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BLACKWOOD'S
EDINBURGH MAGAZINE.
NO. CCCCX. DECEMBER, 1849. VOL. LXVI.
CONTENTS.
THE NATIONAL DEBT AND THE STOCK EXCHANGE, 655
MY PENINSULAR MEDAL. BY AN OLD PENINSULAR. PART II., 678
SPAIN UNDER NARVAEZ AND CHRISTINA, 704
THE GREEN HAND--A "SHORT" YARN. PART VI., 723
THE VISION OF SUDDEN DEATH, 741
FREE TRADE AT ITS ZENITH, 756
INDEX, 779
EDINBURGH:
WILLIAM BLACKWOOD & SONS, 45, GEORGE STREET; AND 37, PATERNOSTER ROW,
LONDON.
_To whom all communications (post paid) must be addressed._
SOLD BY ALL THE BOOKSELLERS IN THE UNITED KINGDOM.
PRINTED BY WILLIAM BLACKWOOD AND SONS, EDINBURGH.
BLACKWOOD'S
EDINBURGH MAGAZINE.
NO. CCCCX. DECEMBER, 1849. VOL. LXVI.
THE NATIONAL DEBT AND THE STOCK EXCHANGE.[1]
[1] _A Financial, Monetary, and Statistical History of England, from
the Revolution of 1688 to the present time._ By THOMAS DOUBLEDAY, Esq.
London: 1847.
_Chronicles and Characters of the Stock Exchange._ By JOHN FRANCIS,
Esq. London: 1849.
The idea of associating history with some specific locality or
institution, has long ago occurred to the skilful fabricators of
romance. If old walls could speak, what strange secrets might they not
reveal! The thought suggests itself spontaneously even to the mind of
the boy; and though it is incapable of realisation, writers--good,
bad, and indifferent--have seriously applied themselves to the task of
extracting sermons from the stones, and have feigned to reproduce an
audible voice from the vaults of the dreary ruin. Such was at least
the primary idea of Scott, incomparably the greatest master of modern
fiction, whilst preparing his materials for the construction of the
_Heart of Mid-Lothian_. Victor Hugo has made the Cathedral of Paris the
title and centre-point of his most stirring and animated tale. Harrison
Ainsworth, who seems to think that the world can never have too much of
a good thing, has assumed the office of historiographer of antiquity,
and has treated us in succession to Chronicles of Windsor Castle, the
Tower, and Old St Paul's. Those of the Bastile have lately been written
by an author of no common power, whose modesty, rarely imitated in
these days, has left us ignorant of his name; and we believe that it
would be possible to augment the list to a considerable extent. In all
those works, however, history was the subsidiary, while romance was the
principal ingredient; we have now to deal with a book which professes
to abstain from romance, though, in reality, no romance whatever has
yet been constructed from materials of deeper interest. We allude, of
course, to the work of Mr Francis; Mr Doubleday's treatise is of a
graver and a sterner nature.
We dare say, that no inconsiderable portion of those who derive their
literary nutriment from Maga, may be at a loss to understand what
element of romance can lie in the history of the Stock Exchange.
With all our boasted education, we are, in so far as money-matters
are concerned, a singularly ignorant people. That which ought to
be the study of every citizen, which _must_ be the study of every
politician, and without a competent knowledge of which the exercise
of the electoral franchise is a blind vote given in the dark, is as
unintelligible as the Talmud to many persons of more than ordinary
accomplishment and refinement. The learned expounder of Thucydides
would be sorely puzzled, if called upon to give an explanation of the
present funding system of Great Britain. The man in easy circumstances,
who draws his dividend at the Bank, knows little more about the funds
than that they mysteriously yield him a certain return for capital
previously invested, and that the interest he receives comes, in some
shape or other, from the general pocket of the nation. He is aware
that consols oscillate, but he does not very well understand why,
though he attributes their rise or fall to foreign news. It never
occurs to him to inquire for what reason that which yields a certain
return, is yet liable to such surprising and violent fluctuations; he
shakes his head in despair at the mention of foreign exchanges, and
is not ashamed to avow his incapacity to grapple with the recondite
question of the currency. And yet it may not only be safely, but it
ought to be most broadly averred, that without a due comprehension
of the monetary system of this country, and the general commercial
principles which regulate the affairs of the world, history is nothing
more than a tissue of barren facts and perpetual contradictions, which
it is profitless to contemplate, and utterly impossible to reconcile.
Nay more, all history which is written by authors, who have failed to
acknowledge the tremendous potency of the monetary power in directing
the destinies of nations, and who have neglected to scrutinise closely
the source and operation of that power, must necessarily be fallacious,
and can only mislead the reader, by false pictures of the condition of
the present as contrasted with that of a former age. No eloquence, no
genius, will avail to compensate for that radical defect, with which
some most popular writers are justly chargeable, and a glaring instance
of which we propose to examine in the course of the present paper.
The study is said to be a dry one. Certainly, until we have mastered
the details, it does look forbidding enough; but, these once mastered,
our eyes appear to be touched with fairy ointment. What formerly was
confusion, worse than Babel, assumes a definite order. We behold, in
tangible form, a power so terribly strong that with a touch it can
paralyse armies. We behold it gradually weaving around us a net, from
which it is impossible to escape, and claiming with a stern accent,
which brooks no denial, a right of property in ourselves, our soil, our
earnings, our industry, and our children. To its influence we can trace
most of the political changes which perplex mankind, and which seem
to baffle explanation. Like the small reptile of the old Northumbrian
legend, it has grown into a monstrous dragon, capable of swallowing up
both herd and herdsman together. The wisest of our statesmen have tried
to check its advance and failed; the worst of them have encouraged
its growth, and almost declared it harmless; the most adroit have
yielded to its power. Interest after interest has gone down in the vain
struggle to oppose it, and yet its appetite still remains as keen and
insatiable as ever.
When, in future years, the history of this great nation and its
dependencies shall be adequately written, the annalist must, perforce,
give due prominence to that power which we weakly and foolishly
overlook. He will then see, that the matchless industry displayed by
Great Britain is far less the spontaneous result of bold and honest
exertion, than the struggle of a dire necessity which compels us to go
on, because it is death and ruin to stand still. He will understand
the true source of all our marvellous machinery, of that skill in arts
which the world never witnessed before, of our powers of production
pushed to the utmost possible extent. And he will understand more. He
will be able to comprehend why, within the circuit of one island, the
most colossal fortunes and the most abject misery should have existed
together; why Britain, admitted to be the richest of the European
states, and in one sense imagined to be the strongest, should at this
moment exercise less influence in the councils of the world than she
did in the days of Cromwell, and, though well weaponed, be terrified
to strike a blow, lest the recoil should prove fatal to herself. The
knowledge of such things is not too difficult for our attainment; and
attain it we must, if, like sensible men, we are desirous to ascertain
the security or the precariousness of our own position.
The history of the Stock Exchange involves, as a matter of necessity,
the history of our national debt. From that debt the whole fabric
arose; and, interesting as are many of the details connected with
stock-jobbing, state-loans, lotteries, and speculative manias, the
origin of the mystery appears to us of far higher import. It involves
political considerations which ought to be pondered at the present
time, because it has lately been averred, by a writer of the very
highest talent, that the Revolution of 1688 was the cause of unmingled
good to this country. That position we totally deny. Whatever may
be thought of the folly of James II., in attempting to force his
own religion down the throats of his subjects--however we may brand
him as a bigot, or denounce him for an undue exercise of the royal
prerogative--he cannot be taxed with financial oppression, or general
state extravagance. On the contrary, it is a fact that the revenue
levied by the last of the reigning Stuarts was exceedingly moderate
in amount, and exceedingly well applied for the public service. It
was far less than that levied by the Long Parliament, which has been
estimated at the sum of £4,862,700 a-year. The revenue of James, in
1688, amounted only to £2,001,855; and at this charge he kept together
a strong and well-appointed fleet, and an army of very nearly twenty
thousand men. The nation was neither ground by taxes, nor impoverished
by wars; and whatever discontent might have been excited by religious
bickerings, and even persecution, it is clear that the great body of
the people could not be otherwise than happy, since they were left in
undisturbed possession of their own earnings, and at full liberty to
enjoy the fruits of their own industry and skill. As very brilliant
pictures have been drawn of the improved state of England now,
contrasted with its former position under the administration of James,
we think it right to exhibit another, which may, possibly, surprise
our readers. It is taken, from Mr Doubleday's _Financial History of
England_, a work of absorbing interest and uncommon research: we have
tested it minutely, by reference to documents of the time, and we
believe it to be strictly true, as it is unquestionably clear in its
statements.
"The state of the country," says Mr Doubleday, "was, at
the close of the reign of James II., very prosperous. The
whole annual revenue required from his subjects, by this
king, amounted to only a couple of millions of pounds
sterling,--these pounds being, in value, equal to about
thirty shillings of the money of the present moment. So
well off and easy, in their circumstances, were the mass of
the people, that the poor-rates, which were in those days
liberally distributed, only amounted to £300,000 yearly. The
population, being rich and well fed, was moderate in numbers.
No such thing as 'surplus population' was even dreamed of.
Every man had constant employment, at good wages; bankruptcy
was a thing scarcely known; and nothing short of sheer and
great misfortune, or culpable and undeniable imprudence,
could drive men into the Gazette bankrupt-list, or upon the
parish-books. In trade, profits were great and competition
small. Six per cent was commonly given for money when it
was really wanted. Prudent men, after being twenty years in
business, generally retired with a comfortable competence:
and thus competition was lessened, because men went out of
business almost as fast as others went into it; and the eldest
apprentice was frequently the active successor of his retired
master, sometimes as the partner of the son, and sometimes as
the husband of the daughter. In the intercourse of ordinary
life, a hospitality was kept up, at which modern times choose
to mock, because they are too poverty-stricken to imitate it.
Servants had presents made to them by guests, under the title
of 'vails,' which often enabled them to realise a comfortable
sum for old age. The dress of the times was as rich, and as
indicative of real wealth, as the modes of living. Gold and
silver lace was commonly worn, and liveries were equally
costly. With less pretence of taste and show, the dwellings
were more substantially built; and the furniture was solid and
serviceable, as well as ornamental--in short all that it seemed
to be."
The above remarks apply principally to the condition of the middle
classes. If they be true, as we see no reason to doubt, it will at once
be evident that things have altered for the worse, notwithstanding the
enormous spread of our manufactures, the creation of our machinery, and
the constant and continuous labour of more than a century and a half.
But there are other considerations which we must not keep out of view,
if we wish to arrive at a thorough understanding of this matter. Mr
Macaulay has devoted the most interesting chapter of his history to an
investigation of the social state of England under the Stuarts. Many
of his assertions have, as we observe, been challenged; but there is
one which, so far as we are aware, has not yet been touched. That is,
his picture of the condition of the labouring man. We do not think it
necessary to combat his theory, as to the delusion which he maintains
to be so common, when we contemplate the times which have gone by, and
compare them with our own. There are many kinds of delusion, and we
suspect that Mr Macaulay himself is by no means free from the practice
of using coloured glasses to assist his natural vision. But there are
certain facts which cannot, or ought not, to be perverted, and from
those facts we may draw inferences which are almost next to certainty.
Mr Macaulay, in estimating the condition of the labouring man in the
reign of King James, very properly selects the rate of wages as a sound
criterion. Founding upon data which are neither numerous nor distinct,
he arrives at the conclusion, that the wages of the agricultural
labourer of that time, or rather of the time of Charles II., were
about half the amount of the present ordinary rates. At least so we
understand him, though he admits that, in some parts of the kingdom,
wages were as high as six, or even seven shillings. _The value_,
however, of these shillings--that is, the amount of commodities which
they could purchase--must, as Mr Macaulay well knows, be taken into
consideration; and here we apprehend that he is utterly wrong in his
facts. The following is his summary:--
"It seems clear, therefore, that the wages of labour, estimated
in money, were, in 1685, not more than half of what they now
are; and there were few articles important to the working man
of which the price was not, in 1685, more than half of what
it now is. Beer was undoubtedly much cheaper in that age than
at present. Meat was also cheaper, but was still so dear that
hundreds of thousands of families scarcely knew the taste of
it. _In the cost of wheat there has been very little change._
The average price of the quarter, during the last twelve years
of Charles II., was _fifty shillings_. Bread, _therefore_, such
as is now given to the inmates of a workhouse, was then seldom
seen, even on the trencher of a yeoman or of a shopkeeper. The
great majority of the nation lived almost entirely on rye,
barley, and oats."
If this be true, there must be a vast mistake somewhere--a delusion
which most assuredly ought to be dispelled, if any amount of
examination can serve that purpose. No fact, we believe, has been so
well ascertained, or so frequently commented on, as the almost total
disappearance of the once national estate of yeomen from the face of
the land. How this could have happened, if Mr Macaulay is right, we
cannot understand; neither can we account for the phenomenon presented
to us, by the exceedingly small amount of the poor-rates levied
during the reign of King James. One thing we know, for certain, that,
in his calculation of the price of wheat, Mr Macaulay is decidedly
wrong--wrong in this way, that the average which he quotes is the
highest that he could possibly select during two reigns. Our authority
is Adam Smith, and it will be seen that his statement differs most
materially from that of the accomplished historian.
"In 1688, Mr Gregory King, a man famous for his knowledge of
matters of this kind, estimated the average price of wheat,
in years of moderate plenty, to be to the grower 3s. 6d.
the bushel, or _eight-and-twenty shillings the quarter_.
The grower's price I understand to be the same with what is
sometimes called the contract price, or the price at which a
farmer contracts for a certain number of years to deliver a
certain quantity of corn to a dealer. As a contract of this
kind saves the farmer the expense and trouble of marketing, the
contract price is generally lower than what is supposed to be
the average market price. Mr King had judged eight-and-twenty
shillings the quarter to be, at that time, the ordinary
contract price in years of moderate plenty."--SMITH'S _Wealth
of Nations_.
In corroboration of this view, if so eminent an authority as Adam
Smith requires any corroboration, we subjoin the market prices of
wheat at Oxford for the four years of James's reign. The averages are
struck from the highest and lowest prices calculated at Lady-day and
Michaelmas.
1685, 43.8 per qr.
1686, 26.8 ...
1687, 27.7 ...
1688, 23.2 ...
-----
4)121.1 ...
Average, per qr., 30.3-1/4 ...
But the Oxford returns are always higher than those of Mark Lane, which
latter again are above the average of the whole country. So that, in
forming an estimate from such data, of the general price over England,
we may be fairly entitled to deduct two shillings a quarter, which will
give a result closely approximating to that of Gregory King. We may
add, that this calculation was approved of and repeated by Dr Davenant,
who is admitted even by Mr Macaulay to be a competent authority.
Keeping the above facts in view, let us attend to Mr Doubleday's
statement of the condition of the working men, in those despotic days,
when national debts were unknown. It is diametrically opposed in every
respect to that of Mr Macaulay: and, from the character and research of
the writer, is well entitled to examination:--
"The condition of the working classes was proportionably
happy. Their wages were good, and their means far above want,
where common prudence was joined to ordinary strength. In
the towns the dwellings were cramped, by most of the towns
being walled; but in the country, the labourers were mostly
the owners of their own cottages and gardens, which studded
the edges of the common lands that were appended to every
township. The working classes, as well as the richer people,
kept all the church festivals, saints' days, and holidays.
Good Friday, Easter and its week, Whitsuntide, Shrove Tuesday,
Ascension-day, Christmas, &c., were all religiously observed.
On every festival, good fare abounded from the palace to the
cottage; and the poorest wore strong broad-cloth and homespun
linen, compared with which the flimsy fabrics of these times
are mere worthless gossamers and cobwebs, whether strength or
value be looked at. At this time, all the rural population
brewed their own beer, which, except on fast-days, was the
ordinary beverage of the working man. Flesh meat was commonly
eaten by all classes. The potato was little cultivated; oatmeal
was hardly used; even bread was neglected where wheat was not
ordinarily grown, though wheaten bread (contrary to what is
sometimes asserted) was generally consumed. In 1760, a later
date, when George III. began to reign, it was computed that
the whole people of England (alone) amounted to six millions.
Of these, three millions seven hundred and fifty thousand were
believed to eat wheaten bread; seven hundred and thirty-nine
thousand were computed to use barley bread; eight hundred
and eighty-eight thousand, rye bread; and six hundred and
twenty-three thousand, oatmeal and oat-cakes. All, however,
ate bacon or mutton, and drank beer and cider; tea and coffee
being then principally consumed by the middle classes. The very
diseases attending this full mode of living were an evidence of
the state of national comfort prevailing. Surfeit, apoplexy,
scrofula, gout, piles, and hepatitis; agues of all sorts, from
the want of drainage; and malignant fevers in the walled towns,
from want of ventilation, were the ordinary complaints. But
consumption in all its forms, marasmus and atrophy, owing to
the better living and clothing, were comparatively unfrequent:
and the types of fever, which are caused by want, equally so."
We shall fairly confess that we have been much confounded by the
dissimilarity of the two pictures; for they probably furnish the
strongest instance on record of two historians flatly contradicting
each other. The worst of the matter is, that we have in reality few
authentic data which can enable us to decide between them. So long
as Gregory King speaks to broad facts and prices, he is, we think,
accurate enough; but whenever he gives way, as he does exceedingly
often, to his speculative and calculating vein, we dare not trust
him. For example, he has entered into an elaborate computation of the
probable increase of the people of England in succeeding years, and,
after a show of figures which might excite envy in the breast of the
Editor of _The Economist_, he demonstrates that the population in the
year 1900 cannot exceed 7,350,000 souls. With half a century to run,
England has already more than doubled the prescribed number. Now,
though King certainly does attempt to frame an estimate of the number
of those who, in his time, did not indulge in butcher meat more than
once a week, we cannot trust an assertion which was, in point of fact,
neither more nor less than a wide guess; but we may, with perfect
safety, accept his prices of provisions, which show that high living
was clearly within the reach of the very poorest. Beef sold then at
1-1/3d., and mutton at 2-1/4d. per lb.; so that the taste of those
viands must have been tolerably well known to the hundreds of thousands
of families whom Mr Macaulay has condemned to the coarsest farinaceous
diet.
It is unfortunate that we have no clear evidence as to the poor-rates,
which can aid us in elucidating this matter. Mr Macaulay, speaking
of that impost, says, "It was computed, in the reign of Charles II.,
at near seven hundred thousand pounds a-year, much more than the
produce either of the excise or the customs, and little less than half
the entire revenue of the crown. _The poor-rate went on increasing
rapidly_, and appears to have risen in a short time to between eight
and nine hundred thousand a-year--that is to say, to one-sixth of
what it now is. The population was then less than one-third of what
it now is." This view may be correct, but it is certainly not borne
out by Mr Porter, who says that, "so recently as the reign of George
II., the amount raised within the year for poor-rates and county-rates
in England and Wales, was only £730,000. This was the average amount
collected in the years 1748, 1749, 1750." To establish anything like
a rapid increase, we must assume a much lower figure than that from
which Mr Macaulay starts. A rise of £30,000 in some sixty years is
no remarkable addition. Mr Doubleday, as we have seen, estimates the
amount of the rate at only £300,000.
But even granting that the poor-rate was considered high in the days
of James, it bore no proportion to the existing population such as
that of the present impost. The population of England has trebled
since then, and we have seen the poor-rates rise to the enormous sum
of seven millions. Surely that is no token of the superior comfort of
our people. We shall not do more than allude to another topic, which,
however, might well bear amplification. It is beyond all doubt, that,
before the Revolution, the agricultural labourer was the free master
of his house and garden, and had, moreover, rights of pasturage and
commonty, all which have long ago disappeared. The lesser freeholds,
also, have been in a great measure absorbed. When a great national poet
put the following lines into the mouth of one of his characters,--
"Even therefore grieve I for those yeomen,
England's peculiar and appropriate sons,
Known in no other land. Each boasts his hearth
And field as free, as the best lord his barony,
Owing subjection to no human vassalage,
Save to their king and law. Hence are they resolute,
Leading the van on every day of battle,
As men who know the blessings they defend;
Hence are they frank and generous in peace,
As men who have their portion in its plenty.
No other kingdom shows such worth and happiness
Veiled in such low estate--therefore I mourn them,"
we doubt not that he intended to refer to the virtual extirpation of a
race, which has long ago been compelled to part with its birthright, in
order to satisfy the demands of inexorable Mammon. Even whilst we are
writing, a strong and unexpected corroboration of the correctness of
our views has appeared in the public prints. Towards the commencement
of the present month, November, a deputation from the agricultural
labourers of Wiltshire waited upon the Hon. Sidney Herbert, to
represent the misery of their present condition. Their wages, they
said, were from six to seven shillings a-week, and they asked, with
much reason, how, upon such a pittance, they could be expected to
maintain their families. This is precisely the same amount of nominal
wage which Mr Macaulay assigns to the labourer of the time of King
James. But, in order to equalise the values, we must add a third more
to the latter, which is at once decisive of the question. Perhaps Mr
Macaulay, in a future edition, will condescend to explain how it is
possible that the labourer of our times can be in a better condition
than his ancestor, seeing that the price of wheat is nearly doubled,
and that of butcher-meat fully quadrupled? We are content to take his
own authorities, King and Davenant, as to prices; and the results are
now before the reader.
These remarks we have felt ourselves compelled to make, because it is
necessary that, before touching upon the institution of the national
debt, we should clearly understand what was the true condition of the
people. We believe it possible to condense the leading features within
the compass of a single sentence. There were few colossal fortunes,
because there was no stock gambling; there was little poverty, because
taxation was extremely light, the means of labour within the reach of
all, prices moderate, and provisions plentiful: there was less luxury,
but more comfort, and that comfort was far more equally distributed
than now. It is quite true, that if a man breaks his arm at the present
day, he can have it better set; but rags and an empty belly are worse
evils than indifferent surgical treatment.
We are very far from wishing to attribute this state of national
comfort--for we think that is the fittest word--to the personal
exertions of James. We give him no credit for it whatever. His bigotry
was far greater than his prudence; and he forfeited his throne, and
lost the allegiance of the gentlemen of England, in consequence of his
insane attempt to thrust Popery upon the nation. But if we regard him
simply as a financial monarch, we must admit that he taxed his subjects
lightly, used the taxes which he drew judiciously for the public
service and establishment, and imposed no burden upon posterity.
The peculiar, and, to them, fatal policy of the Stuart family was
this, that they sought to reign as much as possible independent of the
control of parliaments. Had they not been blinded by old traditions,
they must have seen that, in attempting to do so, they were grasping
at the shadow without the possibility of attaining the substance. They
came to the English throne too late to command the public purse, and at
a period of time when voluntary subsidies were visionary. They looked
upon parliaments with an eye of extreme jealousy; and parliaments, in
return, were exceedingly chary of voting them the necessary supplies.
Corruption, as it afterwards crept into the senate, was never used by
the Stuarts as a direct engine of power. The sales of dignities by the
first James, detrimental as they proved to the dignity of the crown,
were in substitution of direct taxation from the people. When supplies
were withheld, or only granted with a niggardly hand, it was but
natural in the monarch to attempt to recruit his exchequer by means of
extraordinary and often most questionable expedients. The second James,
had he chosen to bribe the Commons, might have been utterly too strong
for any combination of the nobles. William III. was troubled with no
scruples on the score of prerogative. He saw clearly the intimate and
indissoluble connexion between power and money: he secured both by
acquiescing in a violent change of the constitution as it had hitherto
existed; held them during his life, and used them for the furtherance
of his own designs; and left us as his legacy, the nucleus of a debt
constructed on such a scheme that its influence must be felt to the
remotest range of posterity.
That the exigencies of every state must be met by loans, is a
proposition which it would be useless to question. Such loans are,
however, strictly speaking, merely an anticipation of taxes to be
raised from the country and generation which reaps the benefit of the
expenditure. Such was the old principle, founded upon law, equity, and
reason; and it signifies nothing how many instances of forced loans,
and breach of repayment, may be called from our earlier history. Mr
Macaulay says, "From a period of immemorial antiquity, it had been
the practice of every English government to contract debts. What the
Revolution introduced was the practise of honestly paying them." This
is epigrammatic, but not sound. From the time when the Commons had the
power of granting or withholding supplies, _they_ became the arbiters
of what was and what was not properly a state obligation. In order to
ascertain the actual value of a debt, and the measure of the creditor's
claim, we must necessarily look to the nature of the security
granted at the time of borrowing. Forced extortions by kings are not
properly debts of the state. The sanction of the people, through its
representatives, is required to make repayment binding upon the people.
The practice which the Revolution introduced was the contraction of
debt, not intended to be liquidated by the borrowing generation, but to
be carried over so as to affect the industry of generations unborn; not
to make the debtor pay, but to leave the payment to his posterity.
When William and Mary were proclaimed, there was no such thing as
a national debt. We may indeed except a comparatively small sum,
amounting to above half a million, which had been detained in exchequer
by the profligate Charles II., and applied to his own uses. But this
was not properly a state debt, nor was it acknowledged as such till a
later period.
To those who are capable of appreciating that genius which is never
so strongly shown as in connexion with political affairs, the conduct
of William is a most interesting study. It would be impossible to
exaggerate his qualities of clear-sightedness and decision; or to
select a more forcible instance of that ascendency which a man of
consummate discernment and forethought may attain, in spite of every
opposition. He had, in truth, very difficult cards to play. The
different parties, both religious and political, throughout the nation,
were so strongly opposed to each other, that it seemed impossible
to adopt any line of conduct, which should not, by favouring one,
give mortal umbrage to the others. It was reserved for William, by a
master-stroke of policy, to create a new party by new means, which
in time should absorb the others; and to strengthen his government
by attaching to it the commercial classes, by a tie which is ever
the strongest--that of deep pecuniary interest in the stability of
existing affairs. At the same time he was most desirous, without
materially increasing the taxation of England, to raise such sums
of money as might enable him to prosecute his darling object of
striking a death-blow at the ascendency of France. The scheme answered
well--possibly beyond his most sanguine expectation. Nor was it
altogether without a precedent.
"In Holland," says Mr Doubleday, "the country of his birth, the
Dutch king and his advisers found both a precedent to quote,
and an example to follow. By its position and circumstances,
this country, inconsiderable in size and population, and not
naturally defensible, had been compelled to act the part, for
a series of years, of a leading power in Europe; and this it
had only been enabled to do, by that novel arm which a very
extensive foreign trade is sure to create, and by the money
drawn together by successful trading. Venice had at an earlier
period played a similar part; but a series of struggles at
last led the huckstering genius of the Dutch into a system at
which the Venetian public had not arrived: and this was the
fabrication of paper money, the erection of a bank to issue it,
and the systematic borrowing of that money, and the creation of
debt on the part of government, for only the interest of which
taxes were demanded of the people. Here was machinery set up
and at work; and, in the opinion of interested and superficial
observers, working successfully. It was, accordingly, soon
proposed to set up a copy of this machinery in England, and in
1694, the blow was struck which was destined to have effects
so monstrous, so long continued, and so marvellous, on the
fortunes of England and her people; and the establishment,
since known as the Bank of England, was erected under the
sanction of the government."
The worst and most dangerous feature of a permanent national debt is,
that, during the earlier stages of its existence, an appearance of
factitious prosperity is generated, and the nation consequently blinded
to its remote but necessary results. The tendency to such a delusion
is inherent in human nature. _Après nous le deluge!_ is a sorry maxim,
which has been often acted on, if not quoted by statesmen, who, like
a certain notable Scottish provost, being unable to discover anything
that posterity has done for them, have thought themselves entitled
to deal as they pleased with posterity. The proceeds of the earlier
loans enabled William to carry on his wars; and the nation, puffed
up with pride, looked upon the new discovery as something far more
important and valuable than the opening of another Indies. Nor did
William confine himself merely to loans. Lotteries, tontines, long and
short annuities, and every species of device for raising money, were
patronised and urged on by the former Stadtholder, and the rage for
public gambling became uncontrollable and universal. As we have just
emerged from one of those periodical fits of speculation which seem
epidemical in Great Britain, and which, in fact, have been so ever
since the Revolution, it may be interesting to the reader to know, that
the introduction of the new system was marked by precisely the same
social phenomena which were observable four years ago, when the shares
in every bubble railway scheme commanded a ridiculous premium. We quote
from the work of Mr Francis:--
"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 suddenly rich was a
common source of ridicule. Wealth rapidly acquired has been
invariably detrimental to the manners and the morals of the
nation, and in 1692 the rule was as absolute 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 persons were radiant with gems;
they married the poorer branches of the nobility; they eagerly
purchased the princely mansions of the old aristocracy. The
brush of Sir Godfrey Kneller, and the chisel of Caius Cibber,
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 distinction at the expense of decency."
It is curious to remark that the Stock Exchange cannot be said to
have had any period of minority. It leaped out at once full-armed,
like Minerva from the brain of Jupiter. All the arts of _bulling_
and _bearing_, of false rumours, of expresses, combinations,
squeezings--all that constitute the mystery of Mammon, were known
as well to the fathers of the Alley, as they are to their remote
representatives. Nay, it would almost appear that the patriarchal
jobber had more genius than has since been inherited. William's
retinue did not consist only of mercenaries and refugees. Hovering on
the skirts of his army came the sons of Israel, with beaks whetted
for the prey, and appetites which never can be sated. _Vixere fortes
ante Agamemnona_--there were earlier vultures than Nathan Rothschild.
The principal negotiators of the first British loan were Jews. They
assisted the Stadtholder with their counsel, and a Mephistopheles of
the money-making race attached himself even to the side of Marlborough.
According to Mr Francis:--"The wealthy Hebrew, Medina, accompanied
Marlborough in all his campaigns; administered to the avarice of
the great captain by an annuity of six thousand pounds per annum;
repaid himself by expresses containing intelligence of those great
battles which fire the English blood to hear them named; and Ramilies,
Oudenarde, and Blenheim, administered as much to the purse of the
Hebrew as they did to the glory of England."
It has been estimated, upon good authority, that from fifteen to twenty
per cent of every loan raised in England, has, directly or indirectly,
found its way to the coffers of those unconscionable Shylocks; so
that it is small wonder if we hear of colossal fortunes coexisting
with extreme national depreciation and distress. We might, indeed,
estimate their profits at a much higher rate. Dr Charles Davenant, in
his essay on the _Balance of Trade_, written in the earlier part of
the last century, remarked--"While these immense debts remain, the
necessities of the government will continue, interest must be high, and
large premiums will be given. And what encouragement is there for men
to think of foreign traffic (whose returns for those commodities that
enrich England must bring no great profit to the private adventurers)
when they can sit at home, and, without any care or hazard, get from
the state, by dealing with the exchequer, fifteen, and sometimes
twenty, thirty, forty, and fifty per cent? Is there any commerce abroad
so constantly advantageous?" We apprehend not. Capital is defined by
the economists as the accumulation of the savings of industry. Such
men as Rothschild have no doubt been industrious, but not according to
the ordinary acceptation of the term. Their industry is of a wholesale
kind. It is confined to a resolute and systematic endeavour to avail
themselves of the savings of others; and we need hardly state that, in
this pursuit, they have shown themselves most eminently successful.
The remarkable change which took place in the monetary system of
England, under the auspices of William, could not, of course, have
been effected without the concurrence of parliament. That body had
certainly no reason to charge him with neglect of their interests. The
representatives of the people for the first time began to understand,
that there might be certain perquisites arising from their situation
as men of trust, which could be made available to them, provided they
were not too scrupulous as to the requirements of the crown. The
mastiff which had bayed so formidably at James and his predecessors,
because none of them would deign to cajole him, became at once amenable
to a sop. Mr Macaulay should have written: "The revolution of 1688
did not introduce the practice of regularly summoning parliaments;
what it introduced was the practice of regularly bribing them." Mr
Francis, though an apologist of King William, who, as he thinks, was
compelled to act thus from imperious necessity, is not blind to this
stigma on his memory. He also believes that the settled animosity
between England and France, which has caused so many wars, and led to
such an extravagant expenditure of blood and treasure, is mainly to
be attributed to the persevering efforts of William of Orange. The
following summary is of much interest:--
"The parliamentary records of William's reign are curious. The
demands which he made for money, the hatred to France which
he encouraged, 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 custom 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,
_that of five millions granted to carry on the war, only two
and a half millions reach 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."
These things are elements of importance in considering the political
history of the country. They explain the reason why the great bulk of
the nation never cordially supported the new succession; and why, for
the first time in English history, their own representative house lost
caste and credit with the commons. Fifty years later, when Charles
Edward penetrated into the heart of England, he met with no opposition.
If the inhabitants of the counties through which he passed did not join
his standard, they thought as little of making tiny active opposition
to his advance; thereby exhibiting an apathy totally at variance
with the high national and independent spirit which in all times has
characterised the English, and to be accounted for on no other ground
than their disgust with the new system which, even then, had swollen
the amount of taxation to an extent seriously felt by the commonalty,
and which had so corrupted parliament that redress seemed hopeless
within the peaceful limits of the constitution. The proclamation issued
by the prince, from Edinburgh, bore direct reference to the funded
debt, and to the notorious ministerial bribery; and it must have found
an echo in the hearts of many, who began to perceive that the cry of
civil and religious liberty is the standard stalking-horse for every
revolution, but that the result of revolutions is too commonly an
imperative demand upon the people for a large augmentation of their
burdens, backed too by the very demagogues who were the instigators of
the violent change. In this crisis, the moneyed interest, which William
had so dexterously created, saved the new dynasty--less, certainly,
from patriotism, than from the fear of personal ruin.
It is a memorable fact that, from the very first, the Tory party
opposed themselves strenuously to the creation and progress of
the national debt. It is well that those who, in our own times,
bitterly denounce the system which has landed us in such inextricable
difficulties, and which has had the effect of rearing up class
interests, irreconcilably opposed to each other, in once-united
England, should remember that for all this legacy we are specially
indebted to the Whigs. Except by Tory ministers, and in one case by
Walpole, no attempt has been made to stem the progress of the current;
and this consideration is doubly valuable at this moment, when it
is proposed, by a vigorous effort, to make head against the monster
grievance, and, by the establishment of an inviolable sinking-fund,
to commence that work which liberal and juggling politicians have
hitherto shamefully evaded. It is more than probable that "the moneyed
interest" will throw the whole weight of their influence in opposition
to any such movement; unless, indeed, they should begin already to
perceive that there may be worse evils in store for them than a just
liquidation of their claims. Matters have now gone so far as to be
perilous, if no practicable mode of ultimate extrication can be shown.
Real property cannot be taxed any higher--indeed, the landowners have
claims for relief from peculiar burdens imposed upon them, which in
equity can hardly be gainsaid. The property and income-tax, admittedly
an impolitic impost in the time of peace, cannot remain long on its
present footing. To tax professional earnings at the same rate as the
profits of accumulated capital, is a manifest and gross injustice
against which people are beginning to rebel. There is no choice left,
except between direct taxation and a recurrence to the system which
we have abandoned, of raising the greater part of our revenue by
duties upon foreign imports. The former method, now openly advocated
by the financial reformers, is, in our opinion, a direct step towards
repudiation. Let the fundholders look to it in time, and judge for
themselves what results are likely to accrue from such a policy.
One thing is clear, that if no effort should be made to redeem any
portion of the debt--but if, on the contrary, circumstances should
arise, the probability of which is before us even now, to call for
its augmentation, and for a corresponding increase of the public
revenue--the financial reformers will not be slow to discover that
the only interest hitherto unassailed must submit to suffer in its
turn. The Whigs are now brought to such a pass, that they cannot hope
to see their way to a surplus. We shall have no more of those annual
remissions of duties, which for years past have been made the boast
of every budget, but to which, in reality, the greater part of our
present difficulties is owing. Had a sinking fund been established
long ago, and rigidly maintained, and at the same time the revenue
kept full, the nation would ere now have been reaping the benefit of
such a policy. We should have had the satisfaction of seeing our debt
annually diminishing, and the interest of it becoming less; whereas,
by the wretched system of fiddling popularity which has been pursued,
the debt has augmented in time of peace, the annual burdens absolutely
increased, ruinous competition been fostered, and internal jealousies
excited. The Whigs, who arrogate for themselves, not only now but in
former times, the guardianship of the liberties of Britain, have taken
especial pains to conceal the fact that they were, in reality, the
authors of our funding system, and the bitterest opponents of those
who early descried its remote and ruinous consequences. Their motives
cannot be concealed, however it may be their interest at the present
time to gloss them over. Lord Bolingbroke thus exposes their occult
designs, in his "_Letters on the Use of History_."
"Few men, at the time (1688), looked forward enough to foresee
the necessary consequences of the new constitution of the
revenue that was soon afterwards formed, nor of the method of
funding that immediately took place; which, absurd as they
are, have continued ever since, till it is become scarce
possible to alter them. Few people, I say, saw how the creation
of funds, and the multiplication of taxes, would increase
yearly the power of the Crown, and bring our liberties, by a
natural and necessary progression, into more real though less
apparent danger than they were in before the Revolution! The
excessive ill husbandry practised from the very beginning of
King William's reign, and which laid the foundation of all we
feel and fear, was not the effect of ignorance, mistake, or
what we call chance, _but of design and scheme in those who
had the sway at the time_. I am not so uncharitable, however,
as to believe that they intended to bring upon their country
all the mischiefs that we who came after them experience and
apprehend. No: they saw the measures they took singly and
unrelatively, or relatively alone to some immediate object. The
notion of attaching men to the new government, by tempting them
to embark their fortunes on the same bottom, was a reason of
state to some; the notion of creating a new, that is, a moneyed
interest, in opposition to the landed interest, or as a balance
to it, and of acquiring a superior interest in the city of
London at least, by the establishment of great corporations,
was a reason of party to others: and I make no doubt that the
opportunity of amassing immense estates, by the management of
funds, by trafficking in paper, and by all the arts of jobbing,
was a reason of private interest to those who supported and
improved that scheme of iniquity, if not to those who devised
it. They looked no further. Nay, we who came after them, and
have long tasted the bitter fruits of the corruption they
planted, were far from taking such alarm at our distress and
our dangers as they deserved."
In like manner wrote Swift, and Hume, and Smith; nor need we wonder at
their vehemence, when we direct our attention to the rapid increase
of the charge. William's legacy was £16,400,000 of debt, at an annual
charge to the nation of about £1,311,000. At the death of Queen Anne,
the debt amounted to fifty-four millions, and the interest to three
millions, three hundred and fifty thousand--being nearly double the
_whole revenue_ raised by King James! The total amount of the annual
revenue under Queen Anne, was more than five millions and a half.
Under George I., singular to relate, there was no increase of the
debt. At the close of the reign of George II., it amounted to about
a hundred and forty millions; and, in 1793, just one hundred years
after the introduction of the funding system in Britain, we find it
at two hundred and fifty-two millions, with an interest approaching
to ten. Twenty-two years later, that amount was more than trebled.
These figures may well awaken grave consideration in the bosoms of
all of us. The past is irremediable; and it would be a gross and
unpardonable error to conclude, that a large portion of the sum thus
raised and expended was uselessly thrown away; or that the corruption
employed by the founders of the system, to secure the acquiescence of
parliament, was of long continuance. On the contrary, it is undeniable
that the result of many of the wars in which Britain engaged has been
her commercial, territorial, and political aggrandisement; and that
bribery, in a direct form, is now most happily unknown. The days have
gone by since the parliamentary guests of Walpole could calculate on
finding a note for £500, folded up in their dinner napkins--since
great companies, applying for a charter, were compelled to purchase
support--or when peace could only be obtained, as in the following
instance, by means of purchased votes:--"The peace of 1763," said John
Ross Mackay, private secretary to the Earl of Bute, and afterwards
Treasurer to the Ordnance, "was carried through, and approved, by
a pecuniary distribution. Nothing else could have surmounted the
difficulty. I 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 was 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 a-piece."
Still we cannot disguise the fact, that a vast amount of the treasure
so levied, and for every shilling of which the industry of the nation
was mortgaged, never reached the coffers of the state, but passed
in the shape of bonuses, premiums, and exorbitant contracts, to rear
up those fortunes which have been the wonder and admiration of the
world. Nor is it less palpable that the fortunes so constructed could
not have had existence, unless abstracted from the regular industry
of the country, to the inevitable detriment of the labourer, whose
condition has at all times received by far too little consideration.
Add to this the spirit of public gambling, which, since the Revolution,
has manifested itself periodically in this country--the sudden
fever-fits which seem to possess the middle classes of the community,
and, by conjuring up visions of unbounded and unbased wealth, without
the necessary preliminary of labour, to extinguish their wonted
prudence--and we must conclude that the funding system has been
pregnant with social and moral evils which have extended to the whole
community. Before we pass from this subject--which we have dwelt upon
at considerable length, believing it of deep interest at the present
point of our financial history--we would request the attention of
our readers to the following extract from the work of Mr Francis,
as condemnatory of the policy pursued by recent governments, and as
tending to throw light on the ultimate designs of the Financial Reform
Associations. It is quite possible that, in matters of detail, we
might not agree with the writer--at least, he has given us no means of
ascertaining upon what principles he would base an "efficient revision
of our taxation;" but we cordially agree with him in thinking that, as
we presently stand, the right arm of Great Britain is tied up, and the
Bank of England, under its present restrictions, in extreme jeopardy at
the first announcement of a war.
"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 revenue, there is a demand for the reduction
of taxation. We, a commercial people, brought up at the feet
of M'Culloch, with the books of 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 present system,
crush the artisan, paralyse 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 preserve 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 annuities 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 conversion 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 millions are paid for interest; and it is to
be feared that great evil will accompany 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,--is indisputable; but it is equally so that
great savings have been effected, and that greater efforts are
making to economise 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,
excepting 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 eight hundred millions at
which to level their Quixotic spear. Repudiation 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
required to ripen the attempt."
Turn we now from the national debt to its eldest offspring, the
Exchange. Marvellous indeed are the scenes to which we are introduced,
whether we read its history as in the time of William of Orange, enter
it at the period when the South Sea bubble had reached its utmost
width of distension, or tread its precincts at a more recent date,
when railway speculation was at its height, and the Glenmutchkin at a
noble premium. John Bunyan could not have had a glimpse of it, for he
died in 1688: nevertheless his Vanity Fair is no inaccurate prototype
of its doings. No stranger, indeed, may enter the secret place where
its prime mysteries are enacted: if any uninitiated wight should by
chance or accident set foot within that charmed circle, the alarm is
given as rapidly as in Alsatia when a bailiff trespassed upon the
sanctuary. With a shout of "Fourteen hundred fives!" the slogan of
their clan, Jew, Gentile, and proselyte precipitate themselves upon the
rash intruder. In the twinkling of an eye, his hat is battered down,
and amidst kicks, cuffs, and bustling, he is ejected from the temple of
Mammon. But, lingering in the outer court and vestibule, we can gain
some glimpses of the interior worship; imperfect, indeed, but such as
may well deter us from aspiring to form part of the congregation.
The creation and transferable character of public funds, necessarily
involved the existence of a class of men who deal in such securities.
That class multiplied apace, and multiplied so much that, after a
time, the commissions exigible for each _boná fide_ transaction could
not afford a decent subsistence for all who were engaged in the
business. People who buy into the stocks with a view to permanent
investment, are not usually in a hurry to sell; and this branch of the
profession, though, strictly speaking, the only legitimate one, could
not be very lucrative. Gambling was soon introduced. The fluctuations
in the price of the funds, which were frequent in those unsettled
times, presented an irresistible temptation to buying and selling for
the account--a process by means of which a small capital may be made
to represent fictitiously an enormous amount of stock: no transfers
being required, and in fact no sales created, the real stake being
the difference between the buying and the selling prices. But, the
natural fluctuations of the stocks not affording a sufficient margin
for the avarice of the speculators, all sorts of deep-laid schemes
were hatched to elevate or depress them unnaturally. In other words,
fraud was resorted to, from a very early period, for the purpose of
promoting gain. The following may serve as an example:--"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
colours, and returned home with their arms reversed. The funds fell
with a suddenness which marked the importance of the intelligence; and
it was remarked that, while the Christian jobbers stood aloof, almost
paralysed with the information, Manasseh Lopez and the Jew interest
bought eagerly at the reduced price." The whole thing was a lie, coined
by the astute Hebrews, who then, as now, accumulated the greater part
of their money in this disgraceful and infamous manner, and doubtless
had the audacity even to glory in their shame. A more ingenious trick
was played off in 1715, when a sham capture was made in Scotland of
a carriage and six, supposed to contain the unfortunate Chevalier St
George. The news, being despatched to London, instantly elevated the
funds, "and the inventors of the trick laughed in their sleeves as they
divided the profit." Modern jobbers will doubtless read these records
with a sigh for the glory of departed times, just as a schoolboy
bitterly regrets that he was not born in the days of chivalry.
Universal rapidity of communication, and the power of the press, have
rendered such operations on a large scale almost impossible. The
electric telegraph has injured the breed of carrier pigeons, and more
than half the poetry of fraudulent stock-jobbing has disappeared.
The range of the jobbers speedily extended itself beyond the
comparatively narrow field presented by the funds. Exchequer bills with
a variable premium were invented and brought into the market, a large
and lucrative business was done in lottery tickets, and even seats in
parliament were negotiated on the Stock Exchange. Joint-stock companies
next came into play, and these have ever since proved an inexhaustible
mine of wealth to the jobbers. Nor were they in the least particular
as to the nature of the commodity in which they dealt. Thomas Guy,
founder of the hospital called after his name, acquired his fortune by
means similar to those which are now made matter of reproach to the
Jews of Portsmouth and Plymouth. It is a curious feature in the history
of mankind, that money questionably amassed is more often destined to
pious uses than the savings of honest industry. The conscience of the
usurer becomes alarmed as the hour of dissolution draws nigh. "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 labour, 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
savings 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 uninfluential, and the orders
which were refused 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 remainder." But frauds and injustice, even when
countenanced by governments, have rarely other than a disastrous issue
to the state. So in the case of those seamen's tickets. That the wages
due to the sailor should have fallen into arrears during the reigns of
Charles and of James, need excite little surprise, when we remember
that the revenue in their day never exceeded two millions annually.
But that the abuse should have been continued after the revolutionary
government had discovered its easy method of raising subsidies--more
especially when ample proof had been given of the danger of such
a system, by the want of alacrity displayed by the English seamen
when the Dutch fleet burned our vessels in the Thames and threatened
Chatham--is indeed matter of marvel, and speaks volumes as to the gross
corruption of the times. So infamous was the neglect, that at length
the sailors' tickets had accumulated to the amount of nine millions
sterling of arrears. Not one farthing had been provided to meet this
huge demand; and in order to stay the clamours of the holders--not now
mariners, but men of the stamp of Thomas Guy,--parliament erected them
into that body known as the South Sea Company, the transactions of
which will ever be memorable in the commercial history of Great Britain.
The existence of this company dates from the reign of Queen Anne; but
for some years its operations were conducted on a small scale, and it
only assumed importance in 1719, when exclusive privileges of trading
within certain latitudes were assured to it. We quote from Mr Doubleday
the following particulars, which utterly eclipse the grandeur of modern
gambling and duplicity.
"As soon as the act had fairly passed the Houses, the stock
of the company at once rose to _three hundred and nineteen
per cent_; and a mad epidemic of speculative gambling seemed,
at once, to seize the whole nation, with the exception of Mr
Hutchison, and a few others, who not only preserved their
sanity, but energetically warned the public of the ultimate
fate of the scheme and its dupes. The public, however, was
deaf. The first sales of stock by the Court of Directors were
made at three hundred per cent. Two millions and a quarter were
taken, and the market price at one reached _three hundred and
forty_--double the first instalment according to the terms of
payment. To set out handsomely, the Court voted a dividend of
ten per cent upon South Sea Stock, being only a half-yearly
dividend, payable at midsummer 1720. To enable persons to hold,
they also offered to lend half a million on security of their
own stock; and afterwards increased the amount to a million,
or nearly so. These bold steps gained the whole affair such
an increase of credit, that, upon a bare notice that certain
irredeemable annuities would be received for stock, upon terms
hereafter to be settled, numbers of annuitants deposited their
securities at the South Sea House, without knowing the terms!
About June, when the first half-yearly dividend was becoming
due, the frenzy rose to such a pitch, that the stock was sold
at _eight hundred and ninety per cent_. This extravagance,
however, made so many sellers, that the price suddenly fell,
and uneasiness began to be manifested; when the Directors had
the inconceