-
pression in the waiter who usually attended him where he dined, he in-
quired the cause, ascertained that it was pecuniary, gave the astonished
man double the amount he required, and refused to listen to the thanks
of the recipient. Another story is extant to the same purport. He be-
came acquainted by accident with one of those simple and single-minded
country curates, whose poverty was the disgrace, and whose piety was the
glory, of the Church of England. This was the man for Abraham Gold-
smid at once to appreciate and to benefit. He obtained all the necessary

Baring and Goldsmid.

particulars, and in a few weeks a letter was received, which told the
curate he had been allotted a share of a new loan. The letter was a
mystery to the country clergyman, who placed it on one side, with a
confused notion that a hoax was intended. He had not long to wait.
The next day brought a second letter, and with it comfort and consola-
tion, in the shape of a large sum which had been realized on the allot-
ment These things are pleasant to record ; and it is doubtful whether
the check gave most pleasure to the wealthy Hebrew to write, or the
country curate to receive.

In 1810, the houses of Baring and Goldsmid were contractors for the
ministerial loan of fourteen millions. But Sir Francis Baring dying, the
support of the market was left to his companion. The task was difficult,
for a formidable opposition had arisen, which required the united energies
of both houses to repress. It was the interest of this opposition to reduce
the value of scrip, and it succeeded. Day by day it lowered ; and day
by day was Mr. Goldsmid's fortune lowered with it. He had about
eight millions in his possession ; and with the depression of his fortune,
his mind grew dispirited and disordered. Another circumstance occurred
at this particular, moment to increase his embarrassment. Haifa mil-
lion of exchequer-bills had been placed in his hands to negotiate for the
East India Company ; and the latter, fearing the result of the contest on
the Stock Exchange, claimed the amount. His friends did not rally
round him, as at such a moment, and with such a man, his friends should
have done ; and Abraham Goldsmid, dreading a disgrace, which his sen-
sitive and honorable nature magnified a hundredfold, after entertaining a
large dinner-party, destroyed himself in the garden of his magnificent
residence, in Surrey.

This sad event created a sensation in the city, unparalleled by the loss
of any single individual. The death of the great loan-contractor was
regarded as of national importance. Expresses were sent with the news
to the king and the Prince of Wales. The funds fell three per cent.
The journals united in eulogizing the man whose death they recorded.
The jobbers of Capel Court crowded in anxious inquiry. The mer-
chants of the Exchange assembled before the accustomed time. The
thoroughfares resounded with rapid questions and hurried replies. Little
or no business was done ; and, it is said, the great question of peace or
war never created a similar confusion. The jury recorded their opinion,
and, when the remains were carried to their home, the procession was
followed by a crowd, who, partaking of his charity in life, thronged to
honor him in death. Sobs and suppressed moans attested the reality of
their sorrow, and bore a fitting testimony to his worth. The high-priests
and elders paid every distinction which the Mosaic ordinances allowed ;
but, in conformity with the commands of the great lawgiver, they with-
held from him the customary rites ; and unconsecrated ground received
the remains of Abraham Goldsmid, the Hebrew suicide.

In 1792, another sinking fund was established, of one per cent, on the
nominal capital of each loan, to which the interest on the capital redeem-
ed by this fund was to be added. When annuities for lives, or for a
longer term than forty-five years, were granted, the value which would
6 61

New Fraud in Scrip.

remain after forty-five years was to be estimated, and one per cent, on
that value set aside for their redemption. This fund was to be kept
separate, and applied to redeeming debts contracted subsequent to its
institution ; and this, it was estimated, would redeem every loan in forty-
five years from its contraction. ,400,000 was granted in aid of the
previous sinking fund ; and 200,000 annually till 1802, when the grant
was rendered perpetual. All money saved by the reduction of interest
was also to be added ; but, as no savings occurred, this clause might as
well have been omitted. In 1798, however, the application of one per
cent, on the capital of the loans was deviated from, as the claims of the
war were too pressing to allow of its application.

CHAPTER X.

Curious Forgery. Its Discovery. Loan of 1796. Its Management.
French Revolution and its Effect. List of Subsidies to Foreign Powers.
Removal of Business from ' Change Alley. Erection of the present Stock
Exchange. Loyalty Loan. Preliminaries of Peace. Its Effect. Hoax
on the Stock Exchange. War renewed. Great Fraud on the Jobbers.
Its Discovery. Rights of Stock-brokers.

ON the 2d of November, 1793, as Mr. Martin, broker of 'Change
Alley, was occupied in his business, he was applied to by a young man
of somewhat effeminate appearance and of good address, to sell 16,000
scrip. As Mr. Martin was explaining to the applicant that an introduc-
tion was necessary, a Mr. Lyons, also a member of the Alley, esteemed
a reputable person, passed, and the young man, to remove Mr. Martin's
doubts, immediately pointed to Mr. Lyons, as thoroughly aware of his
respectability. The latter, on being questioned, said he knew the stran-
ger intimately, at the same time expressing his dissatisfaction at not
being employed by him. The introduction was sufficient for Mr. Mar-
tin, and he sold that day 10,000 out of the 16,000 intrusted to his
care. The seller, by some curious chance, or for some subtle reason,
did not make his appearance to receive the proceeds, nor did he leave an
address to which it might be sent. On the following morning, however,
Mr. Martin received a visit from him at his private residence ; but, on
being informed that the whole of the stock was not sold, his demand for
payment was delayed. The day on which the remainder of the scrip
was disposed of was a holiday at the Bank, and from this simple circum-
stance arose the discovery of a curious fraud. The business at the Stock
Exchange on public holidays is trifling, and the buyer, instead of hur-
riedly depositing the scrip in his pocketbook, had leisure to remark that
there was some irregularity about it. Mr. Martin at once stepped over to
the Bank, checked the document, and discovered the forgery.

Loan of Eighteen Millions in 1796.

The scheme to which this gentleman had so nearly fallen a prey was
cunningly contrived. The effeminate applicant to Mr. Martin was the
sister of Lyons, disguised in male attire, Lyons having placed himself
in the way at the proper moment to give the necessary character ; and,
had it not been for the chance circumstance alluded to, would have
profited largely by the deceit. The scheme failed ; Lyons was appre-
hended ; and, rather than give his sister the affliction of appearing against
him, he pleaded guilty ; thus sacrificing the slight chance of life which
remained, to spare the feelings of her whom he had betrayed into crime.

In 1796 a loan for eighteen millions was proposed. The usual in-
quiries were made by the interested parties, and the Chancellor of the
Exchequer positively declared that it should be conducted upon prin-
ciples of free and open competition. The day was appointed to arrange
its preliminaries. Mr. Mellish, Mr. James Morgan, and Mr. Boyd, were
competitors ; and when they had assembled, Mr. Boyd requested a few
words in private with the Chancellor. The request was granted ; and
the surprise of Messrs. Mellish and Morgan may be conceived, when the
Chancellor, on returning, proposed, that, if the latter bid for the loan, Mr.
Boyd should be at liberty to supersede them on paying half per cent,
above the highest offer. This was decidedly and indignantly refused ;
and the Chancellor, without any other proposition, at once agreed to take
the terms offered by Mr. Boyd, although it was fully understood by all
that there should be no final settlement on that day. The real causes of
this extraordinary proceeding are difficult to ascertain ; but the excuse
offered by the Chancellor was, that Boyd had some claim on govern-
ment, in consideration of the previous loan not having entirely expired.
Allowing this, the state had no right to remunerate Mr. Boyd at the ex-
pense of others ; and as very little of the previous scrip remained in his
possession, it was, whatever partisanship might allege in excuse, a gross
dereliction of public duty, and a great misdirection of public interest, to
allot a loan without competition, at a loss of ,499,500 to the public.
At any rate, the contract was notified as open, the Governor of the Bank
was authorized to declare it so, and the Chancellor expressed no doubt
upon the subject.

There was much comment at the time. There was also a curious
story in circulation of bills to the amount of 700,000 having been
drawn on the treasury in fictitious names, and with fictitious dates ; and
it was asserted that, when the loan was contracted, it was absolutely
known by the Cabinet that the king's speech would inevitably raise the
funds, and add five per cent, to the gains of the contractor. Before
the first payment, .2,160,000 was the profit on a contract for eighteen
millions.

During the loans so frequently mentioned, it was curious to witness
the bidders arising at early dawn ; waiting from two until ten in the
morning, and then see them rush, with all the eager impetuosity of gain,
to grasp a share of the proffered good.

When it became known that, on the 12th of May, 1789, an insurrec-
tion had broken out at Paris, it was but little imagined that its effects
would press upon the resources of England for ever, increase her tax-

Effects of the French Revolution.

ation, and embarrass her councils ; and as news came from time to time
of the excesses of the mob, the destruction of the Bastille, and the
murder of the monarch, it was received in accordance with the political
principles of the listener.

The first effect of the revolution shook the state to its foundation. A
strong democratic tendency passed through Europe, and England shared
the peril. A feeling of public wrong was prevalent. A fierce move-
ment convulsed the populace. Debating societies were established, and
the misgovernment of the nation was exposed. The public-houses were
filled with orators, and the cry for reform was incessant. The press
teemed with warnings and appeals. Societies corresponding with the
Jacobin clubs of Paris were established. Some of the first men in Eng-
land welcomed the revolution with enthusiasm, while the masses hailed it
with delight. The Convention was congratulated ; and it is surprising
that, with democratic principles, a democratic spirit, and a numerous
array of men of rank on the popular side, England should have preserved
her constitution.

William Pitt, the minister of the day, took a bold and determined posi-
tion. " It is not reform they want," he said, " it is revolution. They
wish to react the troubles of France ; to murder the king ; and establish
a republic." The people petitioned, and were neglected. They agi-
tated, and were punished. The youth of England clamored for more
freedom ; and revolutionary principles spread far and wide. Persons of
rank and property were alarmed, and formed associations against an-
archists and levellers. Parliament was summoned before its time ; the
Alien Bill was passed ; the naval and military forces were augmented ;
and when the French Convention declared they would assist the disaffect-
ed subjects of all monarchical governments, the English ministry de-
manded a disavowal. The demand was refused ; the French ambassador
was ordered to leave the kingdom ; and, in 1793, the war which added
so terribly to England's encumbrances was declared.

At this time the position of revolutionary France was remarkable.
From the commencement of the change, the princes of Europe regarded
it with dislike ; and the death of Louis was sufficient to decide all crowned
heads against the movement. So soon, therefore, as war was declared,
treaties were formed with the principal Continental powers. In six
months, seven treaties of alliance, and six of subsidies, were concluded.
Sweden coalesced with Russia, Prussia, and Austria. The German em-
pire followed. Bavaria, Suabia, and the Elector Palatinate joined the
hostile league. Naples followed the example of the Holy See ; and the
young republic, menaced from without and divided within, saw her ter-
ritory invaded by half a million of the most warlike troops in Europe.

But the danger was met boldly. The combined armies which were to
destroy democracy and establish kingly supremacy were checked at the
first onset. The republic resolved to conquer, and the waste of life was
disregarded. Conscriptions were frequent ; reinforcements arrived con-
stantly ; and the army of the allies gave way. But to roll back the tide
of war was insufficient for a victorious and a military people. The in-
vasion was carried from their soil, and the invaders were dishonored on

Subsidies to Foreign Powers.

their own hearths. A great man had arisen ; and Italy fell before the
genius of Napoleon. Holland was conquered ; Prussia and Spain sued for
peace ; the savage Russ and the disciplined Austrian alike gave way before
the fierce enthusiasm of the soldiery, and the greatness of the captain.

In the mean time, the aspect of affairs in England was alarming. In-
effectual trials for high treason agitated the people. Every effort to per-
vert casual discontent into determined rebellion was made. The price
of provision was high ; the system of subsidies impoverishing ; and tax-
ation saddened the homes and hearts of the people.

The emperor had received seven millions, Prussia a million and a
half ; and a host of minor powers had coalesced from similar causes.
But if the trials of the people were fearful, the difficulties of the govern-
ment were numerous. Disaffection among the populace, a powerful and
organized opposition within the House, a general hatred of the war with-
out, an oratory unsurpassed in the senate, an invective unsurpassed in the
street, an empty exchequer, a starving people, and quarterly loans, were
difficulties which even the fine eloquence of William Pitt, and the large
majorities he commanded, found it hard to surmount. Riots which en-
dangered the royal person ensued ; hundreds of thousands clamored
against the taxation which oppressed them ; and England seemed on the
brink of revolt.

But a yet more dangerous era awaited the land. The navy, which had
saved us from invasion, mutinied ; the gold of the country followed her
subsidies ; the Bank of England ceased to pay her notes in specie ; the
power of France increased ; Austria only remained to check the republic
on the Continent ; and Lodi witnessed a defeat which paralyzed the Impe-
rial power. The passage of the Alps followed ; and, within thirty miles
of his capital, humiliating terms were dictated to the Emperor of Austria.

England now stood alone against France. An invasion was threat-
ened ; but it stirred a spirit of resistance which will long remain a mem-
orable passage in English history. Every village had its volunteers,
every corporation its company ; and, whatever their defects may have
been in the eyes of military science, there was scarcely a man who
would not have marched to certain death to preserve the freedom inherit-
ed from his fathers. Song and sermon alike inspirited them ; night after
night watch-fires were prepared on the ^ lonely hills of the country ; and
the slightest sound or symptom of invasion would have called forth its
devoted sons and servants.

These things are greatly to the praise of our countrymen ; and the
following list of subsidies, up to 1801, will prove it was no trifle with
which they contended, when they strained every power to meet the finan-
cial difficulties of the time :

Prussia ... 1794 . . . , . . 1,223,891 10s. 6d.

Sardinia, 1793 to 1796 500,000

Emperor, 1795 and 1796 6,220,000

Ditto .... 1797 . >'.. .... 700,000

Portugal . . 1797 . . . . . . 247,205

Ditto . . . 1798 120,013 13

Russia ... 1799 825,000

Emperor and Elector of Bavaria . . . . . 500,000

6* 65

British Naval Power.

Emperor 1,066,666 13 4

Russia 545,494

Bavaria 501,017 6

Emperor 150,000

12,599,288 2 10

But though England witnessed the power of the republic aggrandized
on the Continent, though the blood she had shed and the money she
had spent were ineffectual on land, she yet retained her ancient su-
premacy at sea. The name of Nelson was a word of dread ; and the
maritime force of France was crushed by that victory which crowned a
series of splendid successes in the Bay of Aboukir, and which, known as
the battle of the Nile, went like a trumpet call throughout Europe. The
despondency of the Continent passed away ; the system of coalition, so
dear to William Pitt, was again called forth ; and Austria, Russia, Tur-
key, and Naples once more joined the victorious island. Loans were
again made. Germany had another million, Russia half that amount,
and other sums passed to other powers. But the exertion was vain, the
loans were fruitless ; and in 1802 that peace, of which it was said
" every man is glad, but no man is proud," was concluded in the treaty
of Amiens.

In the same year the sinking funds were united, to assist in discharging
the debts then existing ; and one per cent, on loans subsequent to 1802
was again appointed, to swell the amount. This fund at its commence-
ment was limited to four millions, but this limitation was repealed ; and
the application of expired annuities, and of saving by the reduction of
interest, was also repealed.

In the latter part of the century, a beneficial change was made in the
provision for the naval expenses. Prior to this period, <4 per man per
month was the allowance to meet the entire cost of the department ;
after this time, the expenses of the navy were supplied, like other charges,
from the loans periodically raised.

Though the discontent of the English people was often roused, yet
the stories which were occasionally circulated, of forced loans in
France, of Parisian banking-houses being surrounded by soldiers,
of money-chests violated, and of moneyed men plundered, had con-
siderable effect in quieting them. It is probable that many of these were
inventions ; some of them were understood to be so ; but when it is
known that entire yearly incomes were often collected, and called in-
come-tax, there are few financial follies of our neighbours which we should
not be inclined to credit.

A curious proposition' to pay off the national debt was very seriously
made in 1798. A profound disquisition upon the evils which arose from
it, and the ruin to which it was leading, was followed by an intricate array
of figures, a close calculation of the population, and an analysis of their
incomes. Somewhat excited by the grave beginning, the public were
not a little disappointed to find that, by deducting one day's provision per
week for a certain time, and allowing compound interest on it, the great
financial difficulty of the day might be overcome. The volume was
privately printed, in quarto, at considerable expense ; but whether it

Removal from 'Change Alley.

emanated from a lunatic asylum, or whether it sent the writer to one,
cannot be ascertained.

It must be evident from the brief record of the war just given, that
business in the funds had increased greatly. Prior to 1801, the market
of 'Change Alley, in the coffee-house where the brokers met, was, as a
public place, open to any who chose to make it his resort. The jobber
who reckoned his transactions by hundreds of thousands was jostled by
the man who was disposed, either morally or materially, to pick pockets ;
while the loans which had increased the national debt to 550 millions,
the exchequer-bills, which were circulated as freely as the government
dared, and the companies, which were augmented in proportion, formed
an amount of business that, in the opinion of the principal persons, de-
manded a building to bear some proportion to the importance of its
transactions. It was resolved, therefore, to choose a plot of ground as
near the Bank as possible, and to meet the required expenses by private
subscription. Whatever errors may be indigenous to the Stock Ex-
change, illiberality can scarcely be classed among them ; and so success-
ful were the proceedings, that, on the 18th of May, 1801, Mr. William
Hammond, chairman of the committee of management, laid the first stone
of the first building erected exclusively for the business of the Stock
Exchange. Beneath the stone the following inscription, engraved on
copper, was placed :

" On the 18th of May, in the year 1801, and forty-one of George III., the first stone
of this building, erected by private subscription, for the transaction of business in the
public funds, was laid in the presence of the proprietors, and under the direction of
William Hammond, William Steer, Thomas Koberts, Griffith Jones, William Grey,
Isaac Hensley, Jo. Brackshaw, John Capel, and John Barnes, managers ; James Pea-
cock, architect. At this era, the first of the Union between Great Britain and Ire-
land, the public funded debt had accumulated in five successive reigns to 552,730,924.
The inviolate faith of the British nation, and the principles of the constitution, sanction
and secure the property embarked in this undertaking. May the blessing of that con-
stitution be secured to the latest posterity ! "

To secure respectability in the members, vote by ballot was adopted,
and ten guineas per annum fixed on as the subscription.

The peace of 1801 was a welcome respite to all save the members of
the Stock Exchange ; where it was said, " There were not commissions
sufficient to pay for summer excursions, nor confidence enough to make
a bankrupt." Great efforts had been made to reduce the price, which
continued to ascend ; although Goldsmid was said to have stood in the
market and sold to any amount at the lowest price- of the time. The
attempt proved vain ; and the endeavour to control public opinion was
paid for by this house to the amount of 180,000.

It was difficult to believe, at first, that war had really ceased. There
was a continued excitement until the treaty was signed ; all places of
public resort were thronged with inquirers ; betting ran high about the
articles ; the chances of exchequer-bills and new lotteries were discussed ;
and when the truce was announced in the city, it was also announced that
the preliminaries of a new loan would be arranged. Talleyrand was
talked of as having employed his information and capacity in gaining
large sums ; foreigners generally were busy in making or marring their

The Loyalty Loan.

fortunes ; and it was ascertained that, in 1803, they held upwards of
eighteen millions of government securities. When it was known that the
preliminaries were signed, the tumultuous joy of the nation is beyond
expression ; and Lloyd's was instantly crowded. The people ran about,
congratulating one another on the happy event ; the different steeples
displayed the union-flag by day, and at night a general illumination
took place ; consols rose from 59 to 66J, and there were twenty-one
defaulters on the next settling day.

The loan, known as the loyalty loan, attracted much attention in the
early part of the century. The period at which it was contracted was a
critical one for the empire. Abroad, Prussia and the princes of the Em-
pire had withdrawn from the confederacy against France ; Austria de-
manded assistance ; Holland was bound by fear to the French republic.
Stagnation of trade, scarcity of specie, want of provisions, and discon-
tent among the people, marked the period at home. The supplies for the
year were difficult to obtain ; an appeal was made to the loyalty of the
nation, and that appeal was answered. Some subscribed in the hope of
gain ; others to curry favor ; and, with all these various interests, eighteen
millions were subscribed in a few days. As an additional inducement, it
was promised that the capital, if claimed, should be repaid within two
years after a definitive treaty of peace. The peace of Amiens came in
1802, and the holders were, therefore, entitled to demand, on the 27th
of March, 1804, 100 sterling for each 100 stock, although the latter
was at a heavy discount. It need hardly be added, that the claim was
made ; and, as money was not sufficiently plentiful, it was arranged that,
for every 100 of the three per cent, loyalty loan, 100 Navy five per
cent, should be given, and for the difference between the money-price of
the latter and 100 sterling, the holder should receive the amount in
three per cents. The whole entailed a heavy loss upon the country, and
this was more to be regretted, because upwards of eight millions of this
loan had been gathered by the Jews, and by two city banking-houses.

A few months evinced the uncertainty of the peace. Jealous and
watchful, both powers stood ready to renew the combat. The First Consul
insulted our ambassadors ; dismantled fortresses ; annexed whole coun-
tries to France ; sent armies against the free citizens of Switzerland ;
demanded the banishment of French emigrants, and the abridgment of
the liberty of the press ; until, unable to subdue their passions, the love
of peace which had once swayed men's minds changed to a fierce desire
for war. In May, 1803, the English ambassador demanded an explana-
tion, and was insolently told that Great Britain was unequal to cope with
France.

During this period great anxiety prevailed throughout London, con-
cerning the completion of a negotiation on which so much depended.
The more thoughtful hoped that the peace of the world would not be
disturbed ; and great was the pleasure, therefore, of these good citizens,
when, on the 5th of May, 1803, in passing the Mansion House, their
attention was arrested by the following letter, conspicuously displayed
in the place usually allotted to important information. It was short, but to
the purpose :

New Frauds on the Stock Exchange.

"Lord Hawkesbury presents his compliments to the Lord Mayor, and has the
honor to acquaint his Lordship, that the negotiation between this country and the
French republic is brought to an amicable conclusion."

The glad tidings soon reached the Stock Exchange, and the funds rose
to seventy on the opening of the market. In a short time, however, sus-
picion was aroused. Men doubted, though they scarcely knew why ; and
the price fluctuated, with a downward tendency. Many of the members,
as they arrived from their residences at the West, where the news ought
to have reached, were utterly ignorant of the intelligence. The faith of
the bulls failed them, and the boldness of the bears increased. It soon
became confidently asserted that the news was fictitious ; and when the
treasury received information of the report and its origin, a letter was
sent by the authorities, terming the important document a scandalous
forgery. Amid a confusion, an uproar, and a noise, at that period un-
precedented, the Lord Mayor communicated in person the contents of
his second letter. Business was immediately suspended ; the guilty and
the guiltless were alike suspected ; and when a price was named, it was
at a reduction of seven per cent. A subscription was entered into to
assist in discovering the parties implicated ; all bargains were declared
void ; and the only important result was in a number of actions at law,
the benefit of the legal profession, and the impunity of the projectors.

The 16th of May was a memorable period for the country and for the
Stock Exchange. The personal insult offered by the French Consul to
the representative of his Majesty ; the evident determination of the same
people to break all ties and truces, rendered an appeal to arms once
more necessary ; and on that day the fierce and fatal war which followed
the truce of Amiens, which desolated the fairest fields of Europe,
which crushed the ambitious man who provoked it, and which added
two hundred and sixty-three millions to the national debt, was pro-
claimed.

In 1806, Joseph Elkin Daniels, a conspicuous character in the Alley,
and known for some time as a dealer in securities, availed himself of the
confidence of the members of the Stock Exchange, to perpetrate a fraud
as novel as it was notable. As a dealer in the funds for time, he was well
known ; and his frequent transactions, combined with the trust which his
character had achieved, gave his broker a confidence in his proceedings
of which he proved utterly unworthy. The time was an important one.
The Continent was struggling against the iron yoke of Bonaparte. Aus-
tria was making that last great struggle with her enemy which ended at
Austerlitz ; rumors were plentiful, and the price of stock varied greatly,
when the man Daniels came to the broker, and desired him to buy omni-
um on account. The price was high, but his request was complied with.
Omnium continued to advance, and Daniels continued to buy, although
the price increased from ten to thirteen premium. When the broker had
completed his orders to the amount of 30,000, he grew anxious for his
money, and applied for payment. Daniels, however, quieted him by
saying, he was so sure the price would rise, that his friends would lend
him on the security of the stock, to enable him to make the most of his
speculation, and that he should, therefore, hold the entire amount. The

Fraud of Daniels.

statement seemed a fair one. Daniels was believed to be honest, and the
broker handed him =30,000 omnium, for which Daniels gave him his
draught on Smith, Payne, & Smith.

The first part of this man's fraudulent scheme was now acted. He
knew the check would not be presented until the afternoon, and that he
was, therefore, free from danger for a few hours. He immediately took
the omnium to other brokers, represented to them an urgent necessity for
money, sold it, and having been paid checks for the amount, immediately
presented them to the bankers on whom they were drawn, and received
the amount in cash. He then went to all whom he knew, or would trust
him, borrowed money on the security of his own checks, a common
practice on the Stock Exchange, with remarkable boldness, remained
in London until near the hour when he knew his own draught would be
presented and refused, and then left, laden alike with gold and a guilty
conscience.

The total amount of fraud was estimated at 50,000. Telegraphic
notices were transmitted to the principal ports of the United Kingdom ;
the Lord Mayor despatched officers in all directions ; the chief sufferers
went express to various places, on the chance of detaining him ; and
every exertion was made to bring to justice the man who had violated
every principle of common honesty, and so greatly shaken the honorable
confidence of the members of the Stock Exchange. Two thousand
seven hundred pounds which he had strangely left at his banker's, were
attached ; two hundred guineas were offered for his apprehension ; his
lodgings were examined, and the property found was seized by the officers
of justice.

The search was too active not to be successful ; and Daniels was dis-
covered in the Isle of Man. Here a new difficulty arose. The Manx
laws protected the culprit, the governor's permission being required to
apprehend him ; and, when procured, so numerously was the island
peopled with men like Daniels, that the officers, afraid of arresting him
in open day, took advantage of night to remove their prisoner. The
proceeds of the robbery were found ; and when his departure was known,
the island rose tumultuously at the violation of a right on which the safety
of half the population depended.

Great excitement was caused by his arrival in England ; but, after a
careful legal consultation, it was decided that he could not be convicted
oh any Criminal charge ; and Joseph Elkin Daniels escaped the legal pen-
alty of that fraud which gave so severe a shock to the members of the
Stock Exchange.

In the same year, it was ascertained that the amount of foreign property
in the British funds was twenty-two millions ; and it is scarcely out of place
to mention, that, by some patient calculator, it was found that one guinea
invested at the Christian era, at five per cent., compound interest, would
have increased to a greater sum than could be contained in five hundred
millions of earths, all of solid gold.

In the early part of the present century an attempt was made to resist
the tax paid to the city, of forty shillings per annum, by stock-brokers, as
unreasonable and unjust. Various members of the body refused to pay ;

Acts against Brokers.

the corporation and the brokers were at issue ; and, in 1805, a hundred
summonses were applied for, though a few only were granted, to test the
disputed right. Among these was one to Francis Baily, who undertook
the championship ; and from the conviction that the claim was unjust, re-
fused in the above year to pay the sum demanded. As the justice,
though not the law, is yet doubted by some, a brief retrospect of the
various acts affecting brokers may not be out of place.

The act of 8 and 9 William III., c. 32, alluded to in an earlier part
of the volume, was the first that could affect stock-brokers, as in that
reign they and their misdeeds began to flourish. The following forms a
portion of the preamble to the act :

" Whereas divers brokers and stock-jobbers have lately set up and car-
ried on most unjust practices, in selling and discounting tallies, bank-
stock, bank-bills, shares and interest on joint stock, and other matters,
and have and do unlawfully combine to raise or fall the value of such se-
curities, for their own private advantage ; and whereas the numbers of such
brokers and stock-brokers are very much increased within these few
years, and do daily multiply, be it enacted, that from and after May,
1697, no person shall act as broker until licensed by the Lord Mayor and
Court of Aldermen of the said city of London.

" That the number of brokers shall not exceed one hundred, and that
the admittance fees shall not exceed 40s.

" That the names of the brokers shall be publicly affixed on the Royal
Exchange, in Guildhall, and other public places in the city.

" That any persons acting as brokers without being admitted as afore-
said, shall forfeit 500, and persons employing them 50 ; and that
any person not being a sworn broker acting as such, shall forfeit 500,
and for every offence stand three times in the pillory.

" That all brokers shall keep a book, to be called the Brokers'-book, to
enter contracts, and in cases of omission, forfeit 50 for every offence.

" That they shall not receive more than ten shillings per cent, for
brokerage. That, if they shall deal in any articles on their own account,
they shall forfeit < 500, and never act as brokers again.

" That no person buying or selling tallies, corn, or any other pro-
vision, or coal, shall be esteemed a broker within the meaning of the act."

In 1707, this, which was for ten years, expired ; and although various
petitions, according to the interest of the petitioner, were presented, it
was not renewed. A new act was then brought in, by which a yearly
tax of forty shillings was levied against all brokers ; and it is doubtful
whether this would have been passed, had not a deficiency been created
by the repeal of one concerning specie.

In 1711, a committee of the House was appointed to consider the
acts relative to brokers ; and a recommendation ensued to revive the act
of 1697. In compliance with this, a bill was brought in, read a first and
second time, but was not passed ; and in the reign of Queen Anne, the
charge for brokerage of 10s. per cent, was reduced to 2s. 9d. It is now
2s. Qd.

In 1746, and in 1756, new bills were brought in, but rejected, which
materially affected stock-jobbers ; and in 1765 it was ordered that a bill

Francis Baily.

be brought in to restrain the ill practices of brokers ; but this, like the
others, was not passed.

The ground of defence occupied by Mr. Baily was somewhat subtle.
In 1806, this gentleman published a pamphlet, called " The Rights of
Stock-jobbers defended," in which he explained his principles of action,
and detailed the course which had been taken. He says : " The right
of the city of London to call upon stock-brokers to be sworn in before
the Court of Aldermen, has long been contested and opposed by that
body. It is resisted by them, in the first instance, under the impression
that they are merely agents, and ought not to be considered as brokers
more than many other persons, who, under the name of tailors, mer-
chants, and tradesmen, act by commission in the purchase and sale of
goods."

With these ideas Mr. Baily contested the right, not, as those who knew
him will readily credit, from narrow views or confined notions, but be-
cause he believed he was supporting a principle founded in justice.
These views, however, he found it impossible to maintain. A case was
produced by the city, in which it was decided that a person buying and
selling stock came within the meaning of the act ; and the efforts of Mr.
Baily proved futile.

For those who feel disposed to investigate the subject, a list of acts
relating to brokers will be found in the Appendix.

In 1807, Lord Henry Petty proposed a new plan for a sinking fund ;
which, however, was only a revival of the principle of borrowing with
one hand and spending with the other ; and, as the ministry which
planned it were not long in office, it was not continued after the first year.

CHAPTER XI.

Unfounded Charge. Joint-Stock Companies. Speculators. Mark Sprot.
Sketch of the House of Baring. Policies on the Life of Bonaparte.
Rumors of his Death. David Ricardo. Forgery of Benjamin Walsh.
Excitement of the Nation. Increase of the National Debt. Sinking Fund.
Unclaimed Dividends. Francis Baily.

ALTHOUGH shares in life assurance companies form part of the pro-
fessed business of the Stock Exchange, yet the better class rarely reach
the hands of the brokers. They are held in such high and deserved es-
timation, that they remain in the possession of families for generations,
passing as heirlooms, with the same confidence in their value as if they
were freehold. As an instance of this, it was noticed in the papers that
the first public sale of the stock of the Royal Exchange Assurance Cor-
poration occurred in 1812.

The charge of employing official information to speculate in the funds
has often been brought against public men. These accusations have

Speculation in Joint- Slock Companies.

often been made with cause, but generally with caution. In August,
1805, however, a letter was received by the head of the government,
signed by Ambrose Charles, a clerk in the employment of the directors
of the Bank of England, in which Lord Moira, a cabinet minister, was
accused of availing himself of his official information to speculate in the
stocks. The name of the broker employed by his Lordship was given ;
and letters which implicated him were said to have been publicly exhib-
ited on 'Change. The underlings of newspapers were declared to be in
communication with the accused nobleman ; and the document concluded
with the offer of proving these assertions, should Lord Grenville require
further information.

The letter was too important to be overlooked ; and the prime minister
gave the required interview to the writer, who, persisting in his assertion,
calmly and confidently declared its truth ; and was proceeding with his
story, when, with a dramatic effect rarely witnessed off the stage, the door
of an adjoining apartment was opened, and the accused confronted his
accuser. There appears to be no other evidence of what passed at this
interview than that given by Ambrose Charles, which, being entirely
favorable to himself, cannot be trusted. No proof was tendered of the
assertion ; but the morning on which the letter had been sent, the writer
remarked to a fellow-clerk, " I have done a deed which will immortalize
me." The subject was made a matter of legal inquiry ; affidavits from
all who had been named as having inculpated his Lordship evinced his
complete innocence, and the entire evidence proved the falsehood and
folly of the criminator. The charge was eventually dismissed as unten-
able ; and the whole affair can only be regarded as one of those morbid
cravings after notoriety which arise equally from a diseased brain and an
idle vanity.

In 1807 and 1808, a general and feverish love of speculation was
abroad. Joint-stock companies were the feature of the day ; canals,
bridges, and life assurance being the great favorites, which, if injurious
to the speculator, were beneficial to the country. To this period London
owes Waterloo and Vauxhall bridges, with many more of those public
works forming to the foreigner objects of so much interest.

It has lately been the custom to speak with contempt of joint-stock
associations, although it is to such bodies that England is indebted for
her greatest and her grandest undertakings. The Bank of England,
which has been called the bank of the world, the railways, which bear
comfort and civilization to the remotest hamlets, the canals, which
convey our commerce and irrigate our lands, our docks, which contain
the wealth of the East and of the West, our life-assurance compa-
nies, which comfort many a desolate hearth and home, are the result
of joint-stock companies. The evil is passing ; but the good is per-
manent.

A similar outcry is always raised against projectors and speculators.
Swift employed his pen in ridiculing them ; Scott introduced one to turn
him into contempt ; Addison employed his fine genius in satirizing them ;
Steele wrote one of his best essays on them. The smaller herd of wits
have swelled the cry ; and they to whom mankind are preeminently indebt-
7 73

Mark Sprot.

ed are named with contempt, and treated with derision. The projectors of
all great works have been disdainfully regarded at one period or another.
The men who first planned our bridges have been neglected ; the pro-
moters of railways, which are now paying well, and rejoicing our rural
homesteads with the polish and the luxury of cities, were a by-word to
the mass. And yet the finest minds of the day are employed in project-
ing. The discoverer of steam-power was a projector ; Arkwright was
only a projector ; Thomas Gray was the same. What does not England
owe to men who bore the burden and the heat of the day in the intro-
duction of projects, which, once household luxuries, they have made
household necessities ! The cottage of the poor is comforted, the man-
sion of the rich is gladdened, with works for which projectors were rid-
iculed and speculators ruined. We cannot cast our eyes around without
these works meeting our view. They add a grace to our persons, they
cheapen our luxuries, they adorn our homes.

The mere man of routine thinks it a sacred duty to laugh at those of
whose services he is glad to avail himself ; while the banker, the mer-
chant, and the moneyed tradesman first treat him as an intruder, and
then buy shares in the discovery they disdainfully rejected. The world
is rich in the names of those who have benefited and been neglected by
their fellow-men.

One of the greatest capitalists of the reign of George III. died in 1808.
Mark Sprot, a name which will recall many a pleasant anecdote to mem-
bers of the Stock Exchange, born a younger brother, with a younger
brother's portion, achieved, by his own exertions, one of those fortunes
which arose out of the loans of the French war. In 1780 he settled in
London, with moderate means ; and, from occasional visits to the Bank
and Stock Exchange, formed an intimacy with the members of the
moneyed interest. He soon saw that, with small risk, he might make
great gain, and commenced a career which ended in splendid success.
In 1799, he was one of the contractors for the lottery ; and, in 1800 and
the three following years, he was at the head of those who bid for the
loans.

During the trial of Lord Melville, Mark Sprot was examined, in conse-
quence of having borrowed money from Mr. Trotter. The latter, on a
comparatively trifling income, had built a splendid mansion ; and as at-
tention had been drawn to the circumstance, Mr. Sprot's name was in-
volved. When examined by the committee, and asked whether he did
not act as banker to members of both Houses, " I never do business
with privileged persons," was the shrewd, but daring reply. This answer
originated, probably, from the following anecdote.

On one occasion a broker applied to Mr. Sprot, and with great sorrow
told him that he was a ruined man. Mr. Sprot was surprised, for he
knew the speaker was careful, industrious, and not likely to speculate.
He asked the cause, and the broker replied, that he had been employed
largely by a principal, who, the prices having gone against him, had re-
fused to pay his losses. Mr. Sprot immediately inquired his name ; and
on being told it was a noble earl, of whose resources he was well aware,
could scarcely believe he heard correctly.

The House of Baring.

He knew him to be in possession of large landed estates ; and, when
informed that his Lordship had refused to give any reason except that it
was not convenient, Mr. Sprot told his visitor not to be alarmed, that he
would not press his claim, and concluded by making an engagement with
him to visit his Lordship.

Together they went, and were received with patrician dignity. Mr.
Sprot deliberately detailed his business, and received the cool reply, that
it was not convenient to pay. But the energetic jobber was not a man to
bow before rank, unless accompanied by worth ; and Mr. Sprot unhesi-
tatingly declared, that, if the account were not settled by a certain hour
next day, he would post his Lordship as a defaulter. The latter grew
alarmed, and attempted to conciliate ; but the conference closed with the
repeated determination of Mr. Sprot to post him. Long before the hour
appointed, however, his Lordship's solicitor waited on the broker to ar-
range the payment ; and thus the honor of the earl was preserved, and
the credit of the broker saved in the money-market, through the acuteness
and determination of Mark Sprot.

In 1810, an application was made to Parliament for permission to erect
and secure to the public the right of admission to an open market for the
sale and purchase of national securities, on the ground that the public
ought not to be excluded from the room in which business in the public
funds is contracted. The bill was introduced by Sir William Curtis, and
rejected by the senate.

The history of the house of Baring which, though generally re-
garded as mercantile, is largely connected with the loans has been
termed an evidence of the power of a few active young men to advance
themselves to immense fortune, and to distinguished marks of favor from
the sovereign. Various origins are attributed to the members of the
firm, and the Herald's College has been employed to give the dignity of
ancestral honors to the family. In 1793, the first baronet of the name
was created, and the signal services of Sir Francis to the East India
Company, of which he was a director, were greatly appreciated.

It has been stated, but as the writer is uncertain of his authority, he
gives it with caution, that they were originally German weavers, who
came over to London, and, being successful in business, were, through the
interest of William Bingham, of Philadelphia, appointed agents to the
American government. Considering, therefore, the large resources at
their command, it is not surprising that, during the loyalty loan in 1797,
the head of the house made one hundred thousand pounds for three con-
secutive days ; or that, in 1806, it was sarcastically said, " Sir Francis
Baring is extending his purchases so largely in Hampshire, that he soon
expects to be able to inclose the country with his own park paling."

In 1805 this gentleman, the first algebraist of the day, retired from
business with a princely fortune, and shortly afterwards died, full of years
and honors. A green old age, a career closed at the pinnacle of pros-
perity, and a death-bed surrounded by sons and daughters, whom the
descendant of the German weaver had lived to place in splendid inde-
pendence, was his enviable lot. The great commercial house which he
had raised to so proud a position was continued by his sons, and may be

Policies on the Life of Bonaparte.

considered the most important mercantile establishment in the empire.
Freehold estates to the amount of half a million, besides enormous per-
sonal property, rewarded his great capacity, and his yet greater integrity.

The house of Baring, notwithstanding some periods when doubt and
almost dismay hung over it, yet retains the power and position bequeathed
by Sir Francis ; and, as an instance of the fortune and capacity of its
members, it may be mentioned that the late Lord Ashburton, when bear-
ing, as Sir Robert Peel feelingly expressed it, the honored name of Alex-
ander Baring, realized 170,000 in two years by his combinations in
French Rentes.

From 1810 to 1815, the business in every department of the Stock
Exchange increased greatly. Loan after loan came rapidly forward,
was as rapidly taken, went to a premium, was merged in the funded
debt, and was succeeded by fresh demands for fresh loans. The public
feeling was so strong, even during those fearful campaigns which pre-
ceded the fatal field of Austerlitz, when the futile threat of invasion was
frequent, and " the army of England " assembled at Boulogne, that no
ministry could have maintained .its power unless it had been a war min-
istry. And when the event of that battle, known as the " battle of the
three emperors," was made public, when the entire powers of the Con-
tinent were at the feet of Napoleon, and William Pitt, the soul of the
coalition, died from fear of the calamities that threatened, the people of
England were unchanged in their resolute defiance. Enmity towards
the French was an article of faith. Hatred to their leader was taken
from the mother's breast, and nourished by the stories which day by day
engrossed the public mind, or violated public feeling. At one time, the
commercial world was excited with the story that all the specie in all the
private banks of France had been seized. At another, some cruelty
which outraged humanity passed current with the vulgar. Stories of the
conscription harrowed the feelings of parents ; tales of insurrection, sup-
pressed with heartless cruelty, raised the indignation of the child. The
evening fireside derived its great attraction from the talk about Bona-
parte ; and it is no exaggeration to say, that nurses stilled their querulous
charges, or that mothers hushed their children, with that dreaded name.
Policies were opened on his life ; and so uncertain was it considered in
1804, that fifty-five guineas per cent, were paid to insure it for one year.
No fiction was more favorite or more frequent than that which detailed
his death ; and in this the powerful invention of the romancer was often
proved. Poison and steel, the dagger of the conspirator and the bullet
of the republican, were constantly asserted to have ended his career.
On one occasion, it was universally credited that the great Corsican was
no more. A despatch had been received by Lord Grenville announcing
his death, and circumstantially detailing its manner. No doubt was en-
tertained ; the funds rose, and the news spread. Some very loyal per-
sons set the bells ringing in a suburban village, and the whole affair bore
the aspect of truth. The story circulated wore an appearance of romance
entirely in keeping with the career of the man whose death was an-
nounced. It was stated that Napoleon, having called a council of war, to
which he had invited one of the wild chiefs of the desert, who professed

Career of Ricardo. .

attachment till he could procure revenge, had been shot by him in open
council ; and, on the signal thus given, the wild hordes of the desert had
slain Bonaparte and his devoted followers in the land so recklessly in-
vaded. News was not then so frequent, information was not so widely
diffused ; and the document was credited much longer than it would have
been a quarter of a century later. It deserves to be mentioned as a
curiosity, that the forgery was not attributed to members of the Stock
Exchange, but to a pair of " state speculators," assisted by u members
of the lower House." But though it was not caused by them, they felt its
effect in the fluctuating price, and several were ruined by the ingenious
device of these " state speculators " and " members of the lower House."

Among the names conspicuous in the city for character and capacity,
stands that of the great political economist, David Ricardo, who, at the
early age of fourteen, was introduced by his father, a Hebrew of the
Hebrews, to the mysteries of the Stock Exchange. The mind of the
younger Ricardo was of an inquiring character. He began to study the
principles of the creed in which he had been educated. The result was
his secession from the faith of the ancient people, and his abandonment to
his own resources by his father. Those resources were small ; but his
conduct and character had interested the members of Capel Court, and, to
their honor, with a liberality which not unfrequently distinguishes them,
the oldest and most influential came to his assistance. The extraordinary
powers of Mr. Ricardo were soon developed in the acquisition of a con-
siderable fortune ; and, having hitherto employed but little time in study,
he amply and nobly redeemed his lost hours. At twenty-five he com-
menced mathematics, and with great application studied chemistry and
mineralogy, fitted up a laboratory, formed a collection of minerals, and
bestirred himself with all the energy of his character. These sciences,
however, he soon abandoned , and, having accidentally become acquaint-
ed with Adam Smith's " Wealth of Nations," he employed his great
thought upon the subject of political economy, in which he soon became
distinguished. He led the van in the bullion controversy ; his principles
were those on which the present bank charter is founded; and, in 1817,
he published that great work on his favorite science so familiar to the
commercial reader.

His reputation preceded him to the senate ; and his opinions on the
above subjects were deferred to with respect. When Mr. Peel's bill was
introduced, in 1819, his name was called for from all sides of the House ;
and, in 1823, David Ricardo, an acute, patient, and comprehensive
thinker, a firm and faithful friend, and an honor to the body of which he
was a member, died, at the early age of fifty-two.

Few trials, which were not for life, have excited so much interest in
the city, as that in which Benjamin Walsh a member of the senate, a
member of the Stock Exchange, and a confessed felon stood at the
bar of the Old Bailey, on the charge of defrauding Sir Thomas Plomer.
The bench was crowded with the rank and respectability of the city. The
melancholy appearance of the prisoner, his grave bearing, and dejected
countenance, excited the interest of the spectators, and spoke the regret
of the culprit.

7* 77

Vansittarfs Sinking Fund.

In 1811, Sir Thomas informed his broker, Mr. Benjamin Walsh, M. P.,
that, having bought an estate, it would be necessary to sell out a large
amount of stock to complete the purchase. Mr. Walsh advised Sir
Thomas not to sell directly, as there was every prospect of the funds
rising ; and, the title of the estate not being complete, this advice was
complied with. About the middle of November, however, Mr. Walsh
changed his opinion, and repeatedly urged Sir Thomas to sell his stock,
alleging his belief that the price would fall. Again the broker's sug-
gestion was complied with ; but, as it was sold before the money was
required for the estate, it was recommended by the prisoner that, to pre-
vent it from lying idle, exchequer-bills should be purchased with the pro-
ceeds. Sir Thomas again consented, and gave a check amounting to
c22,000 to Mr. Walsh, who promised to lodge the notes at Goslings',
the bankers to Sir Thomas, and hand the latter their receipt. In the
evening, however, he presented their acknowledgment for only 6,000,
and making some excuse for not having paid in the remaining exchequer-
bills, promised to deliver them on the following day ; adding that, as he
had not settled for them, he had repaid the difference to the account of
Sir Thomas. The latter, on his way home, called at his bankers', and
found that, though the 6,000 in exchequer-bills had been deposited, the
check of Mr. Walsh for the 16,000 had been received too late for
presentation. No suspicion was, however, attached to the transaction
until next day, when the check was refused payment. Sir Thomas was
immediately informed, and an inquiry instituted. It was soon found that
the money thus iniquitously gained, had been disposed of in paying his
brother 1,000, in purchasing 11,000 American stock, and in invest-
ing 500 in Portuguese doubloons. The prisoner was found guilty ;
but certain points, reserved for the judges, being interpreted favorably,
he was discharged from Newgate, and expelled from, the House of
Commons.

In 1813, Mr. Vansittart introduced a modification of Mr. Pitt's sinking
fund ; and, among other objects, proposed to rescind the alterations of
1786 and 1792, and to restore them to the position in which they would
have stood if no such alteration had taken place. By this Mr. Vansittart
designed to provide that relief which the public would have obtained from
the original plan, to restrain the excessive increase of the sinking fund^
and to secure the redemption of each loan within a period of forty-five
years from its commencement. For these purposes it was proposed,

1st. That, as a sum equal to the debt of 1786, bearing an interest
nearly equal to the interest of that debt, is now vested in the hands of
the commissioners, so soon as the interest of the redeemed debt shall be
equal to that of the debt of 1786, that debt shall be declared discharged ;
and the sums hitherto appropriated for the interest and sinking fund shall
be appropriated to bear the charge of future wars ; and that no new taxes
shall be imposed for new loans till the same' amount to a sum equal to
the interest of that released.

2d. That, as loans to the extent of .86,796,375 were charged on the
consolidated fund in 1802, without any sinking fund attached to them, it
is proposed, in order to place the public creditors in a position equal to

Fluctuations of the Funds in 1815.

that they held in 1792, that the one per cent, sinking fund on the above
sums be replaced to it.

3d. That, as the amount of exchequer-bills has much increased, a
sinking fund of one per cent, shall be annually provided for any addition
to the exchequer-bills in circulation, for the discharge of which no funds
are provided.

4th. That, instead of allotting the sinking fund of one per cent, to dis-
charge each separate loan, the whole funds shall be united, and applied
to discharge the first contracted loan ; and that each successive loan shall
be redeemed, and its charge released, in the order of its contraction, by
the united produce of the sinking funds appropriated for the redemption
of the loans contracted since 1792 ; but the whole sinking fund created
by the act of 1786 to be continued, and applied until the total redemption
of the debt.

During the latter part of Bonaparte's career, the price of the funds
varied enormously. In the course of an hour, a difference of eight and
ten per cent, was not unknown. The loans were as eagerly sought as
they were frequently made ; nor is this surprising, when it is remem-
bered that eighteen and twenty per cent, occasionally rewarded the scrip-
holder.

The pulse of the people was feverish, and easily excited ; and the
papers of the day display the intense anxiety which hung over the public
mind during the eventful years of 1814 and 1815. The prices of the
funds dropped and rose like a barometer. It is scarcely an exaggeration
to say, that they were regarded as an oracle ; and, while the public pro-
fessed to disbelieve all Stock Exchange rumors, simply because they were
so, they continued to inquire the variations in the price, and almost re-
garded them as a cause rather than a consequence. The annals of the
world contain no more exciting period. For years, the English had seen
battle after battle won by the great conqueror. They had seen disciplined
armies vanquished by raw levies ; veteran troops cut to pieces by young
conscripts ; and the prestige of his name had haunted them for the fourth
part of a century. To destroy his power, they had submitted to painful
privations ; they had borne with taxation which almost amounted to
tyranny ; they had levied loans which enriched the few and impoverished
the many.

The national debt had increased to 800 millions ; and now the reward
had come, and the people read with undisguised and unlimited pleasure,
of field after field yielding to British prowess ; of towns stormed ; of
achievements which made them proud of the name they bore ; until that
prophecy, which had been derided for years, became a lasting fact ;
British troops paraded in triumph through the streets of Paris ; and men
felt that their sufferings and their sorrows had not been vain, but that the
treasure they had lavished had reaped its reward.

So important to our financial department was the close of this war,
that the decrease of the expenditure was at once declared to be two
millions per month; and, accustomed as. the money power of England
had been to loan succeeding loan, the Stock Exchange could scarcely
understand the declaration of the Chancellor, that he neither intended to

First French Loan in 1815.

ask for money, nor to touch the sinking fund. The immediate effect of
the battle of Waterloo on the funds was only three per cent., nor was it
until the capture of Napoleon became positively known, that they rose to
their previous price.

It is not unworthy of remark, that, from 1688 to 1814, sixty- three
years witnessed bloody and expensive wars, while only sixty-one years
were employed in recovering from the effects of so demoralizing a
system.

The well-known attempt to defraud the Stock Exchange occurred in
1814 ; but the features of the hoax were so like that of 1806, and its
effects so similar on the members, that a brief notice is deemed sufficient.
Prior to February, 1814, various brokers were employed by persons,
some of whom were not accustomed to speculate in Capel Court, to pur-
chase government securities to the amount of 826,000. Among other
and less important individuals, were Lord Cochrane and Mr. Cochrane John-
stone, M. P., who, when information arrived that some French officers had
landed at Dover, with the news of Bonaparte's death, took advantage of
the consequent rise, to sell the stock they had previously purchased. In
a short time, however, it was discovered that the " French officers " were
fictitious, and that the news was false. Every endeavour was made to
discover the inventors of the plot ; suspicion was pointed at persons who
had bought so largely and sold so well ; and Lord Cochrane, Mr. John-
stone, M. P., with several more, were tried for conspiracy, and found
guilty. The committee of the Stock Exchange did not, as in the previous
case, cancel the bargains made, but left the parties to the remedy which
the law provided. Mr. Johnstone fled from the country, and Lord Coch-
rane was dismissed from the navy. But public opinion has reversed the
decree, and reinstated his Lordship in that service of which he was the
pride and the ornament.

In consequence of the above fraud, it became necessary to serve cer-
tain law processes on many of the members ; and an attorney's clerk,
ignorant of the custom of the Stock Exchange, or confident in the sanc-
tity of his mission, ventured boldly in. The solemn character of the law
was no defence, and scarcely was his errand known, when he felt as
willing to retire as he had been anxious to enter. The disgraceful mode
in which a stranger is usually treated by the jobbers and brokers was
carried out in its fullest extent, and it was not until he had received his
initiation into the manners of the members that he was allowed to leave
the mart dedicated to Mammon.

In 1815, the first French loan was negotiated in London. The fall of
Napoleon, the return of Louis le Gros, the personal expenses of the
monarch, and the pecuniary concessions of the government, demanded a
supply to which French capitalists were unequal ; and a successful at-
tempt was made to borrow in the English market.

In the following year an act was passed, authorizing the transfer of
stock upon which no dividend had been claimed for ten years, to the
commissioners for the reduction of the national debt.

It has been the writer's duty in another work to advocate the cause of
the holders of unclaimed dividends. The unfairness with which they are

Francis BaiJy.

treated is neither to be palliated nor justified. The eagerness and
anxiety of government to obtain money is too often gratified at the ex-
pense of morality ; and it is thus with the unclaimed dividends. Every
difficulty is thrown in the way of the public ; and, though the above act
distinctly ordains that, immediately after the transfer, the names, resi-
dences, descriptions, and amount shall be kept open for inspection at the
Bank, it is useless for the public to apply, as they are politely, but per-
emptorily, refused all information. It is only fair to conclude that this
is at the instance of government, as the Bank receive no benefit from their
violation of the act of Parliament.

It is not often that the repudiation of a dividend causes a rise in the
price of the stock ; such, however, was the case in a loan of five millions
to Austria, the interest of which was to be remitted by the Emperor.
Shortly before it became due, intelligence arrived that Austria was unable
to meet the claim. The stock at once rose 'two per cent., as it was
known that the faith of England was pledged to the fundholder, and that
henceforth the interest must be provided by the English government.

A laudable endeavour was made in 1821 to abolish the system of
gambling known as options ; and, after a serious consideration, the com-
mittee of the Stock Exchange resolved, that any member guilty of the
practice should be expelled the house. It was soon found that rules are
more easily made than followed ; and a powerful opposition was organ-
ized, in which the Hebrew party took the lead. Large sums were sub-
scribed towards the erection of a new building ; and the schism grew so
serious, and numbered such important parties in its ranks, that the com-
mittee deemed it wise to make an amicable arrangement, and abandon
the resolution they had so hastily made.

Up to 1822, the Royal Exchange was the theatre in which business in
the foreign funds was transacted. When, however, this business became
a feature of sufficient importance, a foreign Stock Exchange was formed
in connection with Capel Court.

A very important question became mooted concerning these loans.
On several occasions, when bargains for time were made, and the loser
refused to pay his differences, the broker made them good, believing his
principal was not liable under the act of Sir John Barnard. At last the
question was legally argued ; and it was ascertained from the decision of
several judges, that the provisions of the above act did not extend to loans
for foreign countries.

Francis Baily a name as well known in the scientific as in the mone-
tary world retired from the Stock Exchange in 1825, and the man who,
in the midst of the most exciting pursuit in the world, was worthily chosen
president of the Royal Astronomical Society, sheds an honor on the class
to which he belonged, and should have been an exemplar to the men with
whom he associated.

As a boy, studious beyond his years, he was called half jestingly,
half seriously the philosopher of Newbury ; and, having left school at
fourteen, remained in a mercantile situation until he was twenty-two,
when, for the mere love of adventure, he embarked for the New World,
travelled through a great part of the far West, and passed eleven months

Review of the National Debt.

among the aborigines, without once meeting the shelter of a civilized
roof.

In 1800, he went on the money market, where he soon became con-
spicuous, publishing, within a few years, many works which were justly
regarded with great favor ; and, in 1806, defended, though unsuccessfully,
the rights of the brokers. In 1814, he drew up the report of the com-
mittee on the great fraud of that year, arranged the evidence against the
perpetrators completely and conclusively, and was one of those men of
whom the Stock Exchange from which he retired with a fortune won
by uprightness and intelligence was not worthy.

The triumphs of Mr. Baily in his favorite pursuit are recorded in the
minds of all who prize the science which he so dearly loved. A list of
his labors would be misplaced in the present volume ; but Sir John Her-
schel has recorded them hi his memoir of the scientific member of that
place which is too much open to the reproach, that it narrows men's
minds as much as it enlarges their purses.

CHAPTER XII.

Review of the National Debt. Opinions. Bolingbroke. Financial Reform
Association. Extravagance of Government. Schemes for paying off the
National Debt. Review of them. Proposals for Debentures.

THE period at which the present narrative has arrived does not appear
ill adapted for a prospective and retrospective glance at a debt which, in
121 years, has increased from ,660,000 to 800,000,000, which is the
great problem of the day, and the great difficulty of legislators. It has
been seen that the debt was not increased without strenuous opposition ;
and it need not be said that there were alarmists a century ago, as there
are alarmists now ; that, as each successive million was added, men were
not wanting to declare the ruin of the country ; or that prophets were
plentiful with omens of evil. Bolingbroke wrote, " It is impossible to
look back without grief on the necessary and unavoidable consequences of
this establishment, or without indignation on that mystery and iniquity
which hath been raised upon it, and carried on by means of it. Who can
answer that a scheme which oppresses the farmer, ruins the manufacturer,
breaks the merchant, discourages industry, and reduces fraud to a sys-
tem, which drains continually a portion of our national wealth away to
foreigners, and draws most perniciously the rest of that immense property
which was diffused among thousands into the pockets of the few, who
can answer that such a scheme will always endure ? The whole art of
stock-jobbing, the whole mystery of iniquity mentioned above, rises from
this establishment, and is employed about the funds ; and the main-springs
which turn, or may turn, the artificial wheel of credit, and make the

Mr. Alison's Views.

paper estates that are fastened to it rise or fall, lurk behind the veil of
the treasury. That luxury which began to spread after the restoration of
Charles II. hath increased ever since, from the growth of wealth among
the stock-jobbers, from this system. Nothing can be more certain than
this, that national luxury and national poverty may in time establish
national prostitution. The immense wealth of particular men is a cir-
cumstance which always attends national poverty, and is, in a great
measure, the cause of it. We may already apply to our country what
Sallust makes Cato say of Rome, ' Public want and private wealth
abound in all declining states.' '

A reference to the tracts, pamphlets, and broadsides, which were given
to the world in the early part of the century, will prove that public at-
tention was constantly drawn to the growing difficulty ; but the writers
committed the great error of pointing their darts at the stock-jobbers.
They persisted in regarding the consequence as the cause ; nor was it,
Mr. Alison thinks, until after the peace of Ryswick, that the great evil
was regarded with any thing like alarm. This gentleman, in his " Mil-
itary Life of Marlborough," draws the following vivid picture, and the
writer can confirm it from a careful perusal of contemporary docu-
ments :

" The finances of Great Britain," he says, " as they were managed in
former times, could never have sustained the cost of such a war for a
tenth part of the time. But expense now seemed no obstacle to the gov-
ernment. A new engine of surpassing strength had been discovered for
extracting capital out of the country ; and the able statesmen who had it
in their hands felt it to be not less serviceable in consolidating the inter-
nal power, than in meeting the external expenses of the new dynasty.

" When this system first began, the nation was not sensible of the im-
portant consequences to which it would lead. They thought it could only
be a temporary expedient ; and that, though it might, perhaps, lead to a
few millions being added to the national debt, yet that would be all.
Though from the first, accordingly, its progress was viewed with a jealous
eye by the thinking few, it made but little impression upon the unthinking
many, before the peace of Ryswick. But when the War of the Succession
began, in 1702, and continued without intermission, attended by daily and
increasing expenditure, for ten years, the apprehensions of a large part
of the nation became excessive. At the Revolution the national debt
was .661,000; by 1710 it exceeded ,50,000,000.

" The wars in which William was of necessity engaged, the loans
which they rendered unavoidable, and which the commercial wealth of
the nation enabled it to advance, and the great increase in the expendi-
ture of the Exchequer, all conspired to place a vast and unprecedented
amount of patronage in the hands of government. This was systemati-
cally directed to buy off opposition in Parliament, and secure a majority
in the constituencies. Corruption, in every possible form, from the high-
est to the lowest, was employed in all parts of Great Britain, especially
among the urban electors, and with such success, that almost every meas-
ure of government passed without difficulty through both Houses of Par-
liament. The nation had shaken off" the prerogatives of the crown, but

Adam Smith.

they had fallen under the domination of its influence. The gold of the
Exchequer was found to be more powerful than the penalties of the Star-
Chamber."

Almost every one professes to consider the debt as a drain upon the
resources of the nation ; as a nightmare upon the chests of the people ;
and as a millstone which will sink England below her proper position.
Most of our political writers affect this view. All our alarmists make it
their theme. Hume wrote, " Either the nation must destroy public
credit, or public credit must destroy the nation." Sir Robert Walpole
said, " When the debt reaches 100 millions, the nation will be bank-
rupt." In 1735, Lord Hervey, in his memoir of George II., remarked,
" I do not see how it would be possible for the country, on any exi-
gence, or for the support of the most necessary war, to raise one million
a year more than it now raises "; and in 1777 the third earl wrote as a
note, " What would my father have said had he seen seventeen mil-
lions raised in a year ? " Lord Bolingbroke declared the debt was sink-
ing England into the gulf of inevitable bankruptcy. Cobbett was per-
fectly rabid in his attacks on those whom he invariably classed as Jews
and fundholders, predicted the ruin of England in "half a century, and
proposed, in 1832, a plan which would have ceased the interest on the
national debt in twenty-seven years, and have classed England among
the repudiators.

Adam Smith thought that the practice of funding had gradually weak-
ened every state which had adopted it. Paine openly predicted the Bank
and the government would perish together in a few months. Mr. Tier-
ney said, in 1817, such a state of things could not go on. Sir James
Graham proposed, in 1827, a reduction of thirty per cent. Mr. Baines
thought it might be ultimately necessary to make a general contribution
to extinguish a large portion of the debt ; and the late Earl Grey talked
in early life of " taking the bull by the horns " ; although he failed to
fulfil in his age the promise of his youth.

If prophecies such as these have been plentiful, the following extract,
at once a picture and illustration of the period when the nation first com-
menced to borrow, will prove that other views are entertained by many,
and that there is a large class who, however they may deprecate the great
evils arising from the debt, consider that it has been beneficial to the in-
terests of England.

" The era of the Revolution is chiefly remarkable for the new dynasty
having taught the government how to raise taxes in the country, and thus
brought England to take the place to which she was entitled in the scale
of nations, by bringing the vast national resources to bear upon the na-
tional struggles. That which the Stuarts never could effect by appeal to
honor, spirit, or patriotism, William and Anne soon accomplished by
bringing into play, and enlisting on their side, different and less credit-
able motives. They no longer bullied the House of Commons, they
bribed it ; and, strange to say, it is to the entire success of the gigantic
system of borrowing, expending, and corrupting, which they introduced,
and which their successors so faithfully followed, that the subsequent
greatness of England is mainly to be ascribed. It was the system of

Annuities.

managing the House of Commons by loans, good places, and bribes,
which provided the sinews of war, and prepared the triumphs of Blenheim
and Ramillies. William tripled the revenue, and gave so much of it to
the House of Commons that they cordially agreed to the tripling. He
spent largely ; he corrupted still more largely ; he made the national
interest in support of taxation more powerful than those operating to re-
sist it. The memoirs recently come out give details of corruption so
barefaced and gross, that they would exceed belief if their frequency,
and the testimony to their authenticity from different quarters, did not
defy disbelief."

It is now known, that when Walpole's ministerial supporters were in-
vited to his ministerial dinner, each found a .500 note under his napkin.

It is one great evil of the present age, that it persists in regarding the
debt as perpetual. Immediately the expenditure is exceeded by the rev-
enue, there is a demand for the reduction of taxation. We, a commer-
cial people, brought up at the feet of McCulloch, with the books of the
national debt as a constant study, with the interest on the national debt
as a constant remembrancer, persist in scoffing at any idea of decreasing
the encumbrance ; and when a Chancellor of the Exchequer proposes a
loan of eight millions, we growl and grumble, call it charitable, trust for
better times, and read the opposition papers with renewed zest.

There is no doubt that the resources of the nation are equal to far more
than is now imposed ; but it can only be done by an efficient revision of
our taxation ; and this will never be effected till the wolf is at the door.
A war which greatly increased our yearly imposts would, with the pres-
ent system, crush the artisan, paralyze the middle class, and scarcely
leave the landed proprietor unscathed. The convertibility of the note of
the Bank of England would cease ; and it would be impossible to pre-
serve the charter of Sir Robert Peel in its entirety, while twenty-eight
millions were claimable yearly in specie, and the gold of the country
went abroad in subsidies.

In an earlier portion of the volume, the writer briefly advocated annui-
ties as one mode of treating the national debt. There would in this be
no breach of faith to the present public ; there would be no dread of a
general bankruptcy ; there would be no need of loans ; and, had this
principle been carried out, the national debt would be yearly diminishing.
In ten years nearly two millions of terminable annuities will expire ;
and it behoves the government to inquire into the effect which the conver-
sion of the interminable debt into terminable annuities would have on the
money market.

It is absolutely idle for the Financial Reform Association to think of
effectually lowering the taxation of the country while twenty-eight mil-
lions are paid for interest ; and it is to be feared that great evil will ac-
company whatever good they may achieve. That there are many offices
which might be abolished ; that it is a rule in England that the least
worked should be best paid ; that an extravagant system of barbaric
grandeur exists ; that the army and the navy, the pulpit and the bar, are
conducted unwisely ; and that great men are paid great salaries for doing
nothing, are indisputable ; but it is equally so, that great savings have
8 85

Plans to reduce the Debt.

been effected, and that great efforts are making to economize further.
There is a faith pledged to the public servant as much as to the public
creditor ; and, whether he be a colonel or a clerk, a man of peace or a man
of war, it is impracticable, imprudent, and unjust to attempt that which
would as much break faith with him, as to cease to pay the dividends on
the national debt would be to break faith with the national creditor.

These things are paltry and puerile compared with that which, except-
ing a total revision of taxation, can alone materially meet the difficulties
of England ; and the gentlemen of the Reform Association are aware of
this. They may cut down salaries ; lower the defences of the country ;
abolish expensive forms and ceremonies ; amalgamate a few boards of
direction ; reduce the civil list ; and do away with all sinecures. But
the evil is too vast, and the difficulties are too gigantic, to be met in so
simple a manner. Nor will these gentlemen be satisfied with it while
there are 800 millions at which to level their Quixotic spear. Repudi-
ation was darkly alluded to at one meeting of the Association ; and,
though it has since been denied, it is to be feared that time only is re-
quired to ripen the attempt.

Mr. Henley, a few months ago, brought forward a motion to deduct
ten per cent, from all official salaries, and the motion was deservedly
negatived. But such motions, when meant to meet a great difficulty, are
too contemptible to notice ; and would only pauperize the feelings of
those who are already almost pauperized in purse. Let Mi*. Henley
think of the salaries paid at the Custom-House, the Post-Office, and
Somerset House, before he again introduces a proposal on a principle so
broad that it is unworthy a statesman, and insulting to an educated, an
intelligent, and a trustworthy class.

To reduce or pay off the national debt may be gigantic, but it is not
impossible ; and the writer closes the present chapter with a review of
some of the proposals which have been laid before the public.

In 1715, a pamphlet was published, entitled, "A Method that will
enable the Government to pay off that Part of the Public Debt which is
redeemable by Parliament," by which twenty-one millions were to be paid
in seventeen years, by bills of credit without interest. Soon after the
accession of the present royal family, Mr. Archibald Hutcheson pre-
sented a plan which excited much attention at the time, and is well en-
titled to recapitulation ; and his principal propositions were,

1. That the sums severally assessed on the lands of Great Britain for
the land-tax of 1713 be made payable as a rent-charge in fee for ever,
out of the several respective lands, redeemable at any time by the pro-
prietors paying twenty-two years' purchase.

2. That the said rents, or the money raised by redemption or assign-
ments of the same, be applied to the discharge of the public debt.

3. That one tenth part of all annuities for life, and all other rents
issuing out of the aforesaid lands, and of all sums 6f money secured by
mortgage, and of all other debts which affect lands, be entirely remitted
to their respective proprietors.

4. That the proprietors of such land be empowered to sell so much of
them as shall be sufficient to redeem the aforesaid respective rent-charges.

Stephen Earlier.

5. That one tenth part of all the debts secured by public funds be
remitted.

6. That one tenth part of all the other net personal estates of all the
inhabitants of Great Britain, which affect land and public funds, be applied
to the payment of the public debt.

7. That 2s. in 'the pound be made payable yearly out of the salaries
and perquisites of all offices and places.

8. That the legal interest be reduced to four per cent, per annum.

9. That, for the effectual securing of the payment of such public
debts, for which there either is at present no provision, or the provision
made by Parliament appears deficient, all funds granted for any term of
years be made perpetual, until the principal and interest of all the said
public debts be fully paid off ; and that the interest of such public debts
as at present have defective or no securities be paid out of the yearly
produce of the said funds ; and that the remainder only of such produce,
over and above the interest of the said public debts, be applied towards
the sinking of the principal money.

10. That provisions may be made by an excise on apparel, or some
other excise, sufficient to produce one million per annum in lieu of the
land-tax, till all the public debts are discharged.

In 1715, Mr. Asgill published his plan for the more speedy redemption
of all the perpetual funds ; two millions were to be raised in specie, and
deposited in a bank, to support the circulation of twenty millions of ex-
chequer-bills at three per cent., with which all the redeemable debts were
to be paid off. As an annual interest of .1,182,454 10s. 5d. was then
paid for these redeemable debts, and as the interest of the two millions to
be borrowed at six per cent., and of twenty millions of exchequer-bills at
three per cent., amounted only to ,720,000, the public would thus have
acquired a sinking fund of < 462,454 10s. 5d.

In 1719, Stephen Barbier proposed to pay the public debt. The plan
of this gentleman was to convert forty millions of the debt into notes,
bearing one per cent, less interest than the original fund, which was thus
to be converted ; the conversion was only to take place at the request of
the creditor, who might thus at any time obtain both principal and in-
terest. These notes were to be current in all pecuniary transactions,
and were to be paid in specie, six months after they were presented for
payment.

Such were the chief propositions at the commencement of the eigh-
teenth century. It would be impracticable to follow the numerous schemes
which have since been propounded, but a few of the later plans may not
be uninteresting. In 1819, a proposition was made which boldly grap-
pled with the immediate difficulty. Estimating the entire private property
of the kingdom, on the lowest calculation, at two thousand five hundred
millions, it suggested that all such property, including all claims on the
government, in respect of money lent and advanced, should be declared
liable to a contribution of fifteen per cent.

In 1821, a " practical scheme " appeared, the leading points of which
were,

That all the annuities must be consolidated, viz. :

Dividend Accounts.

. . 65

73i

. * . . . .81

. . .... 100

That an assessment of twenty per cent, be laid on all property and
funds so consolidated.

That an assessment of five per cent, be laid on private property not in
the British funds.

That fixed property, except buildings, be valued at twenty years'
purchase.

That this assessment be converted into a redeemable income-tax, at the
option of the proprietor, at five per cent, per annum.

That a similar assessment, for the term of ten years, be levied on net
profits of trade and agriculture.

In 1827, it was proposed to pay one half the debt by an assessment
of twelve per cent, upon the entire capital of the country ; and, in 1832,
another " practical plan " was suggested ; " to impose a loan of twenty
per cent, upon all the net real property, excepting those whose posses-
sions are less than 100 ; the amount to be paid either at once, or by
instalments, within five years."

To impose a tax of five per cent, for one year upon all incomes of not
less than 100 a year, arising from profits of artists and other profes-
sional men.

To abolish all internal taxes, excepting the land-tax.

Other propositions have appeared, but they have been entirely disre-
garded. The evil day has been deferred, and will continue to be so ;
but it affects all good citizens to bear in mind that it must eventually
arrive ; and some future historian will record that the ruin of England
arose from the greatness of her national debt, because her citizens were
deficient in that abnegation of self which alone could grapple with a
great difficulty, save a great country, and alleviate the sufferings of a
patient and enduring people.

In 1817, the ministry debated the advisability of altering the mode of
registering the accounts of the national debt. Many complaints had been
made by bankers and merchants, of the long period employed by the
Bank of England in preparing for the payment of the dividends ; and
they contended that six weeks were unnecessary ; or, if necessary, that
some new method should be tried by which the annoyance might be
remedied.

The suggestion was taken into consideration, and the system of deben-
tures very generally debated. After much mature thought, it was decid-
ed that, though the plan answered very well with foreign securities, the
English debt was too gigantic, and the plan would involve too great a risk
to be entertained. After much discussion in the journals, and a few
questions in the House, the idea was abandoned ; nor was it until thirty
years from the above time, that the objection of the bankers was met ;
and, by the arrangements of Mr. William Ray Smee, now in operation
at the Bank of England, the stocks closed only three instead of six
weeks.

Changes and Inventions.

CHAPTER XIII.

Progress of Invention, Public Roads. Steam. Duke of Bridgewaler.
Canals. Railroads. Thomas Gray, their Pioneer. His Difficulties.
Proposals for the Liverpool and Manchester Railway. Monopoly of the
Canals. Parliamentary Inquiry. Extraordinary Opinions of Witnesses.
The Claims of Thomas Gray. Value of Canal Property.

IT is not unworthy of remark, that many of the greatest efforts of in-
tellect are within the scope of the writer ; as most of those works which
have from time to time benefited the world, both socially and physically,
have been assisted by the money power of England. Nor will the in-
quirer be backward in comparing the singular difficulties with which all
inventions requiring great capital contended in the last century, with the
remarkable facility which marks their progress in the present, if they
fairly promise, as most grand inventions do, to interest the entire com-
munity, and pay ten per cent.

The annals of invention have ever been those of opposition ; and the
history of locomotion has been singularly illustrative of this. The jour-
ney from city to city, and from county to county, was once painfully
slow. It is a subject of ridicule in the present day. A great feature
with novelists, a few years ago, was to represent the incidents of a long
inland journey. The memory of the reader will at once recur to " Tom
Jones," to " Humphrey Clinker," and to the humorous scene drawn by
the modern master of fiction in the opening chapter of " The Antiquary,"
as some illustration of the liabilities of the traveller.

It is easier to ridicule than to reason, and safer to prophesy defeat
than to predict success. The minds of the mass generally depreciate
that which is beyond them ; some fancy that they elevate themselves by
lowering others ; while the many, who bigotedly view all change as evil,
doggedly refuse to acknowledge the good till they reap the fruit ; and it
is probable that the loudest grumbler in the railway-carriage of the pres-
ent day was the loudest declaimer against locomotives a quarter of a
century ago.

When the turnpikes were extended from the metropolis to the country,
many of the counties petitioned Parliament against so heinous an attempt
upon vested rights. The rustic gentleman grew eloquent upon the sub-
ject of rendering London accessible, and drew pictures of desolation, in
which the grass was to grow in the streets, in which rents were to be re-
duced, cultivation was to be lowered, and the producer ruined. The
toll-bars of the newly-made roads in the eighteenth century were torn to
the ground, and the blood of a prejudiced people was shed in their de-
fence. The first " flying coaches," though six days were employed to do
that which is now done in six hours, were met with invectives. It was
said that they would be fatal to the breed of horses and the art of horse-
8* 89

Bridgewater Canal.

manship ; that saddlers and spurriers would be ruined ; that the inns
would be abandoned ; and, above all, the Thames, as the great nursery
of our seamen, would be destroyed. The post, that grand social benefit,
was denounced, in Charles II.'s reign, as a Popish contrivance ; and the
first attempt to light the streets an attempt which only made darkness
visible was vehemently attacked.

When the Margate steamboat, with its six hours' journey, superseded
the Margate hoy, which occupied almost as many days, the coach pro-
prietors, under the idea that Margate was their peculiar property, and its
visitors their particular prey, petitioned Parliament to support the coaches,
at the expense of the steamers. A century and a half since, it was
thought a great effort to run a coach between Edinburgh and Glasgow in
three days ; it is now done in one hour ; and, only a century since, it
occupied thirty-six hours in doing that which is now accomplished in four^
Although this tediousness of transit was partially owing to what were by
courtesy called roads, it must be remembered that then, as now, there
were the prejudices of the people with which to contend ; and, perfectly
content with the existing state of things, the country gentlemen were most
strenuous in their objections to the introduction of stage-coaches, on the
plea that their wives would lose their domestic habits through travelling
too frequently, and cease to be worthy housewives to the squirarchy of
England.*

The floor of the House of Commons was covered with memorials
from inkeepers and petitions from postboys. They merely indicated
the selfishness of the memorialists, tired the patience of the senators, and
wasted the time of the nation. But petitions in favor of " no progress "
were not the only mode of opposition. When the Lea was made navi-
gable, the farmers became furious, broke down the banks, and injured
the river. Still, with the progress of the nation, the roads continued to
improve. Transit became easier, more rapid, and cheaper ; and just as
the world was congratulating itself on the perfection of its highways, a
new plan was proposed.

It soon became public, that a strange, eccentric nobleman, known as
the Duke of Bridgewater, had a queer crotchet in his head to create a
water-carriage, by cutting canals. It began also to be rumored, that this
same eccentric Duke, seriously determined to finish what he had com-
menced, had reduced his personal expenses to 400 per annum, and
given up the remainder of his rental to carry out his project. The
many had -no hesitation in declaring him insane ; but his Grace scarcely
thought of their opinions as he proceeded with his task ; and the remark-
able firmness of the Duke of Bridgewater, aided by the great mind of
John Brindley, his architect, produced an effect which has already sur
vived the pecuniary results at which he aimed. It is impossible in the
present volume to do justice to the resolute character of the Duke, or to

* The road to Paddington, now known as the New Road, was hotly contested by
the Duke of Bedford, on account of the dust it would create, and the view it would
abridge. Walpole wrote, that the Duke was never in town to feel the dust, and was
too short-sighted to see the prospect.

Carriages of 1646.

the obstacles overcome by the skill of Mr. Brindley. Stupendous mounds
of earth were removed, which seemed to demand Titanic power ; supplies
of water were procured sufficient to exhaust mountain springs and moun-
tain rivulets ; aqueducts were built far above the surface of the river,
rivalling those which conveyed water to the Eternal City from the moun-
tain recesses.

At last the prejudices of the ignorant multitude were uprooted, and the
scientific few delighted. They who had gone to scoff remained to praise ;
and an engineer, who had sneeringly said they had heard of castles in
the air, but now they were to see them realized, began to wonder as much
at his own opposition as at the simple grandeur of the work he had de-
rided. The chief business of the Duke's agent was to ride about the
country, borrowing money on the promissory notes of his Grace, whose
bond for 500 was refused in the city, where great purposes are little
regarded unless they promise a great percentage.

In five years the attempt was crowned with success, and the effect
upon commerce became manifest. Liverpool received the manufactures
of Manchester at a cheaper rate, and Manchester was supplied with
goods from places hitherto comparatively inaccessible. The neighbour-
ing woods and vales were visited by the pale denizen of the factory on
the day of rest ; and passengers were enabled to travel along that canal
which they owed to the patient endurance and undeviating firmness of
Francis, Duke of Bridgewater, and to the singular ability of his unrivalled
architect, to both of whom personal comfort and public praise were noth-
ing in comparison with the achievement of a great idea.

But a new power was in progress, which was to realize all the visions
of a day-dreamer, and almost to annihilate both time and space. The
progress and development of railways is one of the most interesting
features in locomotion. About 1646, a Mr. Beaumont was ruined in
attempting to convey coals in carriages of a novel construction. The
necessity of some improvement in the conveyance of this article was,
therefore, thus early recognized. Thirty years afterwards, a saving of
thirty per cent, was effected by some tram-roads near Newcastle ; and as
information spread, and the great dogma that time is money began to be
appreciated, further improvements were made. The wooden roller of
the wagon was changed for an iron wheel with cast-iron rails. Plenty of
claimants were found for this imperfect alteration, although soon after it
was necessary to adopt a rail fixed a few inches above the ground. The
next improvement was that which detached the horse, and made him
follow the wagon ; and when the road was constructed with two inclines,
so that a descending train of loaded coal might draw up an empty one,
it was thought that all which human ingenuity could effect had been
achieved ; and at this point it is probable the rail would have remained,
but for the great discovery of steam-power, and its application to prac-
tical purposes. About 1760, coeval with the introduction of iron rails,
Watt entertained the idea of employing steam as a moving power ; but
the design was abandoned ; nor was it till 1802 that the attention of en-
gineers was devoted to locomotive engines on railroads ; when a pa-

Thomas Gray.

tent was taken out, and the principle tested with success at Merthyr
Tydvil.*

The name of Thomas Gray in connection with railroads ranks at pres-
ent among the many whose ideas were derided by the very men who
afterwards adopted them. From an early period he formed the opinion
that railways would become the principal mode of transit. It was his
thought by day ; it was his dream by night. He talked of it until his
friends voted him an intolerable bore. He wrote of it until the reviewers
deemed him mad. Coaches, canals, and steamboats were, in his mind,
useless. His wisdom and far ken shadowed forth the path which the
purse of others consummated ; and, while the projector died steeped to
the lips in poverty, the speculators realized great profits. His conversa-
tion was of a world which his companions could not comprehend. To
appropriate the idea of Mr. Macaulay, there were fools then as there are
fools now ; fools who laughed at the railway as they had laughed at the
canals ; fools who thought they evinced their wisdom by doubting what
they could not understand. For years his mind was absorbed by these
dreams ; and there was something magnificent in all his projects. He
talked of enormous fortunes realized ; of coaches annihilated ; of one
great general line ; and he was laughed at. He went to Brussels ; and
when a canal was proposed, he again advocated railways. At; last he
put his thoughts into form ; wrote " Observations on a Railroad for the
Whole of Europe "; and was ridiculed ; the work being suppressed, lest
men should call him mad. In 1820, however, he published a book which
he called, " A general Iron Railway, or Land Steam Conveyance,"
which attracted great notice. There was something so pertinacious in
the man, and something so simple in his scheme, that, though it became
the custom to laugh at him, his book went through many editions. When
from Belgium he came to England, true to his theme, he went among the
Manchester capitalists. The men who passed their lives among, and
owed their fortunes to the marvels of machinery, were not yet equal to
this. They listened graciously, and with a smile, something akin to
pity, dismissed him as an incorrigible visionary. But opposition was
vain ; nor was Thomas Gray the man to be easily laughed down. He
continued his labors, he continued to talk, to memorialize, to petition,
to fill the pages of magazines, until the public mind was wearied and
worried.

The first result of Gray's great scheme was with the capital of those
men who had previously derided him. The men of Manchester found
they were paying too much for the cost of conveyance, and availed them-
selves of the idea they formerly denounced. A railway was projected
between Liverpool and Manchester, and then commenced that ignorant
opposition, of which one of the blue books contains such pregnant proof.

* The attempt of Mr. Ogle to run locomotives on the public roads must have cost
him many thousands ; and nothing but the same popular prejudice which attempted
to prove that engines on railroads would send horses mad with fright, prevented this
great attempt from becoming general. The reader must remember the grave shaking
of heads which met Mr. Ogle's cherished design, as similar heads have always been
shaking at novel propositions.

Liverpool and Manchester.

By this it appears clearly that the transit between Liverpool and Man-
chester had long been insufficient. It was stated in evidence, that places
were bespoke for goods, like places at a theatre. " It is not your turn
yet," was a common reply, if extraordinary energy were required ; and
It was clearly proved that the monopolizers would only send as much
cotton as they chose, arbitrarily fixing the quantity at thirty bags a week.
The fifty-five miles by canal occupied as long as the distance to New
York. The boats were too few to convey the goods ; and on one canal
the proprietors received for their yearly dividend the amount of their
original investment. In vain were the agents importuned to render con-
veyance more rapid and less expensive. The monopoly remained with
the owner of the canal, who, blinded by a long course of success, could
not see that, with the increase of business, an increased communication
must be opened ; and it is singular that, when the railroad was first con-
templated, and its promoters applied to the agent to take some shares, an
answer worthy of an autocratic government rather than a commercial
age was given, of " all or none." The shrewd merchants of the North
chose the latter alternative.

The difficulties, therefore, with which the new invention had to con-
tend, were legion ; and the Parliamentary inquiry, already alluded to,
produced one of the most remarkable blue books ever published. A few
extracts from the folio will evince the extraordinary ideas entertained on
the subject, the extraordinary ignorance evinced by men regarded as
scientific, and the yet more extraordinary prejudice which marked the
progress of opinion on railway transit. It is, however, right to say, that
the friends and foes of the proposed scheme were equally unscrupulous
hi their endeavours to forward their interests, as levels were taken with-
out permission, strawberry-beds destroyed, cornfields trodden down, and
surveys taken by night, at the risk of life and limb. On the other hand,
guns were discharged at the intruders ; the land was watched incessantly ;
and the enthusiasm of the great engineer of the line narrowly escaped
being cooled in a horsepond.

The objections urged by the opponents of the railway were worthy their
cause. It was contended by them that canal conveyance was quicker ;
that the smoke of the engines would injure the plantations of gentlemen's
houses ; and one witness, more imaginative than perceptive, described the
locomotives as " terrible things," although, on further questioning, he
admitted he had never seen one. It was boldly declared, that a gale of
wind would stop the progress of the carriage ; that there would be no
more practical advantage in a railway than in a canal ; that Mr. Stephen-
son was totally devoid of common sense ; that the plan was erroneous,
impracticable, and unjust ; and that the tendency of the railway would be
to increase the price of carriage. It was declared to be based on fraud
and folly ; that balloons and rockets were as feasible , and that the whole
line would be under water for two and three weeks in succession.

" It is quite idle and absurd," said one, " to say the present scheme
can ever be carried into execution, under any circumstances, or in any
way." " Whenever," said another, with the authority of an oracle,
" Providence in Lancashire is pleased to send rain or a little mizzling

Opposition to Railways.

weather, expeditious it cannot be." A third gave it as his opinion, that no
engine could go in the night-time. " because," he added, more Scrip-
turally than soundly, " the night-time is a period when no man can
work ! "

It was said that no one would live near a spot passed by the engines ,
that no houses would let near a station ; and that all property on the line
would be frightfully deteriorated. Not content, however, with proving
the impracticability of the plan, the most frivolous causes were adduced
to show why this, the grandest national project ever brought forward, a
project which has changed the face and features of the land, the com-
merce of the country, and the social habits of the rural population, should
not be allowed to pass.

The public services of a railroad were put in competition with the an-
noyance which an individual would receive from the smoke of the engines
coming within 250 yards of his house ; and it was pathetically asked,
" Can any thing compensate for this ? " Gentlemen objected because it
would injure their prospects, and land-owners because it would injure their
pockets ! Pictures of ancient family residences destroyed by the smoke
were vividly drawn. The claims of unprotected females and reverend
gentlemen were strongly urged ; and pathetic representations were given
of families, who had lived for centuries in their ancestral home, leaving
the dwelling-place of their youth, and going to another part of the town.

" Mr. Stephenson," it was boldly declared, " is totally devoid of com-
mon sense. He makes schemes without seeing the difficulties." " Upon
this shuffling evidence, we are called to pass the bill." " It is impossible
to hold this changing Proteus in any knot whatsoever." " It is the great-
est draught upon human credulity ever heard of."

" There is nothing," said one, " but long sedgy grass to prevent the
train from sinking into the shades of eternal night." " They cannot go
so fast as the canal," said another. A third appealed to the pocket.
" If this bill succeeds, by the time railroads are set going, the ' poor,
gulled subscribers will have lost all their money ; and, instead of loco-
motive engines, they must have recourse to horses or asses, not meaning
to say which." Those whose interests would be affected decided that
" locomotives could not succeed "; and numberless were the sneers at
the idea of engines galloping as fast as five miles an hour. One sapient
gentleman thought the trains might go at four miles and a half in fine
weather, but not more than two and a half in wet.

" When we set out with the original prospectus," was the remark of
the counsel, " we were to gallop I know not at what rate. I believe it
was twelve miles an hour, with the aid of a devil in the form of a loco-
motive sitting as postilion on the fore-horse, and an honorable member
sitting behind him to stir up the fire, and keep it up at full speed. I
will show they cannot go six. I may be able to show we shall keep up
with him by the canal." " Thus, Sir, I prove that locomotive engines
cannot move at more than four miles and a quarter an hour ; and I show
the scheme is bottomed on deception and fallacy."

Turnpike trusts were to be ruined, and therefore railroads were not to
be forwarded ; and it was deemed unanswerable to say that the canal

Thomas Gray and Lord Egerton.

interests would be hurt by the rail. Though it was proved by others that
more money had been offered for land if the line passed through than if
it did not, it was of no importance in the eyes of those who, blinded by
selfishness, refused to be convinced. The war-cry on one side was the
venerable " vested rights " ; on the other, " progress."

Men prosily and pathetically talked of tempting Providence by travel-
ling at the rate of twelve miles an hour. The fine breed of English
horses would be deteriorated, and our cavalry be worsted at the first on-
set. The prosperity of a great community was said to be involved in the
contest; and the question whether a few miles of railway would peril
the welfare of the kingdom, was openly discussed. Stable-boys joined
in the contest, and urged the greatness of their claim ; the porters proved
how important a class would be sacrificed to so unimportant an end ; and
the clergy, alarmed lest the rustic should neglect the Sunday sermon to
see the passing train, added to the number of petitions. A million horses
were to be thrown out of service, and eight millions of oat-growing acres
to be abandoned. Gentlemen with neither sense nor science wrote
treatises to demonstrate the danger of travelling more than ten miles an
hour, and, at the same time, left on record their want of sympathy with
crack-brained speculators.

But if the opponents were thus bitter in their attack upon the new
scheme, they were equally ingenious in their defence of the canal. It
was described as never subject to drought ; the frost never stopped it ;
the sun never lowered it ; accidents never happened on it. Its friends
were also hardy enough to contend, that a saving of nine miles an hour
was not sufficient to justify the attempt ; and " therefore," added one
who supported this argument, " I do protest against the despotism of the
Exchange at Liverpool striding across the land of this country." The
reply to all these objections is in the fact that some thousands of miles are
now open to the public.

The Manchester and Liverpool Railway succeeded ; but no reward was
conferred upon Thomas Gray. Other railways followed, and were suc-
cessful ; but no notice was taken of Thomas Gray. The great railway
mania came ; but Thomas Gray was nothing in the eyes of excited
speculators, greedy of gain. An endeavour was made by some of the
friends of Gray to win for him the public sympathy ; and the poor, old,
broken-hearted man, when he respectfully begged for a situation on one
of those railways which he had so greatly forwarded, was refused.

" The claim of Gray," said the Westminster Review, " is, that he
found the railway and the locomotive in the condition of mere miners'
tools, dragged them to light, and proclaimed them as the means of uni-
versal progress. He published a practical plan, in 1820, which was
scoffed at on all hands ; but in 1830 was made a fact by George Stephen-
son, though in 1829 it was almost considered a certain thing that the
haulage on the Liverpool and Manchester would either be performed by
horse-power or by stationary engines."

The truth of these assertions has never been called in question. The
railway press has generally recognized it. Public subscriptions for the
public benefactor were proposed. A petition in his favor was forwarded

Speculations in 1824.

to the House of Commons. But Thomas Gray was poor, and without
influence ; and has added another name to those who have benefited and
been buffeted by mankind. Neglected by the directors of the great
works he had pioneered into existence ; neglected by the state, whose
profits from railway stamps and railway duties are mainly owing to him ;
neglected by the great mass of men, who avail themselves of the con-
veyance which once they derided ; the " railway pioneer," that title which
to the last he so dearly loved, died steeped to his lips in poverty, while
the speculators reaped large gains.

It is a curious circumstance in financial history, that Lord Francis
Egerton, the representative of the great canal projector, received shares
which produced a clear profit of more than 100,000, to prevent his
opposition in the House of Peers ; although it is a most suggestive fact,
that, with the increase of railway travelling, canal property has abso-
lutely improved. The following is the price of shares in 1824 :

OLD BIRMINGHAM CANAL.

Original Cost. Value in 1824. Annual Dividend.

140 2,840 100

STAFFORD AND WORCESTER.

140 960 40

TRENT AND MERSEY.

200 4,600 1 50 and bonus.

CHAPTER XIV.

Monetary Excitement. Approaches to the Stock Exchange. Gold Company.
Equitable Loan Company. Frauds in Companies. Loan to Foreign
States. Poyais Bubble.

THE excitement of 1824 and 1825 has usually been considered in
reference to banking and the Bank of England. It is the writer's pres-
ent purpose to draw attention to the social and moral evils of the pe-
riod ; and, by a simple detail of some curious incidents and dangerous
adventures arising out of it, to draw attention to the great and crying
iniquities which obtained.

The readiness with which shares were attainable first created a class
of speculators that has ever since formed a marked feature in periods of
excitement, in the dabblers in shares and loans with which the courts and
crannies of the parent establishment were crowded. The scene was
worthy the pencil of an artist. With huge pocketbook containing worth-
less scrip ; with crafty countenance and cunning eye ; with showy jew-
elry and threadbare coat ; with well-greased locks and unpolished boots ;
with knavery in every curl of the lip, and villany in every thought of the
heart ; the stag, as he was afterwards termed, was a prominent portrait

New Mining Companies.

in the foreground. Grouped together in one corner might be seen a
knot of boys eagerly buying and selling at a profit which bore no com-
parison to the loss of honesty they each day experienced. Day after
day were elderly men, with shabby faces and huge umbrellas, wit-
nessed in the same spot, doing business with those whose characters
might be judged from their company. At another point, the youth, just
rising into manhood, conscious of a few guineas in his purse, with a
resolute determination to increase them at any price, gathered a group
around, while he delivered his invention to the listening throng, who
regarded him as a superior spirit. In every corner, and in every vacant
space, might be seen men eagerly discussing the premium of a new
company, the rate of a new loan, the rumored profit of some lucky spec-
ulator, the rumored failure of some great financier, or wrangling with
savage eagerness over the fate of a shilling. The scene has been appro-
priated by a novelist as not unworthy his pen. " There I found myself,"
he writes, " in such company as I had never seen before. Gay sparks,
with their hats placed on one side, and their hands in their breeches
pockets, walked up and down with a magnificent strut, whistling most
harmoniously, or occasionally humming an Italian air. Several grave
personages stood in close consultation, scowling on all who approached,
and seeming to reprehend my intrusion. Some lads, whose faces an-
nounced their Hebrew origin, and whose miscellaneous finery was finely
emblematical of Rag-fair, passed in and out ; and besides these, there
attended a strangely varied rabble, exhibiting, in all sorts of forms and
ages, dirty habiliments, calamitous poverty, and grim-visaged villany.
It was curious to me to hear with what apparent intelligence they dis-
cussed all the concerns of the nation. Every wretch was a statesman ;
and each could explain, not only all that had been hinted at in Parlia-
ment, but all that was at that moment passing in the bosom of the Chan-
cellor of the Exchequer."

The entrance to the Stock Exchange became at last so choked up, that
nothing but a fine of .5 on those who stopped the way had any effect
in dispersing the nuisance.

Among the companies which sprung up daily was one to make gold ;
and success was declared to be undoubted. The shares were all greedily
taken ; and it was then advertised, that, as the expense of producing one
ounce of gold would cost double the value of the produce, the company
would be dissolved, and the deposits kept to pay expenses.

The capital of a mining company was divided between fifty propri-
etors, whose advertisements and puffs were disgraceful. The meanest
utensils of the peasantry were declared to be silver ; and, although there
were but ninety-nine mines in the whole district, the company professed
to have purchased 360. In a place containing 5,000 inhabitants, it was
affirmed the projector possessed 3,000 mines ; and, although they had
been previously abandoned after a loss of 170,000, they were pur-
chased at a high price, and puffed to an enormous premium.

The Equitable Loan Company was another specimen. In paragraphs
calculated to excite the sympathy of the public, the directors denounced
the profits of the pawnbroker, arraigned his evil practices, and delicately
9 97

Equitable Loan Company.

concluded by hinting that a company formed upon the most philanthropic
principles, and paying forty per cent., would soon be formed. The
philanthropy might have been proclaimed for centuries, but forty per
cent, was irresistible. The Duke of York good-naturedly lent his name ;
members of Parliament were bribed with shares ; and when it was hon-
estly said by one, that the bill would never pass the House, the trium-
phant reply given was, " O, we have so many on the ministerial, and
so many on the opposition side, and we are sure of the saints!" The
shares, however, went to a discount ; both opposition and ministerial
members lost all interest in the nefarious doings of the pawnbrokers, and
the philanthropy of the saints faded with the fading vision of forty per
cent.

The Bolivar Mining Company boasted of " mountains, not mines," of
metals. A railroad was projected to cross from Dover to Calais. A loan
of 225,000 was proposed for Patagonia ; another in derision advertised
for the Lilliputians and Houyhnhnms of Swift's political satire ; and, to
assist them all, a parliamentary steam company announced to pass more
rapidly the bills before the House.

At the formation of another mining company, the utmost magnanimity
was evinced. Rules were passed that none of the directors should hold
more than 200 shares, that all which remained should be brought hon-
estly into the market, and that every thing should be fair. But this
moderation waxed weaker as their power increased. Thousands of
shares were allotted among the managers, and locked carefully up. A
resolution was passed, that no director or officer should be required to pay
deposits ; and then, employing the most respectable brokers to purchase
1,000 shares with the money of the company, they created a sensation
in the market, and sent them to a premium. .The person who sold the
mines to the company was employed to report upon their value. Opin-
ions the most flattering were given of property absolutely worthless ;
and, as a proof of the greediness of one party and the incapacity of the
other, it may be mentioned that a mine, the full value of which was
,400, was purchased at <1 1,000; and that < 12 1,000 were paid for
some which, in almost every instance, were exhausted.

When the Lower Rhine Steam-Navigation Company was announced,
it became a great favorite. Large quantities were sold for the account ;
and, as the settling time approached, the premium rose to 28. The
sellers were unable to deliver the shares, and their difficulties became
serious. To meet them, new receipts were printed, closely imitating the
old, the name only of the banker being changed. The deceit was dis-
covered. A committee sat to elucidate the fraud, and the supposed con-
coctor was expelled from the Stock Exchange. The circumstance ex-
cited great attention at the time ; and many more were said to be impli-
cated than it was in the power of the committee to reach.

Another peculiar feature of the period was to be found in the loans
which preceded and accompanied the memorable era when the public
was wild to lend its capital to foreign states, and the resources of the
borrowers were scarcely regarded. The dividends of the English funds
were scoffed at ; the general rate of percentage was increased in the

South American Loans.

eyes of the many ; Patagonian or Lilliputian securities, which promised
eight per cent., were eagerly looked for ; and solid loans were followed
by visionary dividends.

It is a somewhat curious fact, that directly the Navy five per cents
were reduced, the people rushed wildly into new securities to retrieve
their loss, and missed in the promises of the one the certainty of the
other. In 1822, foreign states which, in some cases, had not even at-
tained the freedom for which they fought, became creditors to the Eng-
lish public to the amount of 10,150,000.

Chili, after a protracted resistance to the mother country, found success
followed its efforts. Lord Cochrane gave his powerful support to the na-
vy ; and, in 1818, a large tract of coast was declared by him in a state of
blockade. The vigor of his Lordship proved too much for the royalists ;
and in a short period a free constitution, with a popular government, was
appointed. But neither the free constitution nor the popular government
could do without money. The Chilian republic, therefore, borrowed one
million of the English people, at six per cent., and, having received the
cash, thought it unnecessary to pay the interest after 1826.

Peru, a place so interesting to the historic reader, from its early dis-
covery, its connection with the Spaniards, and the cruelties of Pizarro,
exhibited another specimen of loan-contracting. After years of violent
commotion and of resolute resistance, her independence was proclaimed ;
but independence did not produce quiet, and the name of Bolivar became
known in a sanguinary and protracted war. The Spaniards refused qui-
etly to yield their territory ; Lima surrendered to Spanish troops ; and
though they were dispossessed by Bolivar, and Peru became safe from
subjugation, doubt, distrust, and anarchy remained. During this period,
the opinion of the English people may be guessed from the fact, that they
lent, in 1822, ,450,000 at six per cent., and that it was contracted for at
eighty-eight per cent.

Colombia, which only dates its history as a nation from 1819, followed.
During the contest which preceded its independence, the insurgents were
supplied with implements of war and ammunition from this country, on
the security of debentures bearing ten per cent, interest ; and when the
great battle, in which Bolivar the hero of American independence ob-
tained a complete victory, and consummated the freedom of Colombia,
was fought, the new state borrowed two millions at eighty-four per cent.

Poyais was another instance of English liberality. .200,000 were
lent on a security so visionary, that not one dividend was ever paid ;
while sadder and more sorrowful effects than this followed. Adventures
which commercial history has rarely paralleled marked its progress ; and
sufferings, which make us shudder at the recital were the result of the
delusion. But little known out of a particular circle, the name of the
Poyais settlement is never mentioned there but with feelings of unmiti-
gated detestation.

A Scotchman, named Gregor MacGregor, claiming to be chief of the
clan which bears his name, formed the idea of creating a settlement on
the shores of the Black River. The first appearance of this man in a
public character was in the service of the patriots of Spanish America.

The Poyais Fraud.

Under the florid title of " General of Brigade of the Armies of the United
Provinces of New Granada and Venezuela, and General-in-chief of the
Armies destined against the Floridas," he succeeded in seizing a place
known as Amelia Island, which he proposed to use for purposes of ag-
grandizement. His views proving fallacious, he vacated it, and was next
heard of as carrying, with a trifling force, the rich town of Portobello.
Here he addressed to his men a manifesto, in which gold and glory, plun-
der and patriotism, equally occupied its periods. Scarcely was it issued,
however, ere the force of MacGregor was surrounded, and the great gen-
eral could only save his life by leaving his followers, leaping out of the
window in his shirt, and swimming on board his ship. It is probable that,
during these campaigns, the idea of a settlement first occurred to Mac-
Gregor, as, not long after their conclusion, he proposed a plan of emigra-
tion about to be related ; a plan by which colonization was to extend to
that part of America known as the Mosquito country. The more pleasing
title of Poyais was given ; the Stock Exchange was employed to circulate
some bonds for a loan of 200,000, at eighty per cent., on the security
of the country ; and a land renowned for its inhospitable climate was
puffed into a most undeserving celebrity. Every device of human in-
genuity was practised. Books were published in which the climate of
paradise seemed uncongenial by that of Poyais. The air was soft and
balmy ; the sun and sky were alike fructifying ; the soil yearned to yield
its fruits ; the water ran over sands of gold. Grain was to grow without
sowing. Tortoise-shell, diamonds, and pearls were plentifully promised ;
and, to the least imaginative, the most glowing realms of the Pacific grew
pale in comparison with a region where the sun was ever bright, and the
soil ever yielding. Labor would be superseded, life commenced in hard-
ship would end in luxury ; while gorgeous pictures of " the finest climate
and most fertile place in the world," excited the undisciplined imagina-
tion of those who had the money necessary to convey them thither. A
song, to be paid for by a company of Poyais lancers, was chanted in the
streets ; and the attention of the passing crowd was attracted by hired
ballad-singers. The new home was to be graced with a knight of the
Green Cross, a colonel to command, three legislative houses to guide its
affairs, and a sovereign in the person of Gregor MacGregor, under the
romantic title of Cacique of Poyais. An agent was employed to make
sales of land, and, unhappily, the applicants were numerous.

Nor was this all. An engraving was published, in which a church
attracted the religious sympathies of some, and a bank the mercenary
thoughts of others ; while a theatre gave an air of civilization and luxury
the scene.

Tempted by such descriptions, two hundred and fifty persons em-
barked for the land of promise ; their lives, their fortunes, and their
families engaged in a scheme which led to destruction. The mere ad-
venturer was drawn by the beauty of the settlement, the fineness of the
climate, and the hope of making a fortune. The son of the soil, who had
amassed a capital which in Great Britain was unable to save him from a
poor-house, but promised in Poyais a sufficiency for life, gathered his
family together, sold his little furniture, reserving, with Scottish piety, the

100

King of the Mosquitos.

Bible which had often consoled his Scottish hearth, and sought an un-
known clime, and a new home for his household deities. Notes, payable
at the Bank of Poyais, were given in exchange for notes of the Bank of
Scotland, under the plea that the latter would not circulate in the Mos-
quito country. At length, the barks which were to conduct the settlers
were entered at Leith harbour ; and under different auspices, but with
similar results to those which marked the Darien expedition from the
same port, they left the spot which many were destined to see no more.

Their arrival at the Black River was ominous. As their vessel neared
the new country, a gun was fired, and colors hoisted, to announce the
coming of the emigrants. Every moment they looked anxiously out
for some symptoms of the settlement. Every eye was strained to see the
spire of the church which, in all their dreams, had decorated their home.
Every heart beat with a strange, unwonted anxiety as they came near the
place which had been pictured in such vivid colors. No great powers of
imagination are necessary to conceive their watchful expectation, as hour
after hour passed, and their signals remained disregarded ; or with what
a bounding joy they must have seen the first boat, conveying three white
people, approach the ship. The delusion was brief; and a few words
damped their hopes and destroyed their visions, by the information that
it was a savage, sterile, and desolate spot. Greatly dispirited, they com-
menced a sad and sullen journey up the creek. With a burning sun and
sky above, no traces of civilization around, exhausted by the climate, and
galled by insects which the heat of the air nourished in great size, they
proceeded with an almost funereal melancholy to their city of refuge.
The young and ardent asked for gold and gems ; the old and cautious
looked at the situation, as, with an anxiety they could not conceal, they
questioned of the soil, its capabilities, and its cultivation. " Lo ! " wrote
one who suffered greatly in this disastrous expedition. " Lo ! they said it
was all swampy." By the shades of evening they landed, and eagerly
looked for their future home. It was too dark to see where the old town
of St. Joseph's formerly stood, as its site was covered with bushes ; and
new town there was none, save a couple of huts, scarcely worthy the
name. The next day, the terrible heat of the climate demanded shelter ;
but, with every possible exertion, it occupied three days in clearing suf-
ficient ground for their habitation. Some wept at sight of the desolate
spot ; others gnashed their teeth ; while many, yielding to despair, threw
themselves on the ground, and declared themselves abandoned of God
and man. The more hopeful were employed in pitching tents, and had
scarcely commenced landing the goods, on which their safety depended,
when a great gale arose, and the vessel was blown away ; nor did they
hear of her until a month had elapsed. Their situation was not only
painful and perilous, but almost hopeless. Hardy as they were, and fit
to battle with any fate, they bore with them those for whose safety they
would gladly have perilled their lives.

The young child and the aged grandsire, alike incapable of restraining

their wants and wishes, were there. The mother and the infant, the

maiden and the matron, had each her representative. " Bushes were

around, and the moon above," wrote one of the survivors. Night brought

9* 101

Failure of the Poyais Bubble.

its fearful malaria, day its yet more fearful sun ; and who can imag-
ine the first dig of the spade which, as it sunk deeply into a soil, half
mud and half water, sunk more deeply into the heart of the unhappy
agriculturist. They sowed corn, and the sun withered it as k rose from
the ground. They planted potatoes, and as they sprung up, they perished
from the great heat. A further danger appeared to the settlers. They
were told by the king of the Mosquito nation, that no grant would be
recognized by him, and that they must acknowledge allegiance or quit
his territory. In these circumstances, it was deemed advisable for a
deputation to wait upon his Majesty ; and over sandy beaches they took
their way. Weak from want of food, weary from want of rest, their
journey proved one of toil and trouble. The rainy season was fast ap-
proaching ; sickness and death decimated the wanderers ; and vainly did
they make desperate efforts to avert their impending fate. One party
procured a boat, and started in search of aid ; but, unhappily, forgetting
to take water, died ere it could attain help. Others bought a canoe, and,
with Indians to guide them, were scarcely at sea, ere their treacherous
companions plundered and flung them overboard. Those who remained
had yet to be acclimated ; and sickness added to the sufferings they had
already endured. Eating salt provisions, drinking impure water, burn
ing by day and shivering by night, on the borders of a creek which bred
disease, with a fatal malaria around, they were unable to resist the ague,
'which in its worst form seized upon .them. Without help and without
hope, far from home, in an inhospitable country, sickness seized upon
one and all. It spared neither age nor sex, neither strength nor decrep-
itude. The most resolute fell beneath its power ; the weakest felt its
fatal influence ; and so fearfully was the colony at one time situated, that
not one could lift a finger to assist the other. Death ensued ; and the
only portion of the soil gained by many was that which gave a grave.
The mortality was two thirds.

But these were not the only evils. In September, 1824, it was said,
" Another thing, in the shape of a Poyais loan, has been brought into the
market." Great as the excitement was, there were not many disposed
to risk their money ; but those who did were persons who had saved a
small amount, which, though insufficient to live upon, was sufficient to
excite a desire for more. By this class a considerable sum was ad-
vanced ; and the ruin which fell upon them was tremendous. Their
despair was loud, but useless. The Poyais loan was an epoch from which
.many dated for the remainder of their lives ; and the figure of one of
these unhappy speculators must still be familiar to some readers, as she
wandered daily through the offices of the Bank of England, and the pur-
lieus of the Stock Exchange, exposed to all the annoyances which fall
upon those who earn their bread in the public thoroughfares. The
Poyais scrip was destined to a lower employment still. It was used
during the mania for foreign loans in 1836, as a mode of jobbing, the
turn in which, suited to the pockets of those who dealt in it, varied from a
halfpenny to a penny, according to the demand.

Emigration received a great shock ; and " to be served like the Poy-
ais settlers " was a common excuse of the poor and unthinking. If, how-

102

Loan to Guatemala.

ever, the Stock Exchange proved indirectly injurious to the great cause
in this instance, one of its members has done more towards its assistance
than is often effected by individual exertion. The efforts of Mr. Benja-
min Boyd will form an important chapter in some future history of our
Australian colonies ; as, from his determined energy, an impulse has been
given to emigration which no future official supineness can eradicate.

Steam-navigation to Australia is greatly desirable ; and governments
which, as the present volume proves, often lavish their money unworthily,
should at least be ready to assist in achieving so great and beneficial a
fact. All local objections are overcome. The difficulty of the " barrier
reef" is proved to be an idle dream ; and the time will yet arrive when
men will wonder that a few thousand pounds should for years have re-
tarded steam-navigation to colonies important alike to the commerce, the
comfort, and the civilization of England. The writer gives the following,
to show that the few words he has said are not unsupported :

" We unhesitatingly and confidently reply, that for all this the colony
has to thank Mr. Benjamin Boyd. With this gentleman solely the move-
ment originated ; by him and his family it has been maintained and sup-
ported. To this cause Mr. Boyd has devoted his individual labor ; he has
lavished his wealth on it ; he has enlisted in it the activity and talent of
his own relations, and that of their numerous and influential friends ; he
has supplied them with information and advice, and urged on their flag-
ging zeal, when requisite, up to the formation of the Colonization Society,
and the commencement of the Colonization Crusade now in progress.
And in this course he has persevered, in spite of obstacles cast in his
way by the colonists themselves, in spite of obloquy and ridicule from
men who were to benefit by his exertions, but on whose ignorance and
supineness his stirring activity was a bitter and ceaseless censure."

CHAPTER XV.

Loan to Guatemala. Dispute concerning it. Greek Loan. Its Mismanage-
ment. Asserted Jobbing. Mr. Hume. Dr. Bowring. Quarterly Re-
view. Proposed Tax on Transfers.

GUATEMALA was a further specimen of loan-making. According to
custom, Barclay & Co. announced that they were appointed agents to the
above state, and were prepared to receive tenders for a loan to the amount
of .1,500,000. The house of Powles & Co. stood highest on the list;
and it was publicly stated that their offer of sixty-eight per cent, was ac-
cepted. The first payment was to be made on the 22d of September,
1825 ; and should either of the instalments not be paid, those previously
received were to be forfeited. The price was considered low ; and Mr.
Alderman Thompson took 10,000 of the loan, at an advance of five

103

Continental Loans.

per cent., paying ^4000 as a deposit to Barclay & Co., as the agents,
When the sixth instalment became due, Powles & Co. advised Mr.
Thompson not to pay it, as a serious disagreement had arisen between
the government of Guatemala and their agents.

It appeared that Barclay & Co. had induced Powles & Co. to allow
their names to appear as contractors for the whole, while Barclays were
the real possessors of a million of that stock, the whole of which they pub-
licly announced had been taken by Powles. The news, however, reached
South America ; and the government, indignant at this conduct, repu-
diated the acts of Barclay, refusing to pay any dividend on the loan.
Under these circumstances, the purchaser declined to pay any more in-
stalments, and Barclay declared the previous deposits to be forfeited.

Mr. Thompson appealed to the courts of law ; but law and equity
rarely go hand in hand. The defendants contended that six per cent,
was usurious ; the justice of the case was one thing, but international law
was another; and it was, therefore, a triumph, but one which few
would envy, when the Vice-Chancellor " confessed that the case ap-
peared such as would entitle the plaintiff to the equitable relief prayed ;
but, as contracts for loans were illegal if the contractors were at war with
an ally of England, it could not be entertained as a subject of suit."

It is not to be wondered at that this willingness to lend found a corre-
sponding willingness to borrow. It was not alone the South American
states that came into the market ; nor was it only republican dictators
who were anxious to borrow. Denmark accepted ,3,000,000, Portugal
took 1,500,000, and Russia ,3,500,000.

From this period up to 1825, loans to foreign places foreign pow-
ers they cannot be called were very frequent. Brazil borrowed
< 3,686,200 in 1824, and in 1825 two millions more. Buenos Ayres
followed the good example, received one million, and then omitted to pay
the dividend ; while Mexico took 6,400,000. The emancipation of this
country from the yoke of Spain was a fair specimen of the liberal prin-
ciples of the Liberals of this period. Augustin Iturbide matured a plan
to emancipate Mexico ; and, having expelled the Spaniards, established a
regency, nominated by himself, formed of his own creatures, and con-
trolled by his own will. The army was with him, the usurpation of the
throne followed, and the dictator was proclaimed emperor. The crown
was made hereditary, his sons were to be princes, a million and a half of
dollars were settled on him, and all the accessories of royalty were es-
tablished.

A million and a half of dollars were more easily voted than procured.
Money was scarce, and the new emperor exacted it with severity. The
people grew disgusted ; the opposition saw its time ; disaffection spread
to the troops ; and Iturbide tendered his resignation to the senate he had
formed. It need scarcely be added, that the dividends were as difficult to
get from Mexico as they were from Peru.

But the Greek loan was the most extraordinary feature of the pe-
riod ; and with it is concluded the present rapid sketch of the bubbles of
1825.

The history of its mismanagement is one of those strange records of

104

The Greek Loan of 1824.

which the writer has seen so many during his search into the by-ways of
financial history. It must be in the memory of many, that, for some
years previous to 1824, the arm of the Greek was lifted in resolute,
though almost hopeless, resistance against the Ottoman. When the in-
telligence reached England, that the nation whose tongue was classic,
whose statuary was regarded with despairing wonder, whose records
formed one of the finest pages of history, was, after centuries of subju-
gation, striving to obtain freedom, a genuine enthusiasm pervaded Eng-
lish society. The antique grandeur of Greece was remembered ; the
ancient glory of her peop'e brought to mind ; names which had roused
the enthusiasm of schoolboys were repeated ; the clime which had pro-
duced the great men of a great age was in every man's thought ; dreams
of renewed glory were in every man's brain ; and on every man's
tongue, and in every man's heart, were the virtues of that past world
revived. Of this feeling the subtle Greek availed himself, and negotia-
tions were entered into to procure a loan. The proposal was favorably
received by the Stock Exchange. In 1824, two agents of the Greek
government, or deputies, as they were popularly called, arrived in Lon-
don ; and loans to the amount of .1,602,000 were raised for the service
of Greece. This sum was not placed uncontrolled in the power of the
deputies, the sanction of Mr. Edward Ellice, Mr. Joseph Hume, and
another, being necessary to its appropriation. After much hesitation,
50,000 sovereigns were despatched to aid the cause ; but when they ar-
rived, the government of that unhappy country refused to give any pledge
as to their worthy employment. The emissaries declined to part with
their treasure without ; and, to the alarm of the Greeks, they saw this
large amount sailing from their shore. Any pledge would now have
been given ; and the English emissaries were followed with protestations
and promises, which meant nothing but an earnest desire for the gold.
Scarcely had the ill-fated vessel returned, ere the yellow fever attacked
the crew. Helpless and dying, they reached the Asiatic coast ; and their
money was taken by the Greek government with an avidity which did
not affect disguise.

Mismanagement marked the progress of the cause in Europe as in
Asia. Two excellent Swedish vessels were offered for ,47,000. Time
was success, and, instead of purchasing vessels ready for action, con-
tracts were made with America for two frigates at 160,000. A cavalry
officer was appointed to superintend the naval department, and in two
months and a half five steamboats were to be placed at the disposal of
Lord Cochrane. " Within a few weeks," said Mr. Ellice, rather more
pompously than to the purpose, " Lord Cochrane will be at Constan-
tinople, and burn the Turkish vessels at that port. Cochrane will suffice
for admiral and general. He will clear Greece of the Turk." " Give
yourselves no further concern about the matter," said Sir Francis
Burdett, speaking as familiarly of war as of reform ; " your country
shall be saved." But though Sir Francis Burdett and Mr. Ellice said it,
the country was not saved. After spending .155,000 on two frigates,
< 50,000 more were required to finish them. This was not forthcom-
ing, and the vessels were seized. All seemed anarchy and confusion.

105

Hume and Bowring.

Schemes of the most extravagant character were propounded. Three
very important towns were to be besieged and carried by one thousand
men. A free press was to shed light and lustre around. Improvements
which were impracticable, and a constitution which could not be carried,
were promised.

During this unhappy period, the news of cities burned to the ground,
and forts stormed, of besieged places sacked after months of heroic re-
sistance, aroused the public ; and a storm of indignation was poured upon
projectors, deputies, and proprietors. The flagrant enormities of the
management were exposed, the military projects discussed, the financial
artifices denounced ; and attention was pointed, through the report of the
committee, at two, whose voices, loud in the cause of Greece, were said
to be louder in their own. Joseph Hume, a member of the senate, and
John Bowring, a linguist and a scholar, were on the committee. Reports
which touched the honor of both were in free circulation. Political feel-
ing, perhaps, prompted many of the remarks ; and the public press assert-
ed that to which no honorable man could submit. Mr. Merle, at a public
meeting, said " he had been told that certain portions of the Greek loan
had been appropriated to Mr. Hume ; that those bonds had not been taken
up ; and that they had afterwards been sold at a great loss to the Greek
government."

" Mr. Hume," wrote a daily paper, " has been publicly accused of
fraud and hypocrisy, in throwing upon the Greek nation the loss which
attended a speculation of his own, while acting in the assumed character
of a friend to the cause."

It was proved that one million had been wasted in commissions and
military preparations, in Stock Exchange transactions and Stock Ex-
change jobbing. The Greek deputies received allowances larger than
those paid to the diplomatic agents from great courts. Mr. Hume, in his
ardor for Greece, had 10,000 assigned him of the first loan. The price
fell sixteen per cent., and his ardor was said to have fallen In propor-
tion. Alarmed at a loss so great, the senator endeavoured to release
himself from the burden ; but when he applied to the deputies and con-
tractors, he was met with the reply, that, had the stock risen, he would not
have returned the gain. The argument was sound, but the head is obtuse
when the purse is endangered ; and Mr. Hume clear-headed generally
could not see the fairness of the position. After some correspondence,
the deputies agreed to take it off" Mr. Hume's hands, at thirteen instead
of sixteen per cent, discount ; thereby saving Mr. Hume 300 out of the
loss of 1,600 which he first feared. In time, the Greek cause grew
prosperous, the stock rose to par, and Mr. Hume, with a singular power
of perception compared with his previous notions, claimed the ,1,300
which he had lost. The surprise of the deputies may be imagined, and
they must have had curious ideas of the way in which the friends of
Greece wished to serve her. Mr. Hume, however, was powerful ; Mr.
Hume was a senator ; and to Mr. Hume was accorded a privilege for
which others might have looked in vain. But a further question arose.
Mr. Hume, remarkable for the closeness of his calculations, discovered
that 54 was due for interest. This he applied for, and this was granted.

106

Dr. Bowring^s Losses.

The defence of Mr. Hume was comprised in the assertion, that, some
of his actions having been misinterpreted, because he was a proprietor of
stock, he had determined to part with it. The deputies offered to save
the friend of the cause so great a loss ; and Mr. Hume thought the con-
clusion at which they had arrived a sound one. After some correspond-
ence, they agreed to take his stock at thirteen per cent, discount, the
market price of sixteen per cent, being but nominal. Mr. Hume wished
to be relieved entirely ; but this the deputies declined. Shortly after,
Mr. Hume was informed that these gentlemen would pay him the sum he
was deficient ; and as he considered this as fair, and not as a favor, he
also considered he was entitled to the interest. " The worst that any one
can say of me," concluded Mr. Hume, " is, that I may have evinced an
OVER-ANXIETY TO AVOID A PECUNIARY LOSS." Mr. Hume probably re-
members his over-anxiety to the present day.

The case of Dr. Bowring was equally memorable. The sum of
,25,000 had been allotted to this gentleman, and his horror and alarm
may be conceived when he saw it decline to a discount of eighteen per
cent. The doctor was very vehement in his applications. He repre-
sented his great services ; he worried the unhappy deputies ; he placed
his cause before them in such vivid colors, that the stock, which had
fallen to eighteen per cent., was taken off his hands at only ten per cent,
loss. When it rose to par, he imitated his illustrious fellow-laborer, and
applied to have it returned. He was reminded that he had parted with
his stock ; but the doctor, blessed with a short memory, professed to have
forgotten the very circumstance which it had cost him an agony to com-
pass. The letters of Dr. Bowring were somewhat naive. " I am still the
holder of a considerable sum, and I hope we shall see the loan rise to a
good price for the benefit of every body." " As the difference to me is a
serious one, and to the Greek government of little importance, I hope you
will oblige me by allowing the return of the .25,000 scrip."

There were statements and counter-statements in the journals ; there
were pleadings and special pleadings in the magazines ; there were elo-
quent papers in the Westminster Review, to prove it was all right ; and
there were powerful articles in the Quarterly, to prove it was all wrong.
4 The economical Mr. Hume's over-anxiety for scrip," said the latter,
" the erudite Mr. Bo wring's various translations of stock, the romantic
partiality displayed for per cents by Orlando, have been sufficiently dis-
cussed. Public opinion is quite made up in all these details ; and when
the sacred cause of insurrection all over the world shall again need a
loan, the suffering patriots may allow such statesmen to plead their cause,
to clamor about their wrongs, to weep over their miseries, to dabble in
metaphysical, poetical, and periodical departments, provided they do not
meddle with the pecuniary."

A poem was extensively circulated, in ridicule of the affair, and with
an extract, the present account of the Greek loan is concluded :

" 0, when the bubble burst, 't were sweet to mark
How cash and cant roared in alternate bark !
Here, ' Missolonghi's fall the spirit shocks' ;
There, ' Were that all, but, 0, the price of stocks 1'
107

Removal of the Stock Exchange.

Here, c Brimful now is misery's fatal cup,
The Turks have blown another fortress up ! '
There, ' Forts blown up ? I 've heavier news to tell ',
The scrip, the scrip will be blown up as well ! '
One cries, ' The cause is lost ! ' Another, ' Zounds,
Who cares ? I Ve lost my four-and-fifty pounds ! '
Snuffles a saint, ' I sorrow for the cross ;
But nineteen discount is a serious loss.'
Whispers a sinner, ' Why, the thing must fall ;
But, 't was a very pretty bubble after all ! ' "

The following extract from Dr. Shelton Mackenzie's " Partnership en
Commandite," will form a fitting conclusion to the history of the foreign
loan excitement of 1825 : " Upwards of twenty-five millions sterling
were advanced in foreign loans, of which the show of paying even the
smallest dividend is scarcely kept up. Taking into account the foreign
loans, the investments in foreign funds, and the amount advanced for
foreign railways, about 100 millions sterling have gone out of this country
in the last twenty-five years. Three fourths of this immense capital are
irretrievably sunk."

" I always," said a retired financier of great capacity, " tell my brokers
to sell when the Whigs come into office, as they are sure to lower con-
sols with the credit of the country." To intimate that the Whigs were in
office in 1831, is to say that their financial difficulties were great. In
this year curiosity was raised to know the mode which the Chancellor
would adopt to meet the deficient revenue ; and great was the surprise of
the commercial public when this gentleman boldly proposed, that, upon
every transfer of funded property, a tax of 10s. per cent, should be
placed. From this source he reckoned upon .800,000. It need hardly
be said, that the city received the proposal with such a burst of con-
temptuous derision, that the unhappy Chancellor in a very short time
consented to abandon it.

In the following year the reform question startled many capitalists, and
large sales of funded property were made. Some, alarmed at what ap-
peared more like revolution than reform, when they heard of " moral dem-
onstrations " to be made by two hundred and fifty thousand determined
men ; of soldiers detained in their quarters on Sunday, to sharpen their
swords ; of mutiny among the Scots Greys ; of business suspended, and
all the usual accompaniments of great changes, determined to sell
securities which a day might render worthless. The dealers narrowed
their personal operations to a limit consistent with safety ; while others
sold all, and purchased in foreign funds. The feeling of these individ-
uals was evinced by the fact, that they bought chiefly in Russian funds,
as affording greater security.

For a considerable number of years, many, who, not members of the
Stock Exchange, yet dealt in its securities and acted as brokers, em-
ployed the Rotunda of the Bank of England for their transactions. The
broker who had no counting-house made it his place of business ; and his
clients waited there until the transfer was ready, or the business was ar-
ranged. As a theatre for jobbing, it interfered with the Bank ; but Mr.
Curtis, governor of that establishment, turned them out somewhat uncer-

108

Nathan Meyer Rothschild.

emoniously ; and, when he afterwards failed in business, so great was his
unpopularity with those he had summarily dismissed, that the news of his
bankruptcy was received with three cheers by the members of the Stock
Exchange. It is impossible to give a fact more suggestive of the manners
of the men from whom so disgraceful a token of triumph emanated.

The great increase in the business of the foreign funds called for
additional space ; a room was, therefore, opened for the dealers ; and
from this arose the Foreign Stock Exchange, which for some years main-
tained a separate committee, chairman, and deputy-chairman. It now
forms part of the edifice known as the Stock Exchange.

The number of members varies. It has reached 1,000, it has de-
scended to 400, and it now numbers about 800.

CHAPTER XVI.

Sketch of the Life of Rothschild. Comes to England. Introduction of Foreign
Loans. Large Purchases. Anecdotes concerning Rothschild. His Difficul-
ties and Annoyances. His Death and Burial. Last Crisis on the Stock Ex-
change.

THE eminent abilities of Nathan Meyer Rothschild were inherited from
his father, who, educated for the synagogue, distinguished himself as a
financier, and, though engaged in the uncongenial sphere of a counting-
house, became a learned archaeologist. Frankfort, Berlin, Vienna, Lon-
don, Naples, and Paris, have alike witnessed the prescience of the money-
making Rothschilds ; and it is reported that the first great success of
Meyer Anselm, the father of the house, originated in the possession of
the fortune of the Landgrave of Hesse Cassel, which he saved from the
grasp of Napoleon, and which must have been to a commercial man of
the utmost importance.*

By his own report, Nathan Meyer Rothschild came to Manchester be-
cause Frankfort was too small for the operations of the brothers, although
the immediate cause was some offence to a customer ; and it is charac-
teristic of the intrepidity of the man, that, with scarcely any hesitation,
and with an absolute ignorance of the English language, he came to the
country in which he realized such great results. On Tuesday he told his
father he would go to England, and on Thursday he started. 'With
,20,000 he commenced his career ; and in a short time his capital was
trebled. At Manchester he soon saw there were three profits to be made,
in the raw material, the dyeing, and the manufacturing. It need

* " The prince of Hesse Cassel," said Rothschild, " gave my father his money.
There was no time to be lost ; he sent it to me. I had 600,000 arrive unexpectedly
hy post ; and I put it to such good use, that the prince made me a present of all his
wine and linen."

10 109

Rothschild Loan of 1819.

hardly be added, that his great mind had stomach for them all, and that,
having secured the three, he sold goods cheaper than any one else. This
was the foundation of that colossal fortune which afterwards passed into a
proverb ; and, in 1800, finding Manchester too small for the mind which
could grapple with three profits, Rothschild came to London. It was the
period when such a man was sure to make progress, as, clear and com-
prehensive in his commercial views, he was also rapid and decisive in
working out the ideas which presented themselves. Business was plenti-
ful ; the entire Continent formed our customers ; and Rothschild reaped
a rich reward.

From bargain to bargain, from profit to profit, the Hebrew financier
went on, and prospered. Gifted with a fine perception, he never hesitated
in action. Having bought some bills of the Duke of Wellington at a dis-
count, to the payment of which the faith of the state was pledged, his
next operation was to buy the gold which was necessary to pay them, and
when he had purchased it, was, as he expected, informed that " govern-
ment required it." Government had it, but doubtless paid for the ac-
commodation. " It was the best business I ever did ! " he exclaimed
triumphantly ; and he added, that, when the government had got it, it was
of rio service to them until he had undertaken to convey it to Portugal.

In 1812, Meyer Anselm, the head of the house, died at Frankfort. A
princely inheritance, unbounded credit, and solemn advice never to sep-
arate, were left to his four sons. From this period, Nathan Meyer
Rothschild was regarded as the head, though not the elder of the family ;
and skilfully did he support and spread the credit of the name. Previous
to the advent of Mr. Rothschild, foreign loans were somewhat unpopular
in England, as the interest was receivable abroad, subject to the rate of
exchange liable to foreign caprice, and payable in foreign coin. He
introduced the payment of the dividends in England, and fixed it in ster-
ling money, one great cause of the success of these loans in 1825.

Although Mr. Rothschild was commonly termed a merchant, his most
important transactions were in connection with the Stock Exchange. It
was here that his great decision, his skilful combinations, and his un-
equalled energy, made him remarkable. At a time when the funds were
constantly varying, the temptation was too great for a capitalist like Mr.
Rothschild to withstand. His operations were soon noticed ; and when
the money-market was left without an acknowledged head by the deaths
of Sir Francis Baring and Abraham Goldsmid, for the affairs of the
latter were wound up, and the successors of the former did not aim at the
autocracy of the money-market, the name of Nathan Meyer Rothschild
was in the mouths of all city men as a prodigy of success. Cautiously,
however, did the capitalist proceed, until he had made a fortune as great
as his future reputation. He revived all the arts of an older period. He
employed brokers to depress or raise the market for his benefit, and is
said in one day to have purchased to the extent of four millions.

The name of Rothschild as contractor for an English loan made its first
public appearance in 1819. But the twelve millions for which he then
became responsible went to a discount ; it was said, however, that Mr.
Rothschild had relieved himself from all liability before the calamity

110

The Crisis of 1825.

could reach him. From this year his transactions pervaded the entire
globe. The Old and the New World alike bore witness to his skill ; and
with the profits on a single loan he purchased an estate which cost
150,000. Minor capitalists, like parasitical plants, clung to him, and
were always ready to advance their money in speculations at his bidding.
Nothing seemed too gigantic for his grasp ; nothing too minute for his
notice. His mind was as capable of contracting a loan for millions, as of
calculating the lowest possible amount on which a clerk could exist.
Like too many great merchants, whose profits were counted by thousands,
he paid his assistants the smallest amount for which he could procure
them. He became the high-priest of the temple of Janus ; and the cou-
pons raised by the capitalist for a despotic state were more than a match
for the cannon of the revolutionist.* From most of the speculations of
1824 and 1825, Mr. Rothschild kept wisely aloof. The Alliance Life
and Fire Assurance Company, which owes its origin to this period, was
however, produced under his auspices ; and its great success is a proof
of his forethought. None of the loans with which he was connected were
ever repudiated ; and when the crash of that sad period came, the great
Hebrew looked coolly and calmly on, and congratulated himself on his
caution. At his counting-house a fair price might be procured for any
amount of stock which, at a critical time, would have depressed the pub-
lic market ; and it was no uncommon circumstance for brokers to apply
at the office of Mr. Rothschild, instead of going in the Stock Exchange.

He was, however, occasionally surpassed in cunning, and, on one occa-
sion, a great banker lent Rothschild a million and a half on the security
of consols, the price of which was then eighty-four. The terms on
which the money was lent were simple. If the price reached seventy-
four, the banker might claim the stock at seventy ; but Rothschild felt
satisfied that, with so large a sum out of the market, the bargain was
tolerably safe. The banker, however, as much a Jew as Rothschild, had
a plan of his own. He immediately began selling the consols received
from the latter, together with a similar amount in his own possession.
The funds dropped ; the Stock Exchange grew alarmed ; other circum-
stances tended to depress it ; the fatal price of seventy-four was reached ;
and the Christian banker had the satisfaction of outwitting the Hebrew
loan-monger.

But, if sometimes outwitted himself, there is little doubt he made others
pay for it ; and, on one occasion, it is reported that his finesse proved too
great for the authorities of the Bank of England. Mr. Rothschild was in
want of bullion, and went to the governor to procure on loan a portion of
the superfluous store. His wishes were met, the terms were agreed on,
the period was named for its return, and the affair finished for the time.
The gold was used by the financier, his end was answered, and the day
arrived on which he was to return the borrowed metal. Punctual to the
time appointed, Mr. Rothschild entered ; and those who remember his

* In 1824, it was said that public attention was so entirely absorbed by financial
operations, that the movements of Mr. Rothschild and a few London capitalists ex-
cited an intensity of expectation scarcely inferior to the march of armies.

Ill

Mr. RotJischild's Early Intelligence.

personal appearance may imagine the cunning twinkle of his small,
quick eye, as, ushered into the presence of the governor, he handed the
borrowed amount in bank-notes. He was reminded of his agreement,
and the necessity for bullion was urged. His reply was worthy a com-
mercial Talleyrand. " Very well, gentlemen. Give me the notes ! I
dare say your cashier will honor them with gold from your vaults, and
then I can return you bullion." To such a speech the only worthy reply
was a scornful silence.

One cause of his success was the secrecy with which he shrouded all
his transactions, and the tortuous policy with which he misled those the
most who watched him the keenest. If he possessed news calculated to
make the funds rise, he would commission the broker who acted on his
behalf to sell half a million. The shoal of men who usually follow the
movements of others, sold with him. The news soon passed through
Capel Court that Rothschild was bearing the market, and the funds fell.
Men looked doubtingly at one another, a general panic spread, bad news
was looked for, and these united agencies sunk the price two or three per
cent. This was the result expected ; and other brokers, not usually
employed by him, bought all they could at the reduced rate. By the
time this was accomplished, the good news had arrived, the pressure
ceased, the funds arose instantly, and Mr. Rothschild reaped his reward.*

But it was not an unvaried sunshine with this gentleman. There were
periods when his gigantic capital seemed likely to be scattered to the four
quarters of the globe. He lost half a million in one English operation ;
when the French entered Spain in 1823, he was also in the utmost jeop-
ardy ; but, perhaps, the most perilous position in which he was placed
was with the Polignac loan, although his vast intelligence again saved
him, and placed the burden on the shoulders of others. With this, how-
ever, he suffered greatly, as the price fell thirty per cent.

He had, also, other sources of apprehension. Threats of murder were
not unfrequent. On one occasion, he was waited on by a stranger, who
informed him that a plot had been formed to take his life ; that the loans
which he had made to Austria, and his connection with governments
adverse to the liberties of Europe, had marked him for assassination ;
and that the mode by which he was to lose his life was arranged. But
though Rothschild smiled outwardly at this and similar threats, they said,
who knew him best, that his mind was often troubled by these remem-
brances, and that they haunted him at moments when he would willingly
have forgotten them. Occasionally his fears took a ludicrous form. Two
tall, mustachioed men were once shown into his counting-house. Mr.
Rothschild bowed, the visitors bowed, and their hands wandered first in
one pocket, and then in another. To the anxious eye of the millionnaire,
they assumed the form of persons searching for deadly weapons. No
time seemed allowed for thought ; a leger, without a moment's warning,
was hurled at the intruders ; andj in a paroxysm of fear, he called for

* The intelligence of this gentleman was so good, that he was the first to announce
the Paris revolution of July to Lord Aberdeen, and the victory of Waterloo was
known to him some days before it was made public.

112

Mr. Rothschild's Habits.

assistance, to drive out two customers, who were only feeling in their
pockets for letters of introduction. There is no doubt that he dreaded
assassination greatly. " You must be a happy man, Mr. Rothschild,"
said a gentleman who was sharing the hospitality of his splendid home, as
he glanced at the superb appointments of the mansion. " Happy ! me
happy ! " was the reply. " What ! happy when, just as you are going to
dine, you have a letter placed in your hands, saying, ' If you do not send
me 500, I will blow your brains out ! ' Happy ! me happy ! " And
the fact, that he frequently slept with loaded pistols by his side, is an in-
direct evidence of a constant excitement on the subject.

The name of this gentleman, the entertainments given by him, the
charities to which he occasionally subscribed, and the amount of his
transactions in the money-market^ were blazoned abroad. Peers and
princes of the blood sat at his table ; clergymen and laymen bowed
before him ; and they who preached loudest against mammon bent low-
est before the mammon-worshipper. Gorgeous plate, fine furniture, an
establishment such as many a noble of Norman descent would envy,
graced his entertainments. Without social refinement, with manners
which, offensive in the million, were but brusque in the millionnaire, he
collected around him the fastidious members of the most fastidious aris-
tocracy in the world. He saw the representatives of all the states in
Europe proud of his friendship. By the democratic envoy of the New
World, by the ambassador of the imperial Russ, was his hospitality alike
accepted ; while the man who warred with slavery in all its forms and
phases was himself slave to the golden reputation of the Hebrew. The
language which Mr. Rothschild could use when his anger overbalanced
his discretion, was a license allowed to his wealth ; and he who, when
placed in a position which almost compelled him to subscribe to a press-
ing charity, could exclaim, " Here, write a check, I have made one

fool of myself!" was courted and caressed by the clergy, was feted and
flattered by the peer, was treated as an equal by the first minister of the
crown, and more than worshipped by those whose names stood foremost
on the roll of a commercial aristocracy. His mode of dictating letters
was characteristic of a mind entirely absorbed in money-making ; and his
ravings, when he found a bill unexpectedly protested, were translated into
mercantile language ere they were fit to meet a correspondent's eye. It
is painful to write thus depreciatingly of a man who possessed so large a
development of brain ; but the golden gods of England have many
idolaters, and the voice of truth rarely penetrates the private room of the
English merchant. Mr. Rothschild's was a character which may be
serviceably held up as a warning. There was, however, an occasional
gleam of humor in him, sternly as his thoughts were devoted to heaping
up riches. " I am as much as you," he said to the Due de Montmorenci,
when his title was granted ; " you style yourself the first Christian baron,
and I am the first Jew baron."

He was a mark for the satirists of the day. His huge and somewhat

slovenly appearance ; the lounging attitude he assumed as he leaned

against his pillar in the Royal Exchange ; his rough and rugged speech ;

his foreign accent and idiom, made caricature mark him as its own ;

10* 113

Death of Nathan Meyer Rothschild.

while even caricature lost all power over a subject which defied its ut-
most skill. His person was made an object of ridicule ; but his form and
features were from God : his mind and manners were fashioned by cir-
cumstances ; his acts alone are public property ; and by these we have a
right to judge. No great benevolence lit up his path ; no great charity
is related of him. The press, ever ready to chronicle liberal deeds, was
almost silent upon the point ; and the fine feeling which marked the path
of an Abraham Goldsmid, and which brightens the career of many of the
same creed, is unrecorded by the power which alone could give it pub-
licity. Dr. Herschel, indeed, said that Mr. Rothschild had placed some
thousands in his hands for the benefit of his poorer brethren ; but thou-
sands spent in a career of thirty-five years, by one who counted his gains
in millions, assume a narrow form. The Jewish code prescribed a tithe ;
but Jewish laws are often abrogated, when Jewish ceremonies are closely
followed.

At last the time arrived which proves a millionnaire to be a man. Mr.
Rothschild's affairs called him to Frankfort, and he was seized with his
last illness. The profession there could do nothing for him, and, scarcely
even as a last hope, Mr. Travers, the eminent surgeon, made a rapid
journey to see if English science could avail the dying Croesus. The
effort was vain, and the inevitable fate was well and worthily met. There
appears even a certain degree of dignity in his resignation to the last
struggle, and something touchingly manful in the wording of the will
which was to surrender to others the gold won by the sweat of his brain.
Breathing an almost patriarchal simplicity, it recommends his sons to
undertake no great transaction without the advice of their mother, of
whom he speaks with tender and even touching affection. " It is my
special wish that my sons shall not engage in any transaction of moment,
without having previously asked her maternal advice."

The first intelligence of his death was received by the same method
which had so often contributed to his success. Beneath the wings of a
pigeon, shot in sport at Brighton, were discovered the words " il est
mort" The intelligence created an intense sensation, as the uninitiated
were ignorant that his illness was dangerous, and calculations were plenti-
,ful as to the amount of his fortune. A greater tumult than had been
produced since the violent death of his predecessor, marked the pre-
cincts of the Stock Exchange, as it was impossible to tell the tendency of
his speculations, or what effect might be produced by his unexpected
demise.*

His remains were brought to England. The Austrian, Russian, Prus-
sian, Neapolitan, and Portuguese ambassadors assisted at his funeral ; and
his sons, who were deeply affected, attended him to his last resting-place.
The coffin which contained his massive remains was elaborately carved
and gorgeously ornamented, looking like some splendid piece of man's

* Mr. Salomons attributed the difficulties which followed his death to the sudden
withdrawal of the dexterity with which he managed the exchanges, as Mr. Rothschild
prided himself on distributing his immense resources, so that no operation of his
should abstract long the bullion from the Bank.

114

Loan to Portugal.

cunning, destined for the boudoir of a lady, rather than the damp of the
grave.

His children inherit his business ; but they do not inherit his position in
the stock-market. They are competitors for government loans; but,
though with the name remains a certain prestige of its former power,
they do not appear willing to entertain the extensive and complicated
business in the funds in which their father delighted.

The few anecdotes recorded of the gentleman whose life has been so
imperfectly sketched, form a portion of many which have been carefully
collected. A good life of Nathan Meyer Rothschild would be, to some
future Tooke, a complete and perfect key to the financial history of the
early portion of the nineteenth century.*

The last crisis in the Stock Exchange which it is the writer's purpose
to record was that memorable era, in 1836, when a convulsion scarcely
equalled in degree, though limited in its extent made bears and bulls
alike bankrupts.

For many years previous, the business of Capel Court had been de-
creasing. The attempts made to excite public feeling were insufficient to
produce much result. Consols remained without those great and sudden
movements so beneficial to the members ; little was done in shares ; and it
was remarked that the Stock Exchange had become a monetary dead sea ;
that the carriage seemed likely to be exchanged for the wheelbarrow ;
the breaking of credit for the breaking of stones ; and that, when the eagle
eye of the hungry broker and jobber looked round for dupes, all was barren.

At length the spell was broken. The attempt of Don Pedro to seize
the crown of Portugal afforded the members an opportunity of exercising
their vocation ; and it has been confidently said, that, long before a loan
was attempted, their money was employed in assisting the above ex-
pedition. Every art was used to blacken the character of Don Miguel.
Every trick was attempted to excite sympathy for Don Pedro. Private
memoirs were published, and anecdotes related. Truths were distorted,
and falsehood not unfrequently perpetrated. Paragraphs made their con-
stant appearance, in which " our ancient ally " was represented as suf-
fering from a most intolerable tyranny. Unbearable torture and insuffer-
able trials were the lot of the Portuguese people ; darkness and dungeons
the doom of the aristocracy. The Tagus was red with the blood of the
populace ; and the " tower of Belem," said a writer in Eraser's Mag-
azine, " emitted more doubtful and indescribable sounds than its pre-
decessor of Babel."

All these things tended to prepare the mind of the English capitalist.
But a further temptation was offered. The revenues of the kingdom
were portrayed in glowing colors. It was said that Don Miguel could,
but would not, pay the interest of the existing debt, and that Don Pedro
could and would. The scheme proved thoroughly successful. The note
of expectation being thus sounded, a band of men was engaged, vessels
were hired, and, with the aid of English money, English men, and Eng-
lish ships, Oporto was taken. The public mind was now ripe for a loan.

* For a Memoir of Rothschild, see the Bankers' Magazine, Vol. II. p. 473, et seq.

115

Fall in Spanish Stock.

The success was magnified, the achievement enlarged on, and ,800,000
were demanded on the security of some port-wine. The money was
lent ; Don Miguel fled to Rome ; and the young queen was installed in
his place. A further loan of two millions followed ; the interest was
difficult to pay, the dividends were capitalized, and great excitement per-
vaded the Stock Exchange at the rumors which were currently circulated.

But another important movement was going on in connection with
loans to Spain. The principal powers of Europe had agreed that Spain
and Portugal should assist each other in the expulsion from their respec-
tive territories of Don Carlos and Don Miguel, and that the other courts
should assist the belligerent parties. From this treaty arose an auxiliary
force raised in England to assist the youthful queen of Spain, and " The
British Legion " is yet named with derision. From the courts and from
the alleys of St. Giles's, from the town jail and from the rural workhouse,
came half-clad, wretched, and miserable beings, who preferred being shot
to being starved. Efforts to gain commissions were made by as motley a
crew. Youths from the counting-house and from the shop were assiduous
in endeavouring to attain them. Gentlemen with small incomes and no
knowledge of war put forward their pretensions ; and the officers were,
in their way, a match for the men.

With all these disadvantages, the legion secured the success of the
cause for which it fought ; and, after a series of battles, Don Carlos was
compelled to fly from the territory. A loan of course became advisable ;
and, although the interest on the previous debt could not be paid, it was
proposed to advance an additional four millions. It need scarcely be said
that, to procure this, promises were as plentiful as ever. The property
of the Church was to be confiscated, and the Church itself to be upset,
rather than not remunerate the bondholder. By means of deferred stocks,
active stocks, and passive stocks, bargains were concluded, and, for a
time, all was excitement in the foreign market. Every kind of security
became sought for ; however worthless, it had a price ; however value-
less, it found a buyer ; and the debts of states which had never paid one
dividend, which were scarcely in existence, and which had not any
revenue, advanced 100 per cent.

But the market became overloaded, and holders began to realize.
Every packet from abroad bore foreign securities, and the price drooped.
During the fever, Spanish Cortes stock, which in 1833 was 16|, was
forced to 72. Portuguese was done at 102, and every foreign stock rose
in proportion.

By May, 1835, the market became overloaded ; all were sellers ; the
price drooped ; and on the 21st the panic commenced. Spanish stock
fell at once sixteen per cent. ; the scrip went to three discount ; and the
lower the price, the more anxious were the holders to sell. Every one
grew alarmed ; and those who had bought as a permanent investment
parted with all their interest. Private gentlemen, who had been tempted
to buy, hurried with heavy hearts to their brokers ; and the Stock Ex-
change may be said to have groaned beneath the burden.

To add to the distress, the greatest holder turned bear ; and it is diffi-
cult to describe the confusion with which the market closed on the even-

116

Revulsion of 1835.

ing of the 21st of May. Some were rejoicing at their deliverance, though
suffering a large loss, while others were absolutely ruined. In many
panics there had been hope. They were known to be alarms which time
would rectify ; but there was no hope for the holder of foreign stock ; it
was worthless, and it was known to be worthless. Every one felt assured
that no dividend would ever be paid upon it ; and when this was remem-
bered, men cursed the fatuity which had led them to buy waste-paper,
and execrated the greediness which had lured them to ruin. Those
who the week before possessed securities which would have realized
hundreds of thousands, were reduced to bankruptcy. Brokers who had
kept to their legitimate business were defaulters ; most who had bought
for time were unable to pay their differences ; while respectable men,
who had laughed at speculation, and thought themselves too clever to be
taken in by companies, had ventured their all or? the faith of foreign
governments. Establishments were reduced, families were ruined, de-
licately-nurtured women were compelled to earn their bread. Death
ensued to some from the shock, misery was the lot of others, and frantic
confusion once more marked the alleys and the neighbourhood of Capel
Court. Consternation reigned paramount, and almost every third man
was a defaulter. All foreign securities were without a price ; the bank-
ers refused to advance money ; the brokers' checks were first doubted,
and then rejected ; nothing but bank-notes would be taken ; and, with a
desperation which will never be forgotten, the jobbers closed their books,
refused to transact any business, and waited the result in almost abject
despair. The stocks bore no price, the brokers ceased to issue their
lists, and the blackboard was found inadequate to contain the names.
Differences to the amount of ten millions were declared ; and the entire
wall would have been insufficient to contain the names. The practice
was, therefore, dispensed with, and an additional time allowed to settle
the accounts.

To mitigate the evil, the principal holders of foreign securities formed
themselves into a society to purchase all stock below forty ; but it was
found inadequate to meet the catastrophe in the house, while out of it the
excitement in Spanish, Portuguese, and other foreign funds created evils
which never met the public eye, but which are yet felt by innumerable
private families.

During this period, the Royal Exchange, previous to the assembling of
the merchants, witnessed a curious scene, and beheld a motley group of
speculators ; and, says Mr. Evans, in his work on the city, such was the
rage for shares in companies which had arisen out of the general excite-
ment, that the beadle was obliged to drive them away, as the frequenters
of 'Change could not get to their places. In the height of this specula-
tion, some of the dabblers made a price of one farthing per share on a
railway now promising to be the first in the kingdom, but of which there
were then no buyers.

With the above panic the present chronicle of the Stock Exchange
closes. To have brought it to 1849 would have involved living men and
their actions, and to some future historian must be left the many whose
names assume so important a position in English financial history.

117

The Stock Exchange in 1761.

CHAPTER XVII.

Legends of the Stock Exchange. Mr. Duribar. Duke of Newcastle. French
Ambassador. James Bottand. Extraordinary Incident. Fortunate Adven
ture. Morals and Manners of the Stock Exchange. Its Constitution and
Arrangements.

THE early part of the present chapter is devoted to anecdotes, which,
though difficult to prove, yet bear in themselves every appearance of
reality. Many legends are thus in the debatable ground between truth
and fiction ; and those which are selected are chosen from their resem-
blance to fact, rather than from the actual knowledge of their veracity.

In 1761, Mr. Dunbar, a West-Indian merchant, finding his affairs were
less prosperous than usual, sought " the Alley," as it was then termed, to
retrieve his failing fortunes. From some private information, he believed
that he had good grounds for supposing a peace would soon be effected,
and that the funds would rise. He therefore ordered his broker to buy
100,000 for the account ; told him the opinion he had formed, with the
intelligence on which it was based ; and the latter, in violation of his
oath, jobbed extensively on his own account as well as for his client.
February passed away without the expected peace, and Mr. Dunbar paid
the difference. Confident in his views, he continued the operation ; but
each account-day proved that the price had been against him, and with
great difficulty did he find money to pay the amounts due. In July,
unable to pay cash, he gave notes of hand to the broker, who agreed to
receive them. No objection being made, the account was continued on
for August. In that month the prospect of peace revived, the funds rose,
and Mr. Dunbar, seeing a chance of paying the greater part of his losses,
went with all speed to 'Change Alley. His distress may be imagined,
when he was coolly told, that, since he had given notes of hand, no ac-
count had been opened, and no advantage could be reaped from the rise
in price. The act of Sir John Barnard rendered any appeal to law use-
less ; but, as Mr. Dunbar became a bankrupt, the members of the Stock
Exchange subscribed to pay the amount claimed, in order that so flagrant
a case might not become public.

One of the loans raised by the Duke of Newcastle, when prime minis-
ter, fell, from some unforeseen accident, to three per cent, discount.
His Grace, thinking he had made an unfair bargain, or fearing the job-
bers would not lend to him again, convened a meeting of those who had
taken it, who, as well as the Duke, were greatly frightened, not knowing
what project to adopt. At length one of them said to be Samson
Gideon desired the minister to walk with him into another room.
There they remained for a few minutes, and then returned in high spirits,
telling the others to go home and be perfectly easy, as care should be
taken of their interest. Gideon went immediately to 'Change Alley,

118

Count de Guise.

and, buying up the scrip as fast as it was offered, produced an immediate
rise to one per cent, above par.

Gambling in the funds has not been confined to commoners ; and the
French ambassador at the Court of London was guilty of a deception
which marks the name of the Count de Guise with infamy. Availing
himself of his political position, he traded in English securities, and, by
the aid of his secretaries, made large sums. While success attended the
ambassador's operations, he received the profit, and rejoiced in his good
fortune ; but when a long run of bad luck dissipated his gains, and made
demands upon his purse, his Excellency denied all knowledge of the
transaction, refused to pay the balance, retired to France, and com-
menced a prosecution against his subordinates. But this was not suf-
ficient to exonerate him with thinking people. A memorial was pub-
lished by his secretaries ; and the evidence they gave satisfied every
impartial mind that the ambassador of the Most Christian King had abused
his trust, duped his dependents, and defrauded the stock-broker.

About the middle of the eighteenth century, one of the constant deal-
ers in 'Change Alley, although in a small way, was James Holland ; a
man of low extraction, but of great mind, of immense impudence, and
unrivalled crime. There was nothing at which he would hesitate to
obtain money, to spend on the Stock Exchange ; and, having once com-
menced, he soon found that the legitimate profits of his trade that of
a butcher were not sufficient to support him. He formed, therefore,
a wooden weight, which, resembling one of fifty pounds, weighed only
seven pounds ; and, in his capacity of tradesman to St. Thomas's Hos-
pital, employed his roguery with great success.

From butcher he turned sheriff's officer, revived every past iniquity,
invented new frauds, and spent his money in buying lottery-tickets, to
which pursuit he was passionately attached. He robbed the broker whom
he employed, alike of his mistress and his money ; and with the latter
bought the place of city marshal. The citizens, however, discovered
that his character was scarcely equal to his impudence, and refused to
maintain their bargain.

Every moment he could spare was passed on the Stock Exchange,
where his pursuits were marked by a singularly bad fortune. Every
speculation went against him ; he never drew a prize in the lottery ; and,
finding there was a chance of his becoming penniless, he added forgery
to his long list of crimes. The fraud was discovered, the penalty was
paid at Tyburn ; and James Bolland adds another to the many proofs of
the truth of the old adage.

A century ago was the hanging century ; and a great fraud was com-
mitted towards its close on the East India Company. The leading wit-
ness the only witness who could prove the guilt of the accused was
accustomed to visit a house in the neighbourhood of the Bank, to be
dressed and powdered, according to the fashion of the day. Shortly
before the trial came on, a note was placed in his hands, informing him
that the attorney for the prosecution was desirous of seeing him, at a cer-
tain hour, at his private residence, in or near Portland Place.

At the time appointed, the witness proceeded to the house ; the door

119

The Blackboard.

was opened, and the footman, without asking his name, ushered the
visitor into a large room, where, discussing some wine upon the table, sat
a group of gentlemen, in earnest conversation. " There is a mistake,"
exclaimed the new-comer, thinking he had been shown into the wrong
room. " No mistake, Sir," interrupted one, in a determined tone, while
the remainder sat quietly, but sternly, by. Unable to comprehend the
scene, and, in some alarm, the visitor prepared to leave the room. " There
is no mistake," repeated the same person, unostentatiously stepping be-
fore the door. " I am," he continued, " brother to that gentleman who
is to be tried for forgery, and against whom you are the chief witness.
Without your evidence he cannot be convicted ; the honor of a noble
house is at stake ; and your first attempt to escape will lead to a violent
death. There is nothing to fear, if you remain quiet ; but all whom you
see are sworn to detain you until the trial be over, or," he added, after a
pause, " to slay you." The witness was a sensible man ; he saw the
determined looks of those around, and thought it best quietly to acquiesce.

In the mean time great surprise was excited in the city. That the
missing man had been inveigled away was universally believed ; and
every endeavour was made to track him. Whether the calmness with
which he bore his confinement deceived his jailers is not known ; but it
is certain that he effected his escape from the house, although not so
securely but that his captors were after him before he could get out of
sight. A mob collected ; his pursuers declared he was an insane noble-
man, and that they were his keepers. The mob shouted with delight at
the idea of a mad lord ; and the unfortunate man was on the point of
being again confined, when a chariot drove up. The inmate, a lady, de-
sired the coachman to stop, and listened to the counter statements of the
pursued and his pursuers. Remembering the current story of a missing
witness, she opened the carriage, he sprung in, the door was closed, and
the lady, to whom he told his story, ordered her coachman to drive
with all speed to the Old Bailey. It was the last day ; the case, which
had been postponed, was being tried ; and the missing witness was just
in time to place the rope around the neck of the unhappy forger.

In the memorable year 1815, a member of the Stock Exchange found
that, notwithstanding all his exertions to save his credit, his name stood
every chance of gracing that blackboard on which so many appeared
during the eventful period. Melancholy and meditating, he wandered
forth, scarcely knowing the direction which he took, until from London
Bridge he gazed gloomily upon the " dark flowing river," half doubting
whether its depths would not be his best abiding-place. In this mood he
was hastily greeted by a voice he knew ; and, turning round, was rapidly
informed of news which at once turned his thoughts back to that world he
had felt inclined to quit. The stranger had just arrived from the spot
where the great battle of modern history had been fought ; and the
ruined jobber become the depositary of a secret which at once re-
stored his spirits. Hastily learning all the particulars which might affect
him, he retraced his steps, found the price unaltered, and the news,
therefore, unknown. Without hesitation, he made large purchases of
stock. All that was to be procured he bought ; and, as the secret which

120

Morals of the Stock Exchange.

had that morning sent him gloomily away was not even guessed, he was
able to purchase very largely. He availed himself of his opportunity ;
and ere long had cause to congratulate himself on his good fortune, as,
when the news arrived, the price rose sufficiently to clear all his difficul-
ties, and leave him a profit of 20,000.

The morals and the manners of the Stock Exchange are difficult to
treat. Morals too often fade before money-making ; and manners are
regarded as unnecessary in the same eager pursuit. Nor is Capel Court
an exception. When the fate of a jobber depends on the turn which
the market may take, when sorrow or success hangs upon a word,
when family, friends, and fortune are in the balance, and a rumored
falsehood may sink or save, it is not in humanity to resist the tempta-
tion ; and it has, unhappily, become too general a practice to stop at no
invention, and to hesitate at no assertion, which may assist the inventor.
From this cause the Stock Exchange is rarely mentioned with that respect
which it merits, as the theatre of the most extensive money transactions
in the world. Public opinion punishes the many for the few. The great
mass of its members have not power to disseminate an untruth. The
brokers, bound not to speculate on their own account, have no interest in
doing so ; the small jobber cannot influence the price ; many are too high-
minded to avail themselves of dishonorable methods ; and it is, therefore,
to a particular class that the Stock Exchange owes its false reports, its
flying rumors, and its unenviable notoriety. Capel Court is, indeed, a
complete anomaly. There are men of high character and station in its
body ; there is every endeavour made by its executive to abolish all which
tends to make it despicable ; the greatness of its dealings are unequalled ;
some of its members are members of the senate ; others are honorable in
spite of the temptations which surround them ; it is consulted by chan-
cellors, and taken into the councils of ministers ; peace or war hangs upon
its fiat ; and yet the Stock Exchange is seldom named, out of the city,
but with contempt ; and a Stock Exchange man is, like the moneyed man
in the early reign of William, despised by the landed, and looked down
upon by the mercantile, aristocracy. One reason, perhaps, for this is,
that the great mass of their transactions are without the pale of the law.
All their time-bargains and the Stock Exchange might close to-morrow
if these were abolished are illegal. They are, strictly speaking, gam-
bling dealings, which our judicature refuses to recognize ; and the dealers
are gamblers, whom the legislature will not acknowledge.

The tricks which are resorted to are numerous. The penniless spec-
ulator can enter into transactions which may retrieve his fortunes, or con-
solidate his ruin. It is said to be a not uncommon trick for two persons
to agree together in the following manner : one buys and the other
sells for the account to the largest amount for which each can procure
credit. One must lose, and the other must gain. One becomes a mii-
lionnaire, the other a defaulter. The former receives a large amount, the
latter is declared on the blackboard. A division of the spoils is after-
wards privately effected ; and the gainer pursues his avocation in the
funds, while the loser becomes a prosperous gentleman.

The public cannot be too decidedly warned against the dangers to which
11 121

Manners of the Stock Exchange.

they may be exposed in legitimate transactions. On one occasion, a mer-
chant having requested his broker to purchase a certain amount of stock,
and having concluded the business, was surprised in the evening to hear
his broker announced as a visitor. Some remark being made, the latter
stated that a dispute had arisen with the jobber about the price which was
in the receipt, and he should be glad to take it with him as an evidence
of his correctness. Knowing that a stock receipt is in itself of no value,
the buyer readily complied. His visitor thanked him, and from that mo-
ment was never heard of. The receipt was false, th,e names were forged ;
and, secure in the possession of all evidence against him, the broker
sought a foreign land in which to enjoy his unrighteous gains.

If the morals of the Stock Exchange be as described, its manners are
as curious. It is not long since the papers reported a limb broken in
sport. The writer has perused in the journals occasional duels which
have arisen from the " fun " of the members ; and the courtesies of life
are wanting if a stranger ventures among them. When this is the case,
instead of the bearing of gentlemen, the first discoverer of the intruder
cries out, " Fourteen hundred fives ! " and a hundred voices reecho the
cry. Youth or age is equally disregarded ; and the following description
of what occurred to an unhappy visitor will attest the truth of that which
has been asserted :

" Not long ago, a friend of my own, ignorant of the rule so rigidly
enforced for the expulsion of strangers, chanced to drop in, as he phrased
it, to the Stock Exchange. He walked about for nearly a minute without
being discovered to be an intruder, indulging in surprise at finding that
the greatest uproar and frolic prevailed in a place in which he expected
there would be nothing but order and decorum. All at once, a person,
who had just concluded a hasty but severe scrutiny of his features, sent
out, at the full stretch of his voice, 4 Fourteen hundred.' Then a bevy
of the gentlemen of the house surrounded him. l Will you purchase any
new Navy five per cent., Sir,' said one, eagerly, looking him in the

face. ' I am not ' ; the stranger was about to say he was not

going to purchase stock of any kind, but was prevented finishing his sen-
tence by his hat being, through a powerful application of some one's
hand to its crown, not only forced over his eyes, but over his mouth also.
Before he had time to recover from the stupefaction into which the sud-
denness and violence of the eclipse threw him, he was seized by the
shoulders, and wheeled about as if he had been a revolving-machine.
He was then pushed about from one person to another, as if he had only
been the effigy of some human being, instead of a human being himself.
After tossing and hustling him about in the roughest possible manner,
denuding his coat of one of its tails, and tearing into fragments other
parts of his wardrobe, they carried him to the door, where, after de-
positing him on his feet, they left him to recover his lost senses at his
leisure."

In a graphic picture of the Stock Exchange, drawn by one who had
every opportunity of testing its truth, the following will confirm the above
description, and affords an interesting evidence of the civilization of the
Stock Exchange in 1828 :

122

Treatment of Intruders.

" I turned to the right, and found myself in a spacious apartment,
which was nearly filled with persons more respectable in appearance than
the crew I had left at the door. Curious to see all that was to be seen, I
began to scrutinize the place and the society into which I had intruded.
But I was prevented from indulging the reflections which began to sug-
gest themselves, by the conduct of those about me. A curly-haired Jew,
with a face as yellow as a guinea, stopped plump before me, fixed his
black, round, leering eyes full on me, and exclaimed, without the slight-
est anxiety about my hearing him, i So help me Got, Mo, who is he ? '
Instead of replying in a straightforward way, Mo raised his voice as
loud as he could, and shouted with might and main, ' Fourteen hundred
new fives ! ' A hundred voices repeated the mysterious exclamation.
4 Fourteen hundred new fives ! ' ' Where, where, fourteen hundred
new fives, now for a look ; where is he ? Go it, go it ! ' were the
cries raised on all sides by the crowd, which rallied about my person like
a swarm of bees. And then Mo, by way of proceeding to business, re-
peating the war-cry, staggered sideways against me, so as almost to
knock me down. My fall, however, was happily prevented by the kind-
ness of a brawny Scotchman, who, humanely calling out, l Let the mon
alone,' was so good as to stay me in my course with his shoulder, and
even to send me back towards Mo with such violence, that, had he not
been supported by a string of his friends, he must infallibly have fallen
before me. Being thus backed, however, he was enabled to withstand
the shock, and to give me a new impulse in the direction of the Scotch-
man, who, awaiting my return, treated me with another hoist as before,
and I found these two worthies were likely to amuse themselves with me,
as with a shuttlecock, for the next quarter of an hour. I struggled vio-
lently to extricate myself from this unpleasant situation, and, by aiming a
blow at the Jew, induced Moses to give up his next hit, and to allow me
for a moment to regain my feet.

" The rash step which I had taken was likely to produce very formid-
able consequences. All present were highly exasperated. The war
became more desperate than ever. Each individual seemed anxious to
contribute to my destruction ; and some of their number considerately
called out, ' Spare his life, but break his limbs.'

" My alarm was extreme ; and I looked anxiously round for the means
of escape.

" ' You ought to be ashamed of yourself to use the gentleman in that
sort of way,' squeaked a small, imp-like person, affecting sympathy, and
then trying to renew the sport.

" ' How would you like it yourself,' cried another, ' if you were a
stranger ? ' shaking his sandy locks with a knowing look, and knocking
off my hat as he spoke.

" 1 made a desperate blow at this offender. It did not take effect, from
the expedition with which he retreated, and I had prudence enough to
reflect that it would be better to recover my hat than to pursue the enemy.
Turning round, I saw my unfortunate beaver, or ' canister,' as it was called
by the gentry who had it in their keeping, bounding backwards and for-
wards between the Caledonian and his clan and the Jew and his tribe.

123

Rules of the Stock Exchange.

" Covered with perspiration, foaming with rage, and almost expiring
from heat and exhaustion, I at last succeeded. I did not dare to reinstate
it, but was forced to grasp it with both hands, in order to save what re-
mained of it. I baffled several desperate snatches, one of which carried
away the lining, and was now trying to keep the enemy at bay, afraid
again to attack the host opposed to me, but not knowing how to retreat,
when a person who had not previously made himself conspicuous ap-
proached and interfered. ' Really, you had better go out ' ; at the same
time pointing to a door I had not seen before."

Comment is unnecessary ; and, however the practice may be repu-
diated by the members when out of the house, there are few who would
not, in it, act in a similar disreputable mode.

The constitution of the Stock Exchange is simple. Governed by a
committee of twenty-eight, with a chairman and deputy-chairman, an-
nually elected by the members, their power to expel, suspend, or repri-
mand is absolute ; their decision final ; and that decision, adds one of the
rules, " must be carried out forthwith." In cases of expulsion, the com-
mittee should not consist of less than twelve ; and of these, at least two
thirds must concur in the sentence. No bill or discount broker, no clerk
in any public or private establishment, excepting those to the members
of the Stock Exchange, no one in business, either in his own name
or in that of his wife, can be received as member. Every applicant
must be recommended by three members of two years' standing, who
must each give security for <300 for two years. The committee meets
every alternate Monday, at one o'clock ; but a special meeting may at
any time be called by the chairman and deputy-chairman, or by any five
members. Brokers and jobbers, or dealers, as they are politely termed,
are not allowed to enter into partnership ; and, when a defaulter is ex-
cluded, his clerk is excluded with him.

Directly the books are closed at the Bank of England, the price of
stocks, excepting only bank stock, is quoted without the dividend.

When a defaulter, or one who cannot or will not pay the just claims
on him, is posted, a libel is avoided by the following words: " Any
person transacting business with A. B., is requested to communicate with
C. D."

The rules of the Stock Exchange amount in number to 159, and are
calculated to meet every difficulty. The charge to the public for buying
and selling English stock is 2s. 6d. per cent. ; and the following, taken
from the third edition of Mr. Robinson's valuable " Share Tables," is the
commission on shares :

Under the value of 5
Amounting in value to 5, and under 20 .
" 20, " 50
" " 50 and above .

s. d.
. 1 3 per cent.
26 "
.50 "
. 10 "

The terms used on the Stock Exchange have been in vogue for more
than a century ; and the origin of many may be traced to the early
transactions in the stock of the East India Company. Buying for the

124

Life Assurance.

account has been described ; but " bull " and " bear," " backardation "
and " continuation," are understood only by the initiated.

" Bull " is a term applied to those who contract to buy any quantity of
government securities, without the intention or ability to pay for it ; and
who are obliged, therefore, to sell it again, either at a profit or loss, be-
fore the time at which they have contracted to take it.

" Bear " is a term applied to a person who has agreed to sell any
quantity of the public funds, of which he is not possessed, being, how-
ever, obliged to deliver it against a certain time. -

" Lame Duck " is applied to those who refuse or are unable to fulfil
the contracts into which they have entered.

" Backardation " is a consideration given to keep back the delivery of
stock, when the price is lower for time than for money.

" Continuation " is a premium given when the price of funds in which
a person has a jobbing account open is higher for time than for money,
and the settling day is arrived, so that the stock must be taken at a dis-
advantage. In this case a percentage is paid to put off the settlement,
and continue the account open.

" Jobber " is applied to those who accommodate buyers and sellers of
stock with any quantity they require. The dealer or jobber's profit is
generally one eighth per cent.

The " Broker " is the person employed by the public to sell or pur-
chase stock at a certain percentage.

" Omnium " is a term used to express the aggregate value of the differ-
ent stocks in which a loan is usually funded.

" Scrip " is embryo stock, before the whole of the instalments are paid.

CHAPTER XVIII.

Life Assurance. Its Benefits. Its Commencement. Suicide of an Insurer.
Insurance of Invalid Lives. The Gresham. Sketch of the West Middlesex
Delusion.

THE day on which the first life-assurance office was established is
worthy of remembrance by the great mass of the middle class. Faulty
in construction, and erroneous in detail, it was the enunciation of a great
principle, the birth of a great blessing. Innovations were not made in
the eighteenth, any more than in the nineteenth century, however, with-
out opposition ; and when, in 1706, the Amicable commenced business,
prophets were plentiful in declaring it must fail, while others announced
that it would open the door to gambling, and was flying in the face of
Providence. But the excellence of the principle triumphed ; and, al-
though one uniform rate prevailed for the sick and for the sound, for the
old and for the young, the Amicable succeeded. The pale face of the
11* 125

Suicide of a Policy Holder.

invalid was no objection ; the purple hue of him who fared sumptuously
was no preventive. The man on the brink of the grave, and the youth
on the verge of manhood, paid the same premium ; and for 5 per cent,
per annum, and 1 10s. per cent, entrance-money, every one was en-
abled to insure his life. Such was the primitive plan of the first life
association.

The London Assurance and Royal Exchange corporations followed, in
1720. In 1762, the Equitable was established ; and, although a trifling
progress was made, the clumsy plan of equal payments, without reference
to years, was perpetuated, and five per cent, paid by all. When, how-
ever, the rates were varied in proportion to age, when sick men were
rejected, and only the healthy taken, a step was made in the right direc-
tion ; and life assurance began to flourish with a vigor which astonished
even its promoters.

It is believed that England is the only state in which the insurance of
lives has never been prohibited. The Dutch, a commercial people, re-
fused to legalize it until a recent period ; and in France it was long
deemed unlawful, " because it is an offence against public decency to
set a price upon the life of a freeman, which is above all valuation."
Another great objection was the fear that individuals might destroy them-
selves to enrich their families ; and though this exaggerated view of the
case is provided for in modern policies, yet the following anecdote will
prove that the fear was not altogether groundless. So early as the
middle of the eighteenth century, the clause which excluded the repre-
sentatives of suicides from a participation in the amount insured excited
attention ; and an office was established, which, for a corresponding
increase of premium, paid the amount to the relatives of the self-mur-
derer. One man, deeply in debt, wishing to pay his creditors, and not
knowing how, went to the office, insured his life, and invited the insurers
to dine with him at a tavern, where several other persons were present.
After dinner he rose, and addressing the former, said, " Gentlemen, it
is fitting you should know the company you have met. These are my
tradesmen, whom I could not pay without your assistance. I am greatly

obliged to you ; and now " Without another word he bowed, pulled

out a pistol, and shot himself.

The number of insurances was, at first, necessarily very limited ; the
mode in which the directors transacted business, the premiums they re-
quired, the determination to take none but lives which were almost faultless,
the pernicious plan of occasionally resisting the payment of policies, the
absence of much opposition, all tended to reduce the business. When,
however, the capital of the country increased, and men looked earnestly
about them for new modes of investment, the profits and the principles of
life assurance were anxiously investigated, its demands inquired into, its
difficulties overcome ; and though from 1706 to 1806 nine offices had
been found sufficient, yet from 1806 to 1846 the desire spread so rapidly,
that no less than one hundred and eleven were established. In 1820,
there were only twenty offices in the United Kingdom ; in 1830, their
number was exactly doubled ; in 1840, they had again doubled ; and from
1840 to 1845, they increased in the same proportion,

126

The Indisputable Company.

The success which has attended these companies has induced capital-
ists to invest their money in similar schemes, and the result has been,
that during every period of excitement new associations have been
started, with new claims to patronage. Those claims were put prom-
inently forward to benefit themselves ; and life assurance companies
cannot greatly benefit their promoters without benefiting others. The
constant advertisements, the names of their directors, the statement
of their terms, the peculiarity of their constitution, pressed upon general
attention, the public mind gradually became possessed with the idea that
life insurances were for every class, and business increased. Every ob-
jection was met, every demand grappled with ; and there is now, prob-
ably, not a man in London who cannot, in a smaller or greater degree,
provide for those he may leave behind. The principal offices were
proprietary ; and the entire gain went to the shareholder. But the in-
surers began to see that the profits made by a corporation might as well
be made by themselves ; and companies which joined the proprietary
with the participating principle followed. Another movement was that
which divided the entire profits among the assured, reducing the premium
as the company prospered ; and so thoroughly is the value of life under-
stood, that a society, commencing on this plan, with fair premiums and
fair management, is as safe as a company with a capital of half a million.

But there were other difficulties to be met, as a pernicious plan ob-
tained of disputing the payment of policies when the life fell in, on trivial
and often unjustifiable grounds ; the advantages of the system being
greatly reduced owing to the desire for gain of the proprietary offices.
To meet this, a society is now established, termed the Indisputable, which
holds the policy inviolable when once granted.

There still remained one class for whom life assurances were unavail-
ing. The anxiety for profits of the companies, the determination to
divide good dividends, the extreme desire to take none but unexception-
able lives, produced an evil, at first view, irremediable. The stringent
regulations, the declarations required, the personal examination, and the
private inquiry, produced an unhappy effect. Average lives were de-
clined, and for him whose health was not perfect, there was no chance.
The healthy, but nervous man, whose pulse, when examined, beat like a
steam-engine, was very often refused ; and stories of rejected applicants,
which speak volumes, are prevalent. One gentleman was declined be-
cause he was deaf, as he ran more risk of being run over. Another was
refused because he had been three times bankrupt, and his system might
have suffered. A third was too full of health, and might die of apoplexy.
A fourth was deficient, and might die of decline. The old companies
were absolutely determined to take no life but what was unexceptionable.
The consequence was, that men in rude, robust health, if blind in one
eye, or deaf with one ear, were often rejected ; and there are innumer-
able instances of the refused party living to a good old age ; while cases
are not wanting, in which, after outliving doctor, actuary, and half the
board of directors, the very man who, thirty years before, was refused
at any price, was gladly taken by the same company at the ordinary
premium.

127

Insurance of Diseased Lives.

The possessor of sound health, who has provided for his family, cannot
comprehend the misery occasioned to the invalid by the conviction that
his application will be rejected ; and in a country where men labor long
in an impure atmosphere, there are too many whose lives are early dam-
aged. To these, every allusion to life assurance was an agony ; and it is
difficult to enter thoroughly into the distress of him who knew he would
die penniless, when a sudden sickness possessed him. Unnerved both
mentally and physically, he saw his last hour approach. Loathing the
trifling luxuries which sustained him, because they would impoverish his
family ; dreading the footsteps of the physician, as he thought of his fee ;
the love of his wife was no comfort, the voices of his children no pleas-
ure ; for he knew that his death would leave them to public or private
charity. Such was the position of the individual rejected by a life office.

But even this want has been responded to. Many offices now profess
to take invalid lives at an increased premium ; and two are really devoted
to this particular risk. The Invalid and Medical Life Assurance Com-
pany first began, and was successful ; and the Gresham, lately estab-
lished, has proved that the class for which it is specially intended is
numerous. Much may depend upon the judgment of the medical officer ;
but so great is the anxiety to insure, that the premium is of less im-
portance to the insured than in ordinary cases, and the office is able to
protect its interest. The idea has been supported and approved by
actuaries generally. The success of the Gresham is a proof of its merit.
Every man of feeling must cordially agree in the principle ; and the
speech of Mr. Marshall, cashier to the Bank of England, is one of many
proofs that the insurance companies, a quarter of a century ago, were
ignorant of their own interests.*

" I myself," said that gentleman, " fell under the class of declined
lives, and for the whole of my life have been deprived of the advantages
which are offered by life assurances. One-and-thirty years ago, I had the
misfortune to break a bloodvessel in my lungs, and had I proposed to
any office, that fact, as an honest man, I must have stated, and that state-
ment would have caused my rejection. From that time to this I have
enjoyed perfect health, and I stand before you this evening, a strong and
healthy man, a living example of the value of this society, and I present
to you a fact, to show that this is likely to be a profitable investment."

Another society deserves notice, from its admirable plan of uniting a
benevolent principle with the benefit derivable from life assurance, and
from its addressing a class, to the families of which life assurance is the
only barrier against absolute poverty. That class has been hitherto but
little thought of, though there is none on whom it would be better be-

* The writer can add his personal testimony to the necessity of some such office.
Twenty years ago, he suffered similarly to Mr. Marshall, and has since been debarred
from the benefit of life assurance, although in possession of good average health.
There are a thousand other cases ; and the fact that the Gresham gradually increases
in business, and has in the first year granted policies to the amount of > 150,000, pro-
ducing nearly 6,000 yearly, is very suggestive of the public requirements. The
fact, also, that in such a company no death has occurred during the first twelve
months, is honorable to the skill of its medical officer.

128

Fraudulent Companies.

stowed, than on the clerks of England. Industrious, faithful, and intel-
ligent, they are almost compelled, by virtue of their position, to maintain
an appearance beyond their means. With incomes which just enable
them to pay their debts, and which provide for no contingencies, they are
to a great degree incapacitated from insuring their lives ; and solacing
themselves, therefore, with the idea that a small insurance would be of no
avail, they feel that they cannot afford a great one. To this class, there-
fore, a society which specially provides for its wants is a great benefit ;
and a kindly feeling between the clerk on the one side, and his superior
on the other, is encouraged, to the advantage of both, through the Prov-
ident Clerks' Mutual Life Assurance Association.

Many instances might be given of the value of this society ; and the
writer trusts that the few lines in which he has honestly and earnestly
indulged, for the sake of pointing attention to those offices which he
deems deserving notice, may be regarded in the light in which they are
written.

The cause of life assurance has occasionally received severe blows ;
and though, perhaps, less fraud has been attempted in these than in other
companies, yet there is one instance of deception, so boldly planned and
so successfully executed, as to stand out in strong relief in the history of
life assurance.

About the year 1837, the provincial papers were filled with advertise-
ments, drawing attention to the peculiar claims of the Independent West
Middlesex Life and Fire Assurance Company. Its capital was stated to
be one million ; it was declared to be a legal corporation ; and Acts of
Parliament, dated from 1696, were boldly quoted. Cautiously did the
promoters proceed in the metropolis, where they did not at first advertise,
contenting themselves with establishing agencies in various parts of the
country, and publishing advertisements in country papers. An imposing
array of names as directors, declared to be of the first character and
respectability, was promulgated ; and when such names as Drummond
and Perkins appeared in the list, the uninitiated believed the one to be the
great banker, and the other the rich brewer, bearing the same names.
To add to the delusion, the Bank of England was advertised as their
bankers ; and when they opened handsome premises in London, Dublin,
Edinburgh, and Glasgow, the minds of the many were thoroughly delud-
ed. Some notion may be formed of their intention from the fact, that
they not only insured lives on smaller premiums than other offices, but
gave larger annuities for smaller sums. According to their tables, a man
of thirty, by paying 100, could obtain 8 yearly, and could insure his
life at 1 15s. per cent.; thus making a clear interest of 6 5s. per
annum.

The deed of the company for, strange to say, it had a deed was
signed by any one who chose ; and the law-stationer applied indiscrim-
inately to all who came near him. Any one who asked for a situation
was made a governor. A schoolmaster, who requested a clerkship, was
made a director. An errand-man was employed as manager. A boy of
sixteen was appointed to a seat at the board. One director had been
tapman to a London tavern ; another had been dismissed from his employ

129

Mr. Mackenzie's Developments.

as a journeyman bell-hanger ; a third had been a gentleman's servant ;
all had orders to dress well, to place rings on their fingers, and adorn
their persons with jewelry ; fines being instituted if they omitted to wear
the ornaments provided.

The advertisements which blazoned the pretensions of the company,
the puffing to which they resorted, the declaration that they had taken
,40,000 in one year, together with the terms they offered, attracted that
numerous class determined to get every thing cheap. Premiums to a
large amount were procured by them, and they prospered.

The attention of the established assurance offices had long been drawn
to these transactions ; and it was known that a great crash must one day
come ; but they had not sufficient courage to declare the iniquity. It was
left, therefore, to individual energy to expose their doings, and to indi-
vidual resources to support the consequences. In March, 1839, Mr. Peter
Mackenzie, editor and proprietor of the Scotch Reformers'' Gazette, hav-
ing investigated the question, and made careful inquiries which satisfied
him of the nature of the company, commenced a series of articles in that
paper, warning the public against transacting business with them. The
task was difficult and dangerous ; but it was boldly met, and skilfully
supported. The following extracts from the journal of Mr. Mackenzie
will show the earnest spirit in which he grappled with his task :

" In a word, we raise our voice and warn the public to beware of this
so-called Independent West Middlesex Insurance Company." " It is a
false and fictitious company." " No better than a parcel of tricksters in
London, disowned, repudiated, or condemned by every respectable per-
son." " Will the mere statement of a parcel of swindlers in their own
favor entitle them to public favor, or secure public confidence ? " " Nor
shall we rest contented till we chase them out of every town and city in
her Majesty's dominions, or till they are fairly seized by the strong arm
of justice." " We defy the confederated band of swindlers, from the
highest to the lowest."

The wild fury of Mr. Mackenzie's opponents may be conceived. They
declared him to be a false and malicious calumniator. They published
counter-statements, assumed the aspect of injured and of innocent men,
and instituted separate actions against him for 12,000 damages. One
of the agents had been in London, and had the audacity to state, on his
return, that the deputy-governor of the Bank of England had personally
assured him of the respectability of the association. Mr. Mackenzie,
however, procured and published a denial from that gentleman ; and this
increased the hatred of the accomplices. Two thousand pounds were
placed at the disposal of their law agents, to destroy Mr. Mackenzie, who
appears to have been one of those not easily moved from a righteous
purpose. He continued his articles, he continued to warn the public ;
and though, when the actions brought against him in 1839 were dismissed
in 1840, they raised new suits, he persisted in his bold defiance, and did
not hesitate one moment in the task he had undertaken. They could
not, however, long conceal their practices ; and one fine morning, the
entire gang absconded, taking with them from the premises every article
of furniture, after having realized, in four years, a booty of 250,000.

130

Conclusion.

The distress which pervaded the middle and the lower classes was
great. Applications to magistrates were frequent. Aged men, who had
invested their all, went to the workhouse ; servants, who had bought an-
nuities with the savings of a life, were obliged to commence anew.
Parents, who imagined they had provided for their children, were half
broken-hearted. Day by day brought some new case, and day by day
evinced the importance of being contented with a fair and legitimate
percentage.

There is no knowing to what extent the evil might have reached had
not the boldness of Mr. Mackenzie induced him to attack the Independent
West Middlesex Company. The longer such an association lasts, the
more numerous are its constituents ; and to the above gentleman the
thanks of the entire country are due, for performing, at a personal risk,
and at a personal sacrifice of 700, a great public service.

The following extract from a letter, evincing the amenity of disposition
and choice of language of the person who conducted the delusion, may
prove an interesting close to the above narrative :

" Thou art a scoundrel, and thy son no better. I give you and your lying rascal

of a notice, that if you or he should dare to publish any slander relative to my

character, I shall instruct my solicitor to prosecute you, perjured scoundrel. You
base wretch, swear against your own handwriting! What! swear you never bor-
rowed any money of me for the office. O wicked wretch ! I have your signature,
and my solicitor has seen it. Base, base, base, base ! Hang thyself with thy friend !

"P. S. I have heard you have again plundered the office. O, how many times, you
wretch ! "

131

APPENDIX

THE

ANATOMY OF EXCHANGE ALLEY;

OR,

A SYSTEM OF STOCK-JOBBING:

PROVING THAT SCANDALOUS TRADE, AS IT IS NOW CARRIED ON, TO BE
KNAVISH IN ITS PRIVATE PRACTICE, AND TREASON IN ITS PUBLIC.*

THE general cry against stock-jobbing has been such, and people have
been so long and so justly complaining of it as a public nuisance, and,
which is still worse, have complained so long without a remedy, that the
jobbers, hardened in crime, are at last come to exceed all bounds, and
now, if ever, sleeping justice will awake, and take some notice of them,
and if it should not now, yet the diligent creatures are so steady to them-
selves, that they will, some time or other, make it absolutely necessary to
the government to demolish them.

I know they upon all occasions laugh at the suggestion, and have the
pride to think it impracticable to restrain them ; and one of the top of the
function the other day, when I casually told him that, if they went on,
they would make it absolutely necessary to the legislature to suppress
them, returned, that he believed it was as absolutely necessary for them
to do it now as ever it could be. But how will they do it ? It is im-
possible, said he ; but if the government takes credit, their funds should
come to market ; and while there is a market, we will buy and sell.
There is no effectual way in the world, says he, to suppress us but this,
viz., that the government should first pay all the public debts, redeem all
the funds, and dissolve all the charters, viz. Bank, South Sea, and East
India, and buy nothing upon trust, and then, indeed, says he, they need
not hang the stock-jobbers, for they will be apt to hang themselves.

I must confess, I in part agree that this is an effectual way ; but I am
far from thinking it the only way to deal with a consideration of usurers,
who, having sold the whole nation to usury, keep the purse-strings of
poor and rich in their hands, which they open and shut as they please.

# The above tract appeared in 1719.
135

Appendix.

But before I come to the needful ways for restraining those people, I
think it will be of some service to expose their practices to common view,
that the people may see a little what kind of dealers they are.

And first, they have this peculiar to them, and in which they outdo all
the particular pieces of public knavery that ever I met with in the world,
viz., that they have nothing to say for it themselves ; they have, indeed,
a particular stock of hardware, as the braziers call it, in their faces, to
bear them out in it ; but if you talk to them of their occupation, there is
not a man but will own it is a complete system of knavery ; that it is a
trade founded in fraud, born of deceit, and nourished by trick, cheat,
wheedle, forgeries, falsehoods, and all sorts of delusions ; coining false
news, this way good, that way bad ; whispering imaginary terrors, frights,
hopes, expectations, and then preying upon the weakness of those whose
imaginations they have wrought upon, whom they have either elevated
or depressed. If they meet with a cull, a young dealer that has money to
lay out, they catch him at the door, whisper to him, " Sir, here is a great
piece of news, it is not yet public, it is worth a thousand guineas but to
mention it ; I am heartily glad I met you, but it must be as secret as the
black side of your soul, for they know nothing of it yet in the coffee-
house ; if they should, stock would rise ten per cent, in a moment, and I
warrant you South Sea will be 130 in a week's time after it is known."
"Well," says the weak creature, " pr'ythee, dear Tom, what is it?"
" Well, really, Sir, I will let you into the secret, upon your honor to
keep it till you hear it from other hands ; why, it is this, the Pretender
is certainly taken, and is carried prisoner to the castle of Milan ; there
they have him fast. I assure you, the government had an express of it

from my Lord St s, within this hour." " Are you sure of it ? " says

the fish, who jumps eagerly into the net. " Sure of it ! why, if you take
your coach and go up to the secretaries' office, you may be satisfied of it
yourself, and be down again in two hours, and, in the mean time, I will
be doing something, though it is but little, till you return."

Away goes the gudgeon with his head full of wildfire, and a squib in
his brain, and, coming to the place, meets a croney at the door, who
ignorantly confirms the report, and so sets fire to the mine ; for, indeed,
the cheat came too far to be balked at home ; so that, without giving him-
self time to consider, he hurries back full of the delusions, dreaming of
nothing but of getting a hundred thousand pounds, or purchase two ; and
even this money was to be gotten only upon the views of his being before-
hand with other people.

In this elevation he meets his broker, who throws more fireworks into
the mine, and blows him up to so fierce an inflammation, that he employs
him instantly to take guineas to accept stock of any kind, and almost at
any price ; for the news being now public, the artist made their price
upon him. In a word, having accepted them for fifty thousand pounds
more than he is able to pay, the jobber has got an estate, the broker two
or three hundred guineas, and the esquire remains at leisure to sell his
coach and horses, his fine seat and rich furniture, to make good the de-
ficiency of his bear-skins ; and, at last, when all will not go through it, he
must give them a brush for the rest.

136

The Anatomy of Exchange Alley.

There aie who tell us, that the Exchange Alley improvements made
upon the news of the Pretender's being taken, were part of the plot, that
the late Earl of Mar having concerted the voyage of Voghera, and how
and in what manner the report of the Pretender's being there should
spread, who it should amuse, and how at one blow it should spread east
to Vienna, and northwest to Paris, and so on, forgot not to contrive it, as
at once should serve political ends in Italy and at Vienna : so, on the
other hand, it should not fail to serve a private view in Exchange Alley ;
and, at the same time that he deceived some of the Whigs who he owed
a large grudge to for shrewd turns at Preston and Dumblain, he might
also raise a tax upon them towards the incident changes of his wandering
circumstances.

I do not aver this story to be true, but the concert is so exact, and the
nature of it so agreeable to the stock-jobbing art, nay, and to the artists
also, whose correspondents are very punctual, especially since it is said

that Mr. T 's chief agent was formerly my Lord M r's broker ;

that I won't affirm it may be true ; but this I will venture to say of it, that
if we are often served thus, the Pretender may very easily raise a hun-
dred thousand pounds a year in Exchange Alley, for the carrying on an
invasion, and lay the tax wholly upon his enemies the Whigs, which, by
the way, I leave them to consider of.

But now that I make good the charge, viz., that the whole art and mys-
tery is a mere original system of cheat and delusion, I must let you see,
too, that this part of the comedy may be very well called, " A Bite for
the Biter," for which I must go back to the broker and his gudgeon ;
the moneyed gentleman finding himself let into the secret, indeed, and
that he was bitten to the tune of 300,000 worse than nothing. After he
had, unhappily, paid as far as his ready money would go, of which piece
of honesty they say he has heartily repented, and is in hopes all that
come after him will forgive him for the sake of what followed, stopped
short, as he might well, you '11 say, when his money was all gone, and
bethinks himself, What am I doing ! I have paid away all this money
like a fool ; I was drawn in like an ass, by the eager desire of biting my
neighbours to a vast sum, and I have been fool enough in that ; but I have
been ten thousand times a worse fool to pay a groat of the money, espe-
cially since I knew I could not pay it all. Besides, who but I would have
forgot the nature of the thing I was dealing in, and of the people I was
dealing with ? Why, is it not all a mere body of knavery ? Is not the
whole system of stock-jobbing a science of fraud ? and are not all the
dealers original thieves and pickpockets ? Nay, do they not own it them-
selves ? Have not I heard T. W., B. O., and F. S., a thousand times say
they know their employment was a branch of highway robbing, and only
differed in two things ; first, in degree, viz., that it was ten thousand times
worse, more remorseless, more void of humanity, done without necessity,
and committed upon fathers, brothers, widows, orphans, and intimate
friends ; in all which cases, highwaymen, generally touched with re-
morse, and affected with principles of humanity and generosity, stopped
short, and chose to prey upon strangers only. Secondly, in danger, viz.,
that these rob securely ; the other, with the utmost risk that the highway -
12* 137

Appendix.

man run, at the hazard of their lives, being sure to be hanged first or
last, whereas these rob only at the hazard of their reputation, which is
generally lost before they begin, and of their souls, which trifle is not

worth the mentioning^. Have not I, I say, heard my broker, Mr. ,

say all this and much more, " That no man was obliged to make good
any of their Exchange Alley bargains, unless he pleased, and unless he
was in haste to part with his money, which, indeed, I am not ; and have
not all the brokers and jobbers, when they have been bitten too hard,
said the same thing, and refused to pay ?

" Pray, how much did old Cudworth, Ph. C p m, and Mr. G g,

eminent jobbers, monarchs in their days of Exchange Alley, break for ?
And how much did they ever pay ? One, if I mistake not, compounded
at last for one penny per pound, and the other two for something less.

" In a word, they are all a gang of rogues and cheats, and I'll pay none
of them. Besides, my lawyer, Sir Thomas Subtle, tells me there is not a
man of them dares sue me ; wo, though I had no protection to fly to ;
and he states the case thus :

" ' You have, Sir,' says Subtle, ' contracted to accept of stock at a high
price ; East India at 220, Bank at 160, South Sea 120, and the like.
Very well. They come to put it upon you, the stock being since fallen.
Tell them you cannot take it yet ; if they urge your contract, and de-
mand when you will take it, tell them you will take it when you think fit.

" fc If they swagger, call names, as rogue, cheat, and the like,
tell them, as to that, you are all of a fraternity ; there is no great matter
in it whether you cheat them, or they cheat you ; 't is as it happens in the
way of trade ; that it all belongs to the craft ; and, as the Devil's broker,
Whiston, said to parson GifFard, tell them you are all of a trade. If
they rage, and tell you the Devil will have you, and such as that, tell them
they should let the Devil and you alone to agree about that, it is none of
their business ; but when he comes for you, tell them you would advise
them to keep out of the way, or get a protection, as you have against
them.

" ' After this, it is supposed they will sue you at law. Then leave it to
me ; I '11 hang them up for a year or two in our courts ; and if ever in
that time the stock comes up to the price, we will tender the money in
court, demand the stock, and saddle the charges of the suit upon them.
Let them avoid it if they can.'

" This is my lawyer's opinion," says he to himself, " and I '11 follow
it to a tittle ; and so we are told he has ; and I do not hear that one stock-
jobber has begun to sue him yet, or intends it ; nor, indeed, dare they
do it."

This experiment, indeed, may teach understanding to every honest
man that falls into the clutches of these merciless men, called stock-
jobbers ; and I give the world this notice, that, in short, not one of their
Exchange Alley bargains need be otherwise than thus complied with.
And, let these buyers of bear-skins remember it, not a man of them dare
go to common law to recover the conditions ; nor is any man obliged,
farther than he thinks himself obliged in principle, to make good one of
his bargains with them. How far principle will carry any man to be just

138

The Anatomy of Exchange Alley.

to a common cheat, that has drawn him into a snare, I do not, indeed,
know ; but I cannot suppose it will go a very great length, where there is
so clear, so plain, and so legal a door to get out at.

It must be confessed that, if the projected story of the taking of the
Pretender was acted in concert between Rome and Exchange Alley,
between my Lord Mar and a certain broker, as fame reports, either the
broker is the devil of a Jacobite, or my Lord the devil of a broker, it
must be acknowledged it was a far-fetched trick, and answered the end in
Exchange most admirably.

Nor can all the world tell us any other end that it could answer ; for
as to the pretences of deluding the imperialists on shore, or the British
men-of-war at sea, and so the better to facilitate the escape of the Pre-
tender to Spain, I undertake to prove that this is absurd and ridiculous ;
for the Pretender was embarked at Netunna, and gone away to sea thir-
teen days, at least, before this whim of people taken at Voghera was
talked of.

As to the amusements among the Courts at Vienna, Paris, and Lon-
don, they amounted to nothing at all, answered no end ; neither prompted
any design on one hand, or hindered any thing on the other. In a word,
we may challenge the world to tell us any one turn that was served by it,
or end answered by it, but this in Exchange Alley.

Nor was this so inconsiderable a design as not to be worth while to
form such a juggle, though a great way off; and, as far off as it is, if we
may believe the report of those who remember the machines and con-
trivances of that original of stockjobbing, Sir F C . There are

those who tell us letters have been ordered, by private management, to
be written from the East Indies, with an account of the loss of ships
which have been arrived there, and the arrival of ships lost ; of war with
the Great Mogul, when they have been in perfect tranquillity ; and of
peace with the Great Mogul, when he was come down against the factory
of Bengal with one hundred thousand men ; just as it was thought proper
to calculate those rumors for the raising and falling of the stock, and
when it was for his purpose to buy cheap, or sell dear.

It would be endless to give an account of the subtleties of that capital
ch t, when he had a design to bite the whole Exchange. As he was the
leading hand to the market, so he kept it in his power to set the price to
all the dealers. The subject then was chiefly the East India stock, though
there were other stocks on foot, too, though since sunk to nothing ; such
as the Hudson's Bay Company, the Linen Manufacture stock, Paper
stock, Saltpetre stock, and others, all at this day worse than nothing,
though some of them then jobbed up to 350 per cent, as the two first in
particular.

But the East India stock was the main point. Every man's eye, when

he came to the market, was upon the brokers who acted for Sir F .

Does Sir F sell or buy ? If Sir F had a mind to buy, the first

thing he did was to commission his brokers to look sour, shake their
heads, suggest bad news from India ; and at the bottom it followed, " I
have commission from Sir F to sell out whatever I can " ; and per-
haps they would actually sell ten, perhaps twenty thousand pounds.

139

Appendix.

Immediately the Exchange (for they were not then come to the Alley)
was full of sellers ; nobody would buy a shilling ; till perhaps the stock
would fall six, seven, eight, ten per cent., sometimes more. Then the
cunning jobber had another set of men employed on purpose to buy, but
with privacy and caution, all the stock they could lay their hands on ;
till, by selling ten thousand pounds at four or five per cent, loss, he
would buy a hundred thousand pounds stock at ten or twelve per cent,
under price ; and, in a few weeks, by just the contrary method, set them
all buying, and then sell them their own stock again at ten or twelve per
cent, profit.

These honest methods laid the foundation, we will not say of a fine
great stone house, on a certain forest, but it certainly laid the foundation
of an opulent family, and initiated the crowds of jobbers in that dexterity
in tricking and cheating one another, which, to this day, they are the
greatest proficients that this part of the world ever saw.

By this exactly-concerted intelligence, he then knew how to turn the
wages (a sort of jobbing then in mode, and which grew so infamous that
they were at length obliged to suppress it by Act of Parliament) which
way he pleased, and by which he got an immense sum of money. How
often did the gentleman run down true news as if it had been false, and
run up false news as if it had been true, by the force of his foreign in-
telligencers ! How often coin reports of great actions, to serve a turn !
It is too late a trick to be forgot by many that were bit by it to the bone.

In a word, the putting false news upon us is nothing but an old trade
revived, though, it must be confessed, this of the Pretender has been a
masterpiece, and the worthy projector who has the credit of it must
pass for a dexterous manager as any the university of Exchange Alley
has bred up for thirty years past, v

It had, also, one particular in it for which it was very remarkable.
Sham reports, false news, foreign letters, &c., are things that have been
often trumped upon us, as above ; and the town have been, not long ago,
cheated to a good round sum that way ; but then they have been soon
detected, the morning news has been set to rights in the afternoon, or the
evening's heat has cooled by morning. But this trick had a fatal duration,
for it held us near a fortnight in a firm persuasion of the thing ; and even
then it continued but suspected only for some time longer, and was yet
longer before it was fully detected ; and even at last it was hardly con-
quered till the Jacobites laughed us out of it, and the Pretender was
looked for nearer home.

< The assurance with which it was carried about the several places from
whence it was written, made it so effectually be swallowed down, that
really people saw no room to question the truth of it for a great while. It
was written from Rome, from Leghorn, from Genoa, from Turin, and from
Paris. Nay, it was even believed at court, and almost everywhere else.

Exquisite fraud ! Who could have believed that this had been born in
Exchange Alley, sent over to Rome, agreed to there, and executed in
such a manner as to cheat, not the town only, but all Europe !

The authority that every one found attended the report, supported it
so that it possessed us all ; even those whose concern for the fact extorted

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tears from them, were not undeceived. Thus the hucksters had time to
play their game, and they made hay while the sun shone ; for, if we may
believe common fame, bargains, contracts, and agreements for stocks,
bear-skins included, amounted in that time to some hundred thousands
of pounds ; nay, some say to two millions and better, most of which was
to the loss of the believing party.

But what tricking, what fraud, what laying plots as deep as hell, and as
far as the ends of the earth, is here ! What cheating of fathers, and
mothers, and brothers, gulling widows, orphans, cozening the most wary,
and plundering the unwary ! And how much meaner robberies than
these bring the friendless even to the gallows every sessions !

But I must not stop here. The story of the Pretender is over ; that
trump is played ; and the artful gamester is wanting a new trick, after
having played so many already that one would think invention was at an
end ; yet they have found it out, and we are just let into the secret.

Hitherto, craft and knavery appears to be their method ; but we shall
trace them now a little farther ; and, like true hussars, who plunder not
the enemy only, but their own army, as the opportunity presents, so these
men are now come to prey upon the government itself.

Let us look into the late lotteries ; had not a piercing eye detected the
roguery, and not the fall of other things taken off the edge of the people's
fancy for venturing. These artists have brought up the tickets to sixteen
shillings apiece, advance, even before the act was passed. That this
could not be but by securing the possession of all the tickets in their
own hands, except such select tickets as were not to come to market, I
say this could not be but by connivance, and this every one knows ; and
that this connivance again could not be but by some higher people than
those that were named to it, this, also, every one may know. Who they
were, is none of my business to inquire, though it is easy to guess. It is
very hard when our statesmen come into a confederacy to bite the peo-
ple, and when dukes turn stock-jobbers. Yet that this was done is most
certain ; and what was this but making a property of the power that
might be in their hands, the better to bite the people ? For if the Parlia-
ment appointed 500,000 in tickets, to be given out at a certain rate that
was low and reasonable, was it not to encourage the people, on whom the
rest of the national burden lies ? And if, by the craft and knavery of
jobbers, the people are made to pay 600,000 for them, which is much
about the case, pray, why not pay the hundred thousand pounds to the
public, either to pay off a hundred thousand pounds of debt, or to make
the burden of the current year a hundred thousand pounds lighter ? of
which, I am sure, there is need enough.

It has been, indeed, our happiness, that a worthy member, being in-
formed of this abominable cheat, detected it, and laid it before the House ;
upon which a vote was passed to make void all bargains make for tickets
before the act was passed ; so the biters were bitten ; and a certain Sir

George was obliged to refund ; but the roguery of the design was

never a jot the less for that.

But the fatal influence of this growing evil does not end here, and I
must trace stock-jobbing now to its new-acquired capacity of intermed-

141

Appendix.

dling with the public, assisting rebellion, encouraging invasion ; and if I do
not bring the stock-jobbers, even the Whigs among them, to be guilty of
treason against their king and country, and that of the worst kind, too,
then I do nothing.

Had the stock-jobbers been all Jacobites by profession, or had the em-
ployment led them by the necessity of their business to put king and
nation, and particularly their own, to bargain and sale ; and had the feel-
ing of news been their property, and they had an act of Parliament, or
patent, to entitle them to the sole privilege of imposing what false things
they pleased on the people, I should have had much the less reason to
have complained of their roguery, and have rather turned myself to the
rest of them people, who are the subject they work upon, and only have
stood at Exchange Alley end, and cried out, " Gentlemen, have a care
of your pockets."

Again, had it been a private club, or society of men, acting one among
another, had the cheats, the frauds, and the tricks they made use of,
in which the English rogue was a fool to them, being practised upon
themselves only, and, like gamesters at a public board, they had only
played with those that came there to play with them ; in this case, also,
I should have held my tongue, and only put them in mind of an old
song, every stanza of which chimed in with, " Tantararara, rogues all,
rogues all."

But when we find this trade become a political vice, a public crime,
and that, as it is now carried on, it appears dangerous to the public, that,
whenever any wickedness is in hand, any mischief by the worst of the
nation's enemies upon the wheel, the stock-jobbers are naturally made
assistant to it, that they become abettors of treason, assistant to rebellion
and invasion, then it is certainly time to speak, for the very employment
becomes a crime, and we are obliged to expose a sort of men who are
more dangerous than a whole nation of enemies abroad, an evil more
formidable than the pestilence, and, in their practice, more fatal to the
public, than an invasion of Spaniards.

It is said by some, that the principal leaders in the jobbing trade at that
time, and to whom most part of the satire in this work ought to be point-
ed, are Whigs, members of Parliament, and friends to the government ;
and that, therefore, I had best have a care of what I say of them.

My first answer is, So I will. I will have a care of them ; and, in the
next place, let them have a care of me ; for if I should speak the whole
truth of some of them, they might be Whigs ; but I dare say they would

be neither P men, or friends to the government very long ; and it is

very hard his Majesty should not be told what kind of friends to him
such men are.

Besides, I deny the fact. These men friends to the government ! Jesu
Maria ! The government may be friendly to them in a manner they
do not deserve ; but as to their being friends to the government, that is
no more possible than the Cardinal Alberoni or the Chevalier de St.
George are friends to the government ; and, therefore, without reflecting
upon persons, naming names, or the like, there will be no need of
names, the dress will describe them, I lay down this new-fashioned

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The Anatomy of Exchange Alley.

proposition, or postulatum, take it which way you please, that I will make
it out by the consequences of what I am going to say.

1. That stock-jobbing, as it is now practised, and as is generally under-
stood by the word stock-jobbing, is neither less or more than high-treason
in its very nature, and in its consequences.

2. That the stock-jobbers, who are guilty of the practices I am going to
detect, are eventually traitors to King George, and to his government,
family, and interest, and to their country, and deserve to be used at least
as confederates with traitors, whenever there are any alarms of invasions,
rebellions, or any secret practices against the government, of what kind
soever.

This is a black charge, and boldly laid, and ought therefore to be
effectually made out, which shall be the work of a few pages in the fol-
lowing sheets.

1. I lay down this as a rule, which I appeal to the laws of reason to
support, that all those people who, at a time of public danger, whether of
treasonable invasion from abroad, or traitorous attempts to raise insurrec-
tions at home, shall willingly and wittingly abet, assist, or encourage the
traitors invading or rebelling, are equally guilty of treason.

2. All those who shall endeavour to weaken, disappoint, and disable the
government in their preparations, or discourage the people in their assist-
ing the government to oppose the rebels or invaders, are guilty of treason.

All that can be alleged in contradiction to this, and perhaps that
could not be made out neither, is, that they are not traitors within the
letter of the law ; to which I answer, if they were, I should not satirize
them, but impeach them. But if it appears that they are as effectually
destructive to the peace and safety of the government, and of the king's
person and family, as if they were in open war with his power, I do the
same thing, and fully answer the end proposed.

As there are many thieves besides housebreakers, highwaymen, lifters,
and pickpockets, so there are many traitors besides rebels and invaders,
and, perhaps, of a much worse kind ; for, in a dispute between a certain
lord and a woman of pleasure in the town, about the different virtue of
the sexes, the lady insisted that the men were aggressors in the vice, and
that, in plain English, if there were no whore-masters, there would be no
whores ; so, in a word, if there were no parties at home, no disaffection,
no traitors among ourselves, there would be no invasions from abroad.

Now, I will suppose for the purpose only, that the people I am speaking
of were not disaffected to the government ; I mean, not originally and in-
tentionally pointing their intention at the government ; nay, that they are
hearty Whigs, call them as we please ; yet, if it appear they are hearty
knaves, too, will do any thing for money, and are, by the necessity of
their business, obliged, or by the vehement pursuit of their interest, that
is to say, of their profits, pushed upon things as effectually ruinous and
destructive to the government, as the very buying arms and ammunition
by a protest Jacobite, in order to rebellion, could be, are they not traitors
even in spite of principle, in spite of the name of Whig ; nay, in spite of
a thousand meritorious things that might otherwise be said of them, or
done of them ?

143

Appendix.

A gunsmith makes ten thousand firelocks in the Minories, the honest
rnan may be a Whig, he designs to sell them to the government to lay up
in the tower, or to kill Spaniards, or any of the rest of the king's enemies ;
a merchant comes and buys some of them, and says they are for the
West Indies, or to sell into France. But upon inquiry, it appears they
are bought for rebellion ; the undesigning gunsmith comes into trouble,
of course, and it will be very hard for him to prove the negative, that
when he has furnished the rebels with arms, he had no share in the
rebellion.

To bring this home to the case in view, who were the men who, in the
late hurry of an expected invasion, sunk the price of stock fourteen or
fifteen per cent. ? Who were the men that made a run upon the Bank
of England, and pushed at them with some particular pique, too, if pos-
sible, to have run them down, and brought 'em to a stop of payment ?
And what was the consequences of these things ? Will they tell us that
running upon the bank, and lowering the stocks, was no treason ? We
know that, literally speaking, those things are no treason. But is there
not a plain constructive treason in the consequences of it ? Is not a wil-
ful running down the public credit, at a time when the nation is threatened
with an invasion from abroad, and rebellion at home ? Is not this adding
to the terror of the people ? Is not this disabling the government, dis-
couraging the king's friends, and a visible encouragement of the king's
enemies ? Is not all that is taken from the credit of the public, in such
an occasion, added to the credit of the invasion ? Does not every thing
that weakens the government strengthen its enemies ? And is not every
step that is taken in prejudice of the king's interest a step taken in aid of
the designed rebellion ? The kindest thing that can be said of a certain
triumvirate of jobbers, whose hands have been deepest in this part of the
work, and who, indeed, had more obligations upon them than any other
men in the town, to have assisted the public interest and advanced the
credit of the nation, is, that they did not think what they did, and that
this excuse may not serve them another time, I may soon furnish them
with an anatomy of some of the conduct of that little body of Number
Three, that when they see their mistakes with the eyes that other men
see them, they may at their leisure give a better turn to the measures of
unbounded avarice.

I now, that I may not be said to speak without a precedent, I humbly
refer to those moneyed gentlemen to a case recent in memory, and even
in their own, which, though indeed they may think fit to have forgotten
for a time, they will all call to mind when they hear of it again ; and this
was the case of two goldsmiths (knights also, and one of them member of
Parliament, too) in Fleet Street, who pushed at the Bank of England at
the time that the Pretender's invasion from France was in its preparation.
One of them, it was said, had gathered a quantity of Bank-bills, to the
value of near 100,000, and the other a great sum, though not so many,
and, it was said, resolved to demand them all at once.

Let the gentlemen I point at look back to the printed papers that year ;
let them inquire what construction was put upon it; let them inquire
how the government resented it ; how my Lord Treasurer Godolphin

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The Anatomy of Exchange Alley.

looked upon it as a mine formed to blow up the queen's affairs, and
how, in a word, all the friends of the government took it to be such a step
in favor of the Pretender, as was impossible to consist with duty to the
queen.

Let them inquire farther, with what difficulty Sir R Ho

wiped off the imputation of being a favorer of the rebellion, and how
often, in vain, he protested he did it with no such view, and how hard the

Whigs were to believe him. Sir F C d, indeed, carried it with

a higher hand, and afterwards pretended to refuse the bills of the Bank ;
but still declared he did it as a goldsmith, and as a piece of justice to
himself in some points in which the Bank had, as he alleged, used him
ill. But, in general, it was looked upon as an open affront to the govern-
ment, and an abetting and countenancing the invasion of the Pretender
from abroad, and the rebellion intended at home. Nor was the govern-
ment, much less were the authors of private papers and prints, wanting in
letting them know it ; nay, if I am not misinformed, they were threatened
with being treated as enemies to the government ; and if things had gone
on to extremities, they had doubtless been marked out as persons the gov-
ernment were to take care of.

Now I only speak in plainer words ; it was said then, that such men as
endeavoured to run down the public credit were enemies to the govern-
ment. I know no distinction in the case, that should require so much
tenderness. Every subject of King George, who is at the same time an
enemy to King George, is a traitor ; and every overt act of that enmity,
it being his duty to his utmost to favor, aid, and support the government,
is an overt act of treason, let it be gilded over with what fine words the
persons please, 't is the same thing, if it is not literal treason, and within
reach of the statute, yet the crime is in itself of the same nature.

And let any one tell me what is the difference between two dealers in
Paris credit in the time of a French invasion, and three dealers in paper
credit in the time of a Spanish invasion, or what sanctity in Birchin
Lane more than in Fleet Street, that one should be a protection for the
same practice that was resented so justly in another.

Were those stock-jobbers sincerely and heartily in the interest of King
George and his government, as they pretend loudly, what run could there
be upon the Bank, what ebb of credit, what sinking of stock ? The
honest Whigs, who were friends to the government at that time, mentioned
above, who not only knew their duty, but how to make it seasonable and
useful, acted after another manner. When others ran upon the Bank
with all the fury possible, they carried all the money thither they could
gather up ; nay, I could name a man in this city, who, having but 500
in the world, carried it all into the Bank to support the credit of the pub-
lic ; and the story being told to her Majesty by the late Lord Treasurer
Godolphin, the sense of such fidelity so moved the queen, that she sent
him a hundred pounds as a gift, a royal token of her accepting such an
act of loyalty ; and caused my Lord to give him an obligation from the
Treasury to repay him the whole .500 if any disaster to the Bank should
have made it doubtful.

Where 's the like courage and conduct to be found now ? Is it in
13 145

Appendix.

being ? Are the gentlemen less able ? Or is it that they have not the
same zeal for King George as that honest citizen had for the queen ?
Or do they doubt the king being as sensible of the service ? Or what is
the matter that the public credit had rather met with injurious juggling
and jobbing upon it, than real support, either from Exchange Alley,
Birchin Lane, or some other places less noted ?

Let those men reflect a little upon the circumstances the public credit
must have been in by such mismanagement, if the Spanish attempt had
been made, and if these easterly Protestant winds had not chopped in, by
which Providence has given the government time to put itself in a posture
of defence, so as now not to be afraid of them ; and if the capital stock
of the persons interested in the funds is now sunk a million in the real
value of them as they stood before even at the market, which is nothing
but what the matter of fact will justify, to what degree would the same
current, if it had gone on, have sunk the estates of all the moneyed men
in England ?

In what manner would money have been raised upon a new credit for
any immediate exigencies that might have happened ? And should the
government have been supported, nay, though the Parliament had
granted funds, while these men had made all credit ebb, perhaps, to
twenty-five or thirty per cent, discount ? And is not this, then, a species
of treason and rebellion ?

It was very remarkable, that, in the juncture of those things, the Jac-
obites could not refrain taking notice how easy it was to set the citizens
plundering the Bank, and even the Exchequer, too ; for, had this gone on,
the funds, which are, in effect, the Exchequer itself, would have gone
down hill hand in hand with the Bank ; credit would have borne equal
pace in one as well as in the other ; and the government would no more
have been able to borrow, than the Bank would have been able to pay.

It is scarce fit to enter into a description of all the mischievous conse-
quences which necessarily follow running down the public credit, in case
of such dangers as I have mentioned above. If I should fully describe
them, it would appear incredible. Every one will allow that this practice
of the jobbers, carried on a little farther, would indeed appear to be the
worst kind of treason.

But it is needful, after having said thus much of the crime, to say
something of the place, and then a little of the persons, too. The centre
of the jobbing is in the kingdom of Exchange Alley, and its adjacencies.
The limits are easily surrounded in about a minute and a half, viz., step-
ping out of Jonathan's into the Alley, you turn your face full south ;
moving on a few paces, and then turning due east, you advance to Gar-
raway's ; from thence, going out at the other door, you go on still east
into Birchin Lane ; and then halting a little at the Sword-blade Bank, to
do much mischief in fewest words, you immediately face to the north,
enter Cornhill, visit two or three petty provinces there in your way west,
and thus having boxed your compass, and sailed round the whole stock-
jobbing globe, you turn into Jonathan's again ; and so, as most of the
great follies of life oblige us to do, you end just where you began.

But this is by way of digression ; and even still, before I come to the

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The Anatomy of Exchange Alley.

main case, I am obliged to tell you that, though this is the sphere of the
jobbers' motion, the orb to which they are confined, and out of which they
cannot well act in their way, yet it does not follow but that men of for-
eign situation (I mean foreign as to them, I do not mean foreign as to
nation) ; nay, some whose lustre is said to be too bright for the hemisphere
of a coffee-house, have yet their influence there, and act by substitutes
and representatives. But first I must speak to originals.

C , a man of brass sufficient for much more business than he can

be trusted with, is said to manage for three blue ribbonds, and for four or
five cash-keepers, who tell more money than their own. He fetches and
carries with such indefatigable application, that he is said never to fail his
appointments to a minute, however remote from one another. Wherever
he appears, he makes an Exchange Alley in his person, and a court in
his audience ; he is himself a Jonathan's coffee-house in little ; though he
be at a cockpit, he realizes Exchange Alley in every place \ and yet he
rather is directed than directs ; and, like a certain great general, famed
for more fire than phlegm, is fitter to drive than to lead.

S has twice the head, but not half the business as C is said

to have, yet he gets more money for himself, and C gets more for

other folks. S is as cunning as C is bold, and the reserve of

one with the openness of the other, makes a complete Exchange Alley

man. C jumps at every thing, and as he got the start of the world

at his beginning, by venturing more than he was worth, so he deals now
with all men as if they ventured more than they are worth. Originally
he was a bite, which, in modern language, is a sharper ; or, being fully
interpreted, may signify the head-class of the fraternity called pick-
pockets.

T , a gamester of the same board, acts in concert with C and

S , and makes together a true triumvirate of modern thieving. He

inherits the face of C , with the craft of S , but seems to take

state upon him, and acts the reserved part more than either ; yet even
this, too, is all grimace, for wherever he can be sure to kill, he can't fawn
like an Irishman.

They are all three of yesterday in their characters, yet they are old in
their crime, viz., of resolving to be rich at the price of every man they
can bubble. Their first blow was aimed at the Bank, but there they
were outwitted ; and the great Lord Treasurer Godolphin, in the late
reign, gave them their just characters from that action. The defeat
they met with there sticks so close to them, that they reserve the meas-
ures of their revenge, not to cool, no, not till the charter of the Bank
shall expire.

However, their wings being clipped by the clause then obtained in an
Act of Parliament, that no society, corporation, &c., should issue out
bills of credit as a bank, but the Bank of England only, they were
obliged ever since to turn stock-jobbers, or, if we may speak properly of
them, they are the stock-jobbers' masters ; for they have so many bear-
skins pawned to them at a time, so much stock deposited with them upon
bottomree, as it might be called, that indeed they may be called the city
pawnbrokers ; and I have been told, that they have had fifty stock-

147

Appendix.

jobbers and brokers bound hand and foot, and laid in heaps at their doors
at a time.

The next trick they tried, and which was, indeed, the masterpiece of
their knavery, was the getting an assignment of the forfeited estates in
Ireland into their hands. Indeed, they began the world upon this pros-
pect, and expected to have had the whole kingdom of Ireland mortgaged
to them. But here, too, they were disappointed, and had they not found
a man that had as much money as themselves, and more henesty, that
bargain of the forfeited estates had been the last they had made in the
world.

The endeavours they use to cheat that gentleman, after he had deliv-
ered them from a blow that would have blown them up, is another black
part of their story that remains to be told, for the illustration of their
character, at another time ; but in the interim, 't is enough to say, that
he who delivered them as fools, knew how to deliver himself from them
as knaves ; and so they were dropped out of the Irish bargain, to their
great mortification.

Now they stand ready, as occasion offers, and profit presents, to stock-
job the nation, cozen the Parliament, ruffle the Bank, run up and down
stocks, and put the dice upon the whole town.

They had another flap with a Fox-tail, to the scandal of their politics,
in the late vote about the tickets of the lottery which I mentioned above.
What market they will make of it is well enough known. But the plot
was never the less cunning, and 't is certain the knavery is not the less
visible for the miscarriage. I come next to their more modern manage-
ment.

Whenever they call in their money, the stock-jobbers must sell ; the
bear-skin men must commute, and pay differences money ; then down
come the stocks, tumbling two or three per cent. ; then the tools must
sell and their masters buy ; the next week they take in stocks again, then
the jobbers buy, and the managers sell. Thus the jobbers bite their
friends, and these men bite the jobbers, qui sarpat sharpabitur, Ex-
change Alley Latin : they that are let into the secret will understand it.

The truth is, it has been foretold by cunning men, who often see what
can't be hid, that these men, by a mass of money which they command
of other people's, as well as their own, will, in time, ruin the jobbing
trade. But 't will be only like a general visitation, where all distempers
are swallowed up in the plague, like a common calamity, that makes
enemies turn friends, and drowns lesser grievance in the general deluge.
For if the reprisal trade should adjourn from Exchange Alley to Birchin
Lane, it may seem to be like the banishing usury from the city of Rome,
which transferred it to a Jew at Genoa, a monk at Naples, and a banker
at Venice, who, it was said, had no less than seven-and-twenty princi-
palities in Italy mortgaged to them at a time, besides two kingdoms, seven
duchies, and the jewels of the crown of France.

Having thus given the blazing characters of three capital sharpers of
Great Britain, knaves of lesser magnitude can have no room to shine ;
the Alley throngs with Jews, jobbers, and brokers ; their names are
needless, their characters dirty as their employment ; and the best thing

148 ' w

The Anatomy of Exchange Alley.

that I can yet find to say of them is, that there happens to be two honest
men among them, Heavens preserve their integrity ; for the place is a
snare, the employment itself fatal to principle, and, hitherto, the same
observation which I think was very aptly made upon the Mint, will justly
turn upon them, that many an honest man has gone in to them, but
cannot say that I ever knew one come an honest man out from them. j

But to leave them a little, and turn our eyes another way, is it not sur-
prising to find new faces among these scandalous people, and persons even
too big even for our reproof ? Is it possible that stars of another latitude
should appear in our hemisphere ? Had it been Sims or Bowcher, or
gamesters of the drawing-rooms or masquerades, there had been little to
be said ; or had the groom-porters been transposed to Garraway's and
Jonathan's, it had been nothing new ; true gamesters being always ready
to turn their hand to any play. But to see statesmen turn dealers, and
men of honor stoop to the chicanery of jobbing; to see men at the

offices in the morning, at the P house about noon, at the cabinet

at night, and at Exchange Alley in the proper intervals, what new phe-
nomena are these ? What fatal things may these shining planets (like the
late great light) foretell to the state and to the public ; for when states-
men turn jobbers, the state may be jobbed.

It may be true that a treasurer or cash-keeper may be trusted with
more money than he is worth, and many times it is so ; and if the man
be honest, there may be no harm in it : but when a treasurer plays for
more money than he is worth, they that trust him run a risk of their
money, because, though he may an honest man, he may be undone. I
speak of private, not public treasurers.

Indeed, it requires some apology to say such a one may be an honest
man ; it would be hard to call him an honest man, who plays away any
man's money that is not his own, or more than he is able to pay again
with his own. But if it be dishonest to play it away, that is, lose it at
play, 't is equally dishonest to play with it, whether it be lost or no ;
because, in such a case, he that plays for more than he can pay, his mas-
ter runs the hazard more than himself ; nay, his master runs an unequal
hazard, for if the money be lost, 't is the master's, if there is gain, 't is
the servant's.

Stock-jobbing is play ; a box and dice may be less dangerous, the
nature of them are alike a hazard ; and if they venture at either what is
not their own, the knavery is the same. It is not necessary, any more
than it is safe, to mention the persons I may think of in this remark ;
they who are the men will easily understand me.

In a word, I appeal to all the world, whether a man that is intrusted
with other men's money (whether public or private is not the question)
ought to be seen in Exchange Alley. Would it not be a sufficient objec-
tion to any gentleman or merchant, not to employ any man to keep his
cash, or look after his estate, to say of him he plays, he is a gamester, or
he is given to gaming and stock-jobbing, which is still worse, gives the
same, or a stronger ground of objection in like cases.

Again, are there fewer sharpers and setters in Exchange Alley than at
the Groom Porters ? Is there less cheating in stock-jobbing than at play ?
13* 149

Appendix.

Or, rather, is there not fifty times more ? An unentered youth coming
to deal in Exchange Alley is immediately surrounded with bites, setters,
pointers, and the worst set of cheats, just as a young country gentleman
is with bawds, pimps, and spongers, when he first comes to town. It is
ten thousand to one, when a forward young tradesman steps out of his
shop into Exchange Alley, I say 't is ten thousand to one but he is un-
done : if you see him once but enter the fatal door, never discount his bills
afterwards, never trust him with goods at six months' pay any more.

If it be thus dangerous to the mean, what is it to the great ? I see
only this difference, that in the first the danger is private, in the latter
public.

It has not been many years since elections for members of

came to market in Exchange Alley, as current as lottery-tickets now,
and at a price, like these, much above what any Parliament allowed them
to go at. While this was carried on, a great many honest men exclaimed
against it, and exposed it ; nay, several Acts of Parliament were pro-
posed for regulating elections, and preventing bribery and corruption ;
but all this would not do, and this, indeed, was one of the happy conse-
quences of that otherwise necessary act for triennial Parliaments ; and I
firmly believe, that it is owing very much to the late suspending that act
for a time, that these things are not come to market again.

It may easily be remembered, that the first occasion of the Exchange
Alley men engaging in the case of elections of members was in King
William's time, on the famous disputes which happened between the Old
East India Company and the New ; which, having held a great while,
and having embarrassed, not the city only, but the whole nation, and even
made itself dangerous to the public business, it was expected it should be
fully decided by the House of Commons. To this end, the members of
both companies, with all the trick, artifice, cunning, and corruption, that
money and interest could arm them with, bestirred themselves to be
chosen members.

Brokers rid night and day from one end of the kingdom to the other,
to engage gentlemen to bribe corporations, to buy off competitors, and to
manage the elections. You will see the state of things at that time, and
the danger this stock-jobbing wickedness had brought the public to, if you
please to read the following exclamation of the honest freeholders at that
time, which was presented to the public by way of complaint. The thing
was laid before the king first, and before the Parliament afterwards ; and
it was his Majesty's sense of the consequence, that made him resolve to
bring the two East India Companies to unite their stocks ; for, in a word,
the stock-jobbers embroiled the whole nation.

There was a book published some years ago, and when the stock-job-
bing people were thought as willing, yet not quite so daring or so cunning,
as they are now ; it was entitled, " The Villany of the Stock-jobbers."
Indeed, it set them out in their true colors, and for some time gave them
a little shock ; for the truth was, they jobbed King William and the gov-
ernment at that time at such a rate, that, in spite of the invincible valor
and resolution of the soldiery, in spite of the most glorious prince and
most vigilant general the world had ever seen, yet the enemy gained

150

The Anatomy of Exchange Alley.

upon us every year ; the funds were run down, the credit jobbed away in
Exchange Alley, the king and his troops devoured by mechanics, and
sold to usury ; tallies lay bundled up like Bain faggots in the hands of
brokers and stock-jobbers ; the Parliament gave taxes, laid funds, but the
loans were at the mercy of those men ; and they showed their mercy,
indeed, by devouring the king and the army, the Parliament, and, indeed,
the whole nation, bringing that great prince sometimes to that exigence,
through unexpressible extortions that were put upon him, that he has even
gone into the field without his equipage, nay,' even without his army ; the
regiments have been unclothed when the king has been in the field, and
the willing, brave English spirit, eager to honor their country, and follow
such a king, have marched even to battle without either stockings or
shoes, while his servants have been every day working in Exchange
Alley, to get his own money of the Stock-jobbers, even after all the hor-
rible demands of discount have been allowed ; and, at last, scarce fifty
per cent, of the money granted by Parliament has come into the Ex-
chequer, and that late, too late for that service, and by driblets, till the
king has been tired of the delay, and been even ready to give up the
cause.

We have just now had a test of their cunning on the subject of the
invasion. These were the men that made the first advantage of the
news ; immediately those that were to put stock upon any man at a high
price tendered it, the accepters, forced by the demand, call in their
money on their hand, pay the difference, the price falls, a general run
upon the Bank follows, and stock-jobbing began it.

Say this was no design, yet if every alarm of the foolish, or the timor-
ous, or the false, is capable to set the humor afloat by the agency of Ex-
change Alley, is as dangerous to the public safety as a magazine of gun-
powder is to a populous city.

But if it be by design, then, whenever the Pretender is to be pawned
upon us by any foreign power that can but talk of lending five or six thou-
sand men, our public credit is at his mercy, by the agency of Exchange
Alley and the brokers.

The story of the invasion from Spain, we hope, is now over. Indeed,
at the worst, I saw no such reason to be surprised to that degree as was
the case here. Let us look back, and see what injury to the public has
the very rumor been ! what damage to credit ! what stop to trade ! what
interruption to our general commerce ! besides sinking above a million
sterling upon our estates ; and every farthing of this is occasioned by the
stock-jobbers, and in the consequence of their contrivance, and by no other
means ; for as to the design of an invasion, or that they resolved to come
hither at all, though we have evident proofs of that, because some of
them have been actually landed, yet we cannot yet resolve the question
positively, whether it was ever worth our being so much alarmed, as we
have been in Exchange Alley.

While these sheets were at the press, we had another little test of their
knavery to the public ; and it is not at all owing to them that the thing
ran no farther. The contrary winds and storms, &c., had disappointed
the king's enemies, and the Spanish fleet was driven back to Spain in a

151

Appendix.

shattered and defeated condition, as appears by the public account of those
things : but in the interval of this news came an account, on the other
hand, that some of the party were arrived in Scotland, that they had beat
it up, notwithstanding all the opposition of nature, the hindrances of winds
and seas. Immediately stocks fell two per cent., nor did the good news
of the defeated return of the rest animate these men to keep up the in-
terest, by which it appears that they are acted more by the bad principle
than by the good ; that they choose rather to do evil than to do good ;
that they sink faster than they rise, and are willinger to do harm than
good to the government.

From whence I infer, that the government, looking upon them as they
really are, rather enemies than friends to the general interest, should
rather incline to root them out than preserve them. AMEN.

152

English Funds.
ENGLISH FUNDS.

HIGHEST AND LOWEST PRICE OF THREE PER CENTS IN EACH
YEAR, FROM 1731 TO 1848.

Highest. Lowest.

.91 87

93 88

.89 84

87 - 78

.88 81

95 87

.87 86

89 86
.90 87

90 81
, . . .80 76

. . . 72 61

. . . 64 59

/-'. 63 60

.59 56

61 53

.68 58

57 54

i / 1 ~~ DD

78 69

. 89| 75|

974 72i

Q1 *7fll.

i * 1 / U<

72! 62|

. 70i 61

70| 534

58 474

. 69 52|

674 60

. 70 544

79 66

. 73 504

*^^8 ' ' ' Do^J

153

1731

Highest.
. 99

Lowest.
94

1767

1732

101

1768

1733

. 103

1769

1734

1770

1735

. 98

- 92

1771

1736

113

100

1772

1737

. 107

105

1773

1738

106

102

1774

1739

. 105

1775

1740

101

1776

1741

. 101

1777

1742

102

1778

1743

. 103

100

1779

1744

1780

1745

. 92

1781

1746

. . 89

1782

1747

. 86

1783

1748

1784

1749

. 102

1785

1750

101

1787

1751

. 103

1789

1752

106

101

1790

1753

. 106

104

1791

1754

104

102

1792

1755

. 101

1793

1756

1794

1757

. 91

1795

1758

1796

1759

. 88

1797

1760

1798

1761

. 88

1799

1762

1800

1763

. 96

1801

1764

1802

1765

. 91

1803

1766

1804

Appendix.

Highest. Lowest. Highest. Lowest.

1805 . . . .62 57 1827 . . . .894761

1806 . . . . 64| 58i 1828 . . . . 88f 80

1807 . . . . 64| 57f 1829 . . 94| 85|

1808 . . . . 69J 62| 1830 . . . . 94| 77i

1809 . . . 70$ 63| 1831 . . . . 84| 74J

1810 . . . ' . 71 63J 1832 . . . . 85| 81f

1811 . . . . 66| 61| 1833 . . . . 91| 84

1812 . . . . 63 55J 1834 . . . . 93 87i

1813 . . . . 67i 54i 1835 . . . . 92J 89|

1814 . . . . 72i 61i 1836 . . . . 92 86|

1815 . . . . 65| 53$ 1837 . . . . 93J 87|

1816 . 64| 59fc 1838 . . . . 95| 90$

1817 . . . .84^62 1839 .... 93$ 89|

1818 . . . . 82 73 1840 . . . . 93J 85|

1819 . . . . 79 64$ 1841 * . . . 90i 87

1820 . . . . 70| 65| 1842 . . . . 95J 88

1821 . . . . 781 68| 1843 - . . . 97| 92J

1822 . . . . 83 75| 1844 101| 96i

1823 . . . .85172 1845 .... 100| 9l

1824 . . . . 96J 84| 1846 . . . . 97| 93*

1825 . . . .94475 1847 . ... . 94 78|

1826 . . . . 84i 73J 1848 . . . . 89i 80

LOANS EAISED SINCE 1793, WITH THE BATES OF LNTEEEST.

Year.

Amount.

Per cent.

1793 ......

4,500,000

..... fr 4 3s,

1794

11,000,000

. . . 4 10

22,600,000

. * . . . 4 15

1796 .....

18,000,000

4 14

H
>

7,500,000

. . . . 4 12

18,000,000

. . 5 12

16,120,000

.... 6 6

17,000,000

. . . .64

3,000,000

. 5 12

. . * .

15,500,000

* . .55

1800 ......

20,500,000

4 12

1801

28,000,000

5 5

154

Acts relative to Brokers.

Year.

Amount.

Per cent.

1802

. 25,000,000 .

. 3 19s.

1803

12,000,000

. 5 2

1804

. 14,500,000 .

..59

1805 . . .. . .

22,500,000

.53

1,500,000 .

5 16

1806

20,000,000

. 4 19

1807

. 14,200,000 .

. . . 4 14

1,500,000

-* . . 4 16

1808

. 10,500,000 .

. . . 4 14

1809

14,600,000

... . 4 11

1810

. 13,400,000 .

.44

1811

12,000,000

. 4 13

1812

. 22,500,000 .

5 5

1813

27,000,000

. 5 8

22,000,000 .

5 6

1814

24,000,000

. 4 14

1815

. 36,000,000 .

. . 5 12

1835

15,000,000

. " "

1847

8,000,000 .

. * . v 3 7

A LIST OF ACTS RELATIVE TO BROKERS.

13 Edward I.

. Statute 5

1 James I. . .

. 21

8 and 9 William HI.

" 32

6 Anne .

. . . 16

10 " .

" 19

. " 18

3 George II. .

" 31

" 8

. Anno 1284.
: 1604.

. 1697, enpired 1707.

1707.

. 1711.

1720.

. 1730, for Bristol.
1739.

155

Directors of the Bank of England.

DIRECTORS OF THE BANK OF ENGLAND

FROM 1694 TO 1847.

Sir John Houblon .
Michael Godfrey
Sir Thomas Abney
Sir James Bateman .
Brooke Bridges
George Boddington
James Denew
Sir Henry Furnese
Sir William Gore .
Thomas Goddard
Sir Gilbert Heathcote
Sir William Hedges .
Sir James Houblon
Sir John Huband .
Abraham Houblon
Sir Theodore Janssen .
John Knight . .
Samuel Lethieullier .
John Lordell .
William Patterson
Robert Raworth
Sir William Scawen .
Obadiah Sedgwick.
John Smith
Nathaniel Tench .
Sir John Ward . .
Henry Cornish .
Edward Clarke .
Sir John Cope, Sen.
Peter Godfrey .

1694

1695

Anthony Stevens .
Sir William Ashhurst
Robert Bristow .
Samuel Bultell .
John Page .
Sir Francis Eyles
John Shipman
Sir Nathaniel Gould .
Samuel Lock
Sir Peter Delme
William Dawsonne
Francis Stratford
Peter Gott .
Sir Richard Levett
John Devinck
John Rudge .
Richard Perry
John Reynardson
William Desbouverie
Josiah Diston . .
John Gould .
John Hanger .
Humphrey South .
Sir Robert Clayton
Sir Gerard Conyers
Abraham Hill
Samuel Heathcote .
Charles Chambrelan .
Sir William Hodges
Sir Charles Peers

1695
1697

1698

1699
ii

1700

1701

1702
n

1703

1705

156

Directors of the Bank of England.

Sir Thomas Scawen
Sir John Cope, Jun. . .
James Dolliffe . .
John Emilie . . .
William Gore .
Sir Justus Beck . .
William Henry Comellissen
John Dolben . .
Jeremiah Powell . .
Sir Denis Dutry . .
Heneage Fetherstone .
Sir Philip Jackson .
John Ward, Jun. .
Sir George Thorold .
Mr. Robert Atwood
Richard Gary
Sir Joseph Hodges .
Sir Randolph Knipe . .
Christopher Lethieullier
Matthew Raper . . .
John Edmonds
Sir Richard Houblon . .
Richard Chiswell . .
Sir William Jolliff .
Henry Lyell .
William Thompson .
Sir John Eyles
Mr. Barrington Eaton
John Francis Fauquier .
Humphrey Morice
Moses Raper . . *
Sir Joseph Eyles . ,
Sir William Humphreys
Richard Du Cane
Samuel Holden . .
Bryan Benson . .
Thomas Cooke
Delillers Carbonnel .
Nathaniel Gould . .
Henry Herring . . ,

Hon. Horatio Townshend
14

1705
1706
1708

1709

1710

(

1711
u

(C
4(

1712

1713
1714

1715

1716

n
tt

1717
1719
1720

1721

1722
ii

Sir Edward Bellamy
Matthew Howard
John Olmuns .
Sir Francis Forbes
William Fawkener
Sir John Heathcote .
John Nicoll . .
Sir Francis Porten
Stamp Brooksbank
James Gaultier .
William Hunt
William Snelling .
Clement Boehm .
Joseph Paice, Jun. .
Matthew Raper
James Spilman .
Robert Alsop .
John Bance . .
Henry Neale .
Robert Thornton
Charles Savage
Benjamin Lethieullier
Benjamin Longuet .
Sir John Thompson .
Christopher Tower
John Eaton Dodsworth
Frederick Frankland
Samuel Trench . .
Alexander Sheafe .
Richard Chiswell, Jun.
Sir John Lequesne
Benjamin Mee . .
Mark Weyland
Claude Fonnereau .
Charles Palmer .
John South . .
Matthew Beachcroft
Robert Nettleton
Thomas Whateley .
Merrik Burrell .
James Lever .

1723

1724

1725

1726

1728

1729
1730

1731

1732
<i

1733
1734

1736
M

1737

1738

1739

1741

1742

157

Directors of the Bank of England.

Theophilus Salwey

Robert Marsh . . ,

James Theobald

Robert Salusbury

Peter Thomas

Bartholomew Burton .

Godfrey Thornton .

John Weyland . . .

Thomas Winterbottom .

Charles Boehm .

Matthew Clairmont

Samuel Handley . .

Richard Stratton . .

Harry Thompson . .

Sir Samuel Fludyer .

John Sargent . . .

William Cooper . .

Philip De la Haize . .

Sir Thomas Chitty

Peter Du'Cane .

Edward Payne . .

Thomas Plurner . .
Peter Theobald .
Robert Dingley . .
James Sperling . .
Henry Plant . .
Samuel Beachcroft
Gustavus Brander . .
Daniel Booth
John Cornwall . .
Peter Gaussen .
James Haughton Langston .
Edmund Wilcox .
William Bowden
William Ewer
Richard Neave .
John Fisher .
Christopher Hake, Jun.
Thomas Thomas .
Edward Darell .
William Halhed

1742

1743

1744

1746

1748

1749

1750
it

1753

1754

1755

1756
(i

1757
ii

1759
1760

1761
ii

1763

((

1764

1765
1767

Lyde Browne
George Drake .
George Hayter . .
Benjamin Hopkins .
George Peters . .
Mark Weyland
Roger Boehm . .
Matthew Howard .
Benjamin Branfill
William Snell
Samuel Bosanquet
Martyn Fonnereau
Godfrey Thornton
Daniel Giles, Jun.
Christopher Puller
Thomas Dea . .
Richard Clay . .
Thomas Raikes .
Benjamin Mee, Jun. .
John Sargent, Jun.
William Cooke . .
Samuel Thornton .
Thomas Scott Jackson
Job Matthew .
Joseph Nutt
Thomas Boddington
Benjamin Winthrop .
Beeston Long, Jun.
James Maude
Isaac Osborne
Sir Brook Watson
John Harrison
Bicknell Coney . .
John Whitmore, Jun.
Peter Isaac Thellusson
Moses Yeldham
William Manning, Jun.
John Pearce .
John Puget .
Thomas Lewin
Peter Cazalet

1768

1769

1770

1771
ii

1772
. 1774

. 1775
1776

1777
. 1788

1780

. 1781

. 1782
M

1784

. 1785

1786

1787

. 1788

1790

. 1791
1792

158

Directors of the Bank of England.

William Mellish .
Edward Simeon
Alexander Champion, Jun.
George Dorrien .
Jeremiah Harman .
Nathaniel Bogle French
Charles Pole .
Thomas Amyand
Thomas Langley .
Ebenezer Maitland
Peter Free .
Jeremiah Olive .
Henry Smith .
Stephen Thornton .
John Bowden . .
Cornelius Buller .
Alexander Baring .
John Josiah Holford .
John Baker Richards .
Samuel Drew
Henry Davidson . .
John Stainforth .
Sir Robert Wigram
John Campbell .
William Haldimand
George Blackman
William Tierney Robarts
John Horsley Palmer .
Andrew Henry Thompson
Sir Thomas Neave
Richard Mee Raikes
James Pattison, Jun. .
William Ward
Samuel Hibbert .
Timothy Abraham Curtis
John Rae Reid ,

1792 Sir John Henry Pelly . . 1821

" David Barclay . . . "

1794 John Cockerell ..."

" Henry Porcher . . . "

" William Cotton . . .1822

1796 John Benjamin Heath . 1823

" William R. Robinson . . 1825

1798 James Morris . . . 1827

" William Thompson

" Humphrey St. John Mildmay 1828

1800 John Oliver Hanson . . 1829

" Charles Pascoe Grenfell . 1830

1802 Abel Lewes Gower . . "
" Sheffield Neave ... "

1803 Rowland Mitchell . . . 1833
" Christopher Pearse . . 1834

1805 Henry Davidson . . .1835
" Bonamy Dobree . . .

" Thomson Hankey, Jun. .

1806 Henry James Prescott . "

1807 Robert Barclay . . . 1837
" John Malcolmson . . "
" John Gellibrand Hubbard . 1838

1808 Charles Frederick Huth . "

1809 Alfred Latham . . . "

1810 Thomas Charles Smith . "
" Thomas Matthias Weguelin . "

1811 Edward Henry Chapman . 1840
" Kirkman Daniel Hodgson . "

1812 William Little . . . 1842
" David Powell . . . "

1813 Francis Wilson . . "
1817 Arthur Edward Campbell . 1843

1819 Thomas Tooke, Jun. . . "

1820 Henry Lancelot Holland . 1844
" Thomas Newman Hunt "

159

The Bank of England.

ANNUAL DIVIDENDS OF THE BANK OF ENGLAND,

From 1694 to 1849 inclusive.

1694-1697
1698

Per cent
8

Per cent.
1706 18|

1707 .7|

Per cent
1715 7|

1716 8

Per cent.
1724 6

1725 6

1699

1708 124

1717

1726

1700

10|

1709 84

1718

1727

1701

1710 74

1719

1728

1702

1711 7

1720

1729

1703

iei

1712 8

1721

1730

1704

151

1713 8

1722

1731

1705

15i

1714 8

1723

Dividends, with the highest and lowest prices of Bank of England Stock.

Year.

Dividend.

Highest

Lowest.

Year.

Dividend.

Highest. Lowest.

1732

152

109

1758

123

116

1733

151

130

1759

123

109

1734

140

132

1760

114

101

1735

146

138

1761

116

1736

151

148

1762

119

1737

151

142

1763

131

111

1738

145

140

1764

127

112

1739

144

115

1765

136

126

1740

144

138

1766

139

135

1741

143

135

1767

159

142

1742

143

136

1768

170

158

1743

148

145

1769

175

149

1744

148

116

1770

153

105

1745

147

133

1771

155

134

1746

136

125

1772

153

144

1747

129

119

1773

143

139

1748

129

117

1774

146

139

1749

140

128

1775

146

141

1750

136

131

1776

143

134

1751

142

135

1777

138

128

1752

149

141

1778

120

107

1753

144

135

1779

118

106

1754

135

130

1780

116

109

1755

162

119

1781

119

105

1756

121

114

1782

124

109

1757

120

115

1783

134

112

160

The Bank of England.

Year.

Dividend.

Highest.

Lowest.

Year.

Dividend.

Highest.

Lowest.

1784

118

110

1817

294

220

1785

142

111

1818

292

207

1786

158

138

1819

267

210

1787

160

145

1820

226

215

1788

178

158

1821

240

221

1789

191

169 .

1822

252

235

1790

188

164

1823

246

204

1791

204

178

1824

245

227

1792

219

171

1825

299

196

1793

180

161

1826

223

193

1794

169

153

1827

217

200

1795

180

152

1828

215

203

1796

180

142

1829

218

208

1797

146

115

1830

203

194

1798

138

118

'1831

204

189

1799

176

134

1832

208

185

1800

175

154

1833

213

190

1801

190

148

1834

225

211

1802

207

178

1835

225

208

1803

193

136

1836

219

199

1804

169

146

1837

212

203

1805

197

167

1838

208

201

1806

223

191

1839

206

177

1807

235

208

1840

179

156

1808

240

224

1841

173

157

1809

288

235

1842

173

165

1810

276

273

1843

185

172

1811

251

229

1844

211

185

1812

232

212

1845

215

199

1813

242

211

1846

211

199

1814

266

234

1847

206i

180

1815

262

219

1848

202

183

1816

262

215

1849

200

188i

BANK HOLIDAYS. At the Bank of England the only holidays in the dividend offices are Good
Friday and Christmas. In the transfer offices, besides the above, May 1st and November 1st. East
India House and Exchequer, Good Friday and Christmas. Custom-House, Christmas, Good Fri-
day, Prince of Wales's birthday and the Queen's birthday, November 9th and May 24th.

IN IRELAND. Banks, Custom-House, &c., Good Friday, Christmas, and Queen's birthday.

IN SCOTLAND. New year's day, King Charles I. martyrdom, Queen's marriage, Queen's birthday,
Good Friday, Charles II. restoration, Queen's accession, Queen's coronation, Gunpowder Plot, and
Christmas day.

14 * 161

Fluctuations of the English Funds.

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ALPHABETICAL INDEX

CHRONICLES AND CHARACTERS

OP THE

STOCK EXCHANGE.

Page

Alison, Remarks on the National Debt, 83

Annuities, Policy of, ........... 85

Asgill, Mr., on reducing the National Debt, 87

Baily, Francis, Defence of the Brokers, . . . . . . 72,81

Bank of England, First Charter, 27th July, 1694, 9

First payment of Government dividends, ... 23

" " Directors of, from 1694 to 1847, . . . . .156

" " Dividends of, from 1694 to 1849, .... 161

Barbier, Mr., on the National Debt, 87

Barclay and Co., Bankers, Operations of, 104

Baring and Goldsmid, Anecdotes of, 61, 75

Barings, Sketch of the House of, 75

Barnard, Sir John, Opposition to the Stock Exchange, 26

" Act against Stock Gambling, 27

Blackboard, Notices of the, 55,120

Blunt, Sir John, Originator of the South-sea Bubble, 23

Bolland, James, Execution of, for forgery, . 119

Bolingbroke, Remarks on the National Debt of England, . . . 82, 84

Bonaparte, Policies on the life of, 79

Bowring, and the Greek Loan, 106

Bridgewater Canal, 90

Brokers, Acts against, . . . .. . . . 71

Change Alley, Origin of, 10

Charitable Corporation Frauds in London, 19

Chatham, Lord, Opinions of Change Alley, . . . . . . 57

Clayton, Sir Robert, notice of, 8

Cochrane, Lord, Fraud of, 80

Consols, Highest and Lowest Prices of, for 120 years, .... 153

Daniels, Joseph Elkin, Fraud of, 69

Douglas, Heron, & Co., of London, Failure of, 39

Dunbar, Speculations of, 118

East India Company, Stock of, 9, 18

" " Restriction of its Dividends, 37

Elizabeth, (Queen,) Numerous Monopolies granted by, .... 8

165

Alphabetical Index.

Page

Equitable Loan Company, Charter of, 97

Exchequer Bills, First Fraud in, 17

Exchange Alley, Anatomy of, 135

Fordyce, Alexander, Fraud of, 40

Foreign Loans contracted, 17

Fox, Charles James, Anecdote of, 58

Frauds and Forgeries, 32,40,69,77,80,100,119

Furness, Sir Henry, Anecdote of, 11

French Revolution, Effects of the, 64

Germany, Attempted Loan for, . 26

Gideon, Sampson, the Jew Broker, 33,118

Goldsmid, Abraham and Benjamin, 59

" Suicide of, 60

Gordon, Lord George, Anecdote of, 58

Gray, Thomas, Plan for Roads, . 92, 94

Greece, Loan to, '...... 104

Guatemala, Loan to, by English Capitalists, 103

Guise, Count de, Notice of, 119

Guy, Thomas, Anecdote of, 12, 25

Hebrew Brokers, Number limited to Twelve, 42

Hume, David, Remarks on the National Debt, 84

Hume, Joseph, and the Greek Loan, 105

Johnstone, Cochrane, Fraud of, 80

Joint Stock Companies, Speculations in, 73

Life Insurance, Notices of, 125, 127

" " Indisputable Company, 127

" Policies on Diseased Lives, 128

" " Fraudulent Companies, 130

Liverpool and Manchester Railroad, . 93

Loans to Continential Powers, 104,115

" New, Frauds, &c., 44, 154

" Since 1793, and Rates of Interest, 154

Lopez, Manassez, Punishment of, ... 29

Lotteries, Invention of, 49

" Employed by the State, for Revenue Purposes, . 47

" Evils of, and Frauds in, 49

" Abolition of, 53

" Effects of, 50

Loyalty Loan, Subscriptions to, 68

Marlborough's (Duke of) Victories, Effects of, . .... 21

McGregor, Gregor, Notice of, 100

Mining Companies, Speculations in, 98

Moneyed Interest, Origin, Extravagance, and Folly of the, .... 7

National Debt (The), Remarks on, 1, 6, 23

" Proposal to reduce the Interest on, 28

" " Increase of, 1740-1766, 32,35

" " Curious Proposition to pay off, 66, 86

" " Review of, 82

" Smith, Paine, Hervey, Graham, on, . . . . . 84

New-castle, Duke of, Notice of, 118

Petty, Sir Henry, Proposal for a Sinking Fund, 72

163

Alphabetical Index.

Page

Pitt, William, Policy of, 64, 65

Plomer, Sir Thomas, Fraud on, 77

Portugal, Loan to, by English Capitalists, . . . ... . . 115

Poyais Fraud, Disastrous Effects of the, 100

Kicardo, David, Notice of, . . 77

Rice, John, Execution of, for Forgery, 32

Eothschild, Notices of, 109,111

" Death of, 114

Royal Exchange, (The) Notice of, 8

Secret Service Money, 37

Sedley, Sir Charles, Speech of, 13

Sinking Fund, the Orgin of the, . . . 34, 55

Spanish Stock, Fall in, . . . 116

Speculations of 1825, 108

South American Loans, 99, 103

South-sea Bubble, Notices of the, . . . 23, 25

Sprott, Mark, Death of, 74

Stephenson, on Railroads, 94

Stock Exchange, Increased Importance of, 22, 76

" " Opposed by Sir John Barnard, . . . . . 26

Origin of the Blackboard, 55

" Removal of, 67, 108

" Increase of Business, 1810-15, 76

" " Morals and Manners of the, 121

' " Rules of the Board for its Members, . . . . 124

Time Bargains, Origin of, 27

Tontines, History of, . 6

Tulip Mania in Holland, Sketch of 4

Vansittart, Mr., Modification of the Sinking Fund, 78

Walpole, Sir R., Opposition to the German Loan, 26

" " to a Reduction of Interest on National Debt, . 28

" " Adoption of the Sinking Fund, 34

" " Remarks on the National Debt, 84

"Walsh, Benjamin, Trial of, for Fraud, 77

Wilkes, John, Anecdotes of, .... ... 42

William III., Modes of raising Money for War Purposes, . . . . 7

" Enormous Briberies of, 12

" Increased Taxation under, 13

" Defence of his Policy, 14

167

Monthly, 84 Pages Octavo. Five Dollars per Annum.

WRITINGS OF HUMBOLDT, M C CULLOCH, MURCHISON,
GILBART, WHIPPLE, AND OTHERS.

Important Essays published, or in preparation, for the Bankers' Magazine and Statistical Register.

\
Those marked * are already published.

L* J. R. McCuLLOCH on Interest and the Operation of the Usury Laws.

II.* J. R. MCCULLOCH on Foreign and Domestic Exchange, with copious Tables
of the Value of Moneys of Account, Coins, &c.

III. J. R. McCuLLOCH on Money, Coins, Bullion, Metallic and Paper Currency,
Seignorage, Degradation of the Standard, &c., with copious Tables of the Weight,
Value, &c., of the Coins of Various Nations.

IV.* Proceedings of the British Association for the advancement of Science.
London, Sept., 1849. Observations of SIR R. J. MURCHISON, DE LA BECHE,
and others, on the Gold Mines of California and the Ural.

V.* JUDGE BRONSON'S Opinion in the celebrated case of Leavitt, Receiver of The
North American Trust and Banking Company v. Blatchford and others,

VI.* Remarks on the Usury Laws, by JOHN WHIPPLE, Esq., of Providence.

VII.* Accurate Tables of the market value of 150 different Railroad, Bank, In-
surance, and Manufacturing Stocks, for each month, 1849.

VIII.* Tables of the Price of prominent English Funds, for each month, from
November, 1846, to October, 1849.

IX.* Chronicles and Characters of the Stock Exchange. Dedicated by permis-
sion to Samuel Gurney, Esq., comprising sketches of Loans, Lotteries, Life Assur-
ance, Tontines, Bribery, Corruption, Contractors, Railways, Samson Gideon, Abra-
ham Goldsmid, Mark Sprot, Sir Francis Baring, David Ricardo, Francis Baily,
Nathan Meyer Rothschild, Greek Loan and Joseph Hume, Poyais Loan and Gregor
McGregor, Frauds, Forgeries, Anecdotes, and Legends.

' ' Mr. Francis has fulfilled, and most admirably fulfilled, the title of his book. ' ' London Atlas.

"The extraordinary frauds which have been perpetrated from time to" time by Stock Exchange spec-
ulators, afford Mr. Francis ample materials for the historical portions of his work ; and his sketches of
the manners of the Stock Exchange, at the present time, show that he has made himself intimately ac-
quainted with the customs of its frequenters." London Bankers' Magazine.

X.* Life, Opinions, and Personal Recollections of the late ALBERT GALLATIN,
with a Sketch of the Histdry of the National Bank of New York.

The Bankers* Magazine for 1849 - 50.

XL Ten Minutes' Advice to the Middle Class of People about keeping a Banker
By JAMES W. GILBART, F. R. S., Manager of the London and "Westminster Bank.

XII. Banking in Scotland, containing, 1 . The Law of Scotland with reference to
Banking. 2. Statistics of the Existing Banks of Scotland. .3. A Comparison be-
tween the Banks.

XIII. THE BANK or ENGLAND. Its Various Kecharters, its Branches, the Laws
of the Currency with reference to the Bank of England, &c. By J. W. GILBART,
F. K. S. To which are added the Dividends of each year from 1 695 to 1849, the highest
and lowest prices of Stock for each year, Names of the Directors from 1695 to 1849.

XIV. THE BANKS OP IRELAND. An Account of each, their Modes of Business,
the Laws of the Currency in Ireland, Statistics, the Exchanges between the Banks.
By J. W. GILBART, F. R. S.

XV.* Opinion delivered by CHIEF JUSTICE TANEY (of the Supreme Court,
TJ. S.), upon Transfers of Bank Stock by Executors. One of the most important
Bank cases on record. {Reported for the Bankers' Magazine.)

XVI.* Late and Important Decisions in Maine, New Hampshire, Massachusetts,
New York, Pennsylvania, Ohio, Kentucky, Georgia, Maryland, and other States, upon
points in Banking, Bills, Notes, Usury, Brokers, Stocks, Letters of Credit, &c.

XVII.* On the Production of Gold and Silver, and its Fluctuations. By BARON
ALEXANDER VON HUMBOLDT. Translated for the Bankers' Magazine. With co-
pious Historical and Statistical details.

XVEII.* Descriptive Account of the London Stock Exchange. By MR. GRANT,
author of " Random Recollections of the Lords and Commons."

XIX.* BTLES on Presentment, Noting and Protest of Bills of Exchange and
Promissory Notes.

XX.* A Treatise on Banking, the Duties of a Banker, and his Personal
Requisites therefor. By A. B. JOHNSON, Esq., President of the Ontario Branch
Bank at Utica. (pp. 35.)

XXI.* Biographical Sketch of ELI WHITNEY, the Inventor of the Cotton Gin.
By JAMES WYNNE, M. D.

XXII.* Essay on Life Insurance, and its Advantages to the Working Classes.
By the REV. DR. COOK, with late and interesting Law Cases upon the subject.

XXIII.* Life Insurance Premiums and Policies, the Law of Mortality, and the
different Systems of Life Insurance, and a Review of the Validity and Nonvalidity
of Life Policies.

XXIV.* The Latest Forms of Notice of Protest adopted in New York, Pennsyl-
vania, Virginia, Vermont, and Massachusetts.

XXV. THE LONDON PRIVATE BANKERS. The Joint Stock Banks of London,
with Statistics of the Clearing House. By J. W. GILBART, F. R. S.

XXVI.* REPUDIATION. Its Origin, its Progress, its Continuance: with the Let-
ters of Senators Jefferson Davis, and John Henderson ; Form of the State Bonds
Repudiated, Correspondence with Hope and Co., Veto Message of Governor McNutt,
Opinions of Alexander Hamilton upon Public Credit.

J. SMITH HOMANS, Publisher, No. Ill Washington Street, B
Monthly, 84 pp. 8vo. Five dollars per annum.

ESSAY ON INTEREST.

BY J. E. MCULLOCH.

(Published in the Bankers' Magazine for 1850.)

CONTENTS.

PAGE

SKETCH of the rates of interest adopted by various nations. . 1
The rate of interest varies according to the security for the re-
payment of the principal and the duration of the loan. . . 3
On the interference of government in adjusting the rate of in-
terest. ...........5

Effect of the usury laws in Rome. ...... 8

History of the laws regulating the rate of interest in England,

Scotland, and Ireland .9

Comparison between the market rate and the statutory rate of

interest from 17 M to 1793 11

Pernicious effects of laws to regulate interest. . . . .15

The usury laws do not protect the prodigal and unwary. . .16
There were no usury laws in Holland. . . . . .17

On the legal rate of interest in France, Hamburg, Russia, Aus-
tria, Leghorn, Spain, and the United States 18

Usury laws do not reach the government. . . . .19

Error of some writers on the subject of a low rate of interest. . 20

GENERAL INDEX.

Vll

Page
icis. Chronicles of the Stock Exchange, . . 545, 645, 709, 805, 869, 981

Gallatin (Albert), Public Service and Opinions of, 773

Gilbart (F. W.) on Banks and Banking, . . . . . 279,287,1015

Gold Mines of Siberia and California, . 22, 264, 391, 413, 418, 559, 927, 1021

and Gold Coins, &c., . . 165, 246, 489, 573, 663, 669, 856, 954

Great Britain. Finances, Eevenue of, &c., . . . 643, 644, 706, 947, 966

Account and Statistics of the National Debt of, . .121, 399

Archbishops and Bishops of, their Annual Income, &c., 923

Banks of, 35, 117, 259, 279, 301

164

387, 455
399, 416
248
218
207
. 312,913
279
. . .. . . 249

. . . , . 401,415

. . . 346

859, 1013

. 50,513

515

42, 62, 408, 465, 277, 896
44

45, 112, 187, 407, 595, 273
48

. . . 57,97,179
511,889

Circulation and Coin in, ....
Cotton, Linen, and Woollen Goods Trade of,
Gurney on the Finances of, ...
Individual Incomes in, ....
Population and Wealth of, ...
Prominent Bankruptcies in, Dividends, Assets, &c.,
Railroads of, Capital, Length, Dividends, .

Banking System of,

Guarantee Society of London, . ..

Gurney (Samuel) on Bankruptcy in Great Britain,

Hope & Co., Amsterdam. Their Demand on Mississippi,

Homes'tead (The), New Laws for,

Law Decisions in Maine,

New Hampshire, . ....

Massachusetts,

Connecticut,

New York,

Pennsylvania,

Maryland,

Georgia,

Ohio, 512

Kentucky, 594

Missouri, 54

Tennessee, 54

Louisiana, ......... 55

Alabama, 52

Supreme Court, United States, 509, 889

Great Britain, . 63, 76

Legal Miscellany. Agency, . ' 50, 408

Banks and Banking, 43, 46, 49, 50, 52, 76, 97, 101, 111, 466, 511, 595

Bank Checks, 44, 47, 76, 595

Bank Bonds, . 52, 98

Bills of Exchange and Notes, 42, 45, 47, 48, 52, 101, 187, 253, 273,

407, 509, 513, 515, 597, 803

Brokers and Bankers, 54, 62, 76

Corporations, 49,100,111,465

Currency of the State, 54

Damages, 511

Duties, Loss by Leakage, 57, 510

Forgery, Fraud, .110,407

Insurance, . . 510

Letters of Credit, . 49

Vlll GENERAL INDEX.

Page
Legal Miscellany. Liability of Indorsers, ... 53, 54, 187, 192, 803

Life Insurance, 63. 70, 73, 144

New York Dry-Dock Bank Case, 914

North American Trust and Banking Company, . . 596

Notice of Protest, 49, 51, 52, 53, 101, 102, 187, 192, 253, 313, 512

Partners in Trade, . 465

Eights of Stockholders, 50, 97, 101, 112, 277, 466, 468, 469, 767

Stock-Jobbing, 62, 469

Transfers of Bank Stock by Executors, . . . .179, 467

Trustees, . 45, 179

Waiver of Notice of Protest, 51

Usury . . . 43, 46, 107, 466, 512, 596

Transfer of Judgment from one County to another, . 50

Life Insurance. Eecent and Important Cases in the English Courts, . 63, 144
Construction of " Commit Suicide," .- 73

Premiums and Policies, Defects, Statistics, &c., . . 138

On the Moral Duty of, 1033

New Systems of, . . . . . . . .166, 249

Companies in London, Shares, Capital, and Dividend, . 311

Its Advantages to the Working Classes. By Dr. Cook, . 370

London and Westminster Bank (The), Account of (with a plate), . . 35

List of the Private Bankers in, 209

Stock Exchange, An Account and Rules of the, . . . 435, 437

Stock and Money Market of, . . . 165,247,311,415,488,667

Mint and its Operations detailed, 16

Exchange on, from 1822-1849, 636

Historical Sketch of the Coal Trade of, 898

Mann (Horace) on the Evil of large Wealth, . k . . . . 729

Mexico, Finances of, Agreement respecting. July, 1849, .... 434

McCulloch (J. R.) on Interest, and the Effect of the Usury Laws, . . 517

On Foreign and Domestic Exchange, .... 602, 836

Mississippi (Valley of the), Trade of, 318, 382

Mississippi, Bonds and Repudiation of, 247, 337, 363

Mint (London), Royal Commissioner's Report upon, 16

U. S., Operations of, 168,572,962,976

Money Market, Notes on the, 81, 167, 251, 332, 417, 497, 573, 674, 771, 866, 962

Mont de Piete of Paris, Account of the, 1

Murchison (Sir R. I.) on the Gold Mines of California and the Ural, . 559

National Currency, Remarks on, 421

New York, New Banking Laws of, 25, 155

Loans and Stocks of, 78

(City), Revenue and Expenditures of, 1846-48, . . . 557

Wealth and Prosperity of, 1034

New Orleans, Annual Report upon the Trade of, 1848-49, . . . 318,385

Notaries Public, Origin and Public Duties of, 95

Forms of Notice of Protest, ...... 192,253,758

Notice of Protest, On the Law of, 313, 803

Perkins (Jacob), Memoir of, 472

Post-Office, Statistics of the, 331

Poun Sterling (The), on the Value and Quotation of, .... 860, 968
Repudiation in Mississippi, History of, 337, 363, 247

GENERAL INDEX.

80,

Revolutions In Europe, the Effects of,

Riches, on the Distribution of, (From the London Atheneum,)

Russia and Siberia, on the Gold Mines of, .

Spain, Finances and Public Debt of, .

State Finances. Pennsylvania, ....

Maryland,

Virginia,

South Carolina,

Tennessee,

New York,

Georgia,

Alabama,

Michigan, .

Stock Exchange, Chronicles and Characters of, . . 545, 645,

An Account and Rules of the, ....
Stocks, Fluctuations in Boston, New York, &c., . *

Great Britain, 947,

Quotations of, 495, 496, 574, 670,

Suffolk Bank System, Notice of the,

Suicide, Liabilities of Life Insurance Companies for, ....

Times (The London), on Taxation, &c., 129,

Tobacco, Annual Consumption and Tax in Great Britain, 1801-1841,

Treasury Notes. Counterfeits,

Treasury Notes as a National Circulation, Advantages of,
United States, Quotations of Loans of, ....

Finances of,

Usury, on the Origin of,

Laws, on the Operations of the, 581,677,

Virginia, Remarks on the Gold Regions of,

Wealth of Nations, The,

On the Progress of, and the Preservation of Order,
Whipple (John), Remarks on the Importance of the Usury Laws,

Page
489
172

. 22, 559
. 415,431
301, 740, 569
. 248, 747
537, 541
542, 544
484

78, 730
231, 4.80
572, 666
488

709, 805, 869

437, 435, 545

78, 760, 764

948, 949, 950

762, 862, 958

70, 73

391, 399, 470
706
261
421

82, 667
261, 501
114

517, 677, 683
1002
130
292
683

LEGAL CASES CONTAINED IN THIS VOLUME, WHEREIN BANKS

WERE PARTIES.

Maine. Bank of Cumberland v. Badger. Duty of Cashier,
Globe Bank v. Small. Release as Indorser,
Ticonic Bank v. Smiley. Indorsement,

Massachusetts. Phenix Bank v. Commonwealth. Banlc Tax, .
Crowninshield v. Chase. Liability as Stockholder,
Hutchins v. State Bank. Transfer of Stock,
Demmon v. Boylston Bank. Application of Deposit,

New York. Bank of Orleans v- John Curtis et al.,

Mechanics' Bank of N. Y., v. Collins,

Chautauque County Bank v. Risley,

Delaware and Hudson Canal Co. v. Westchester County Bank,
Bank of Ithaca v. Bean. Stockholders' Evidence,
Cayuga Co. Bank v. Warden & Griswold. Demand and Notice,
Bowery Bank v. Decker. Fraud,

514

277

467

896

114

273

407

64*

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UNIVERSITY OF TORONTO LIBRARY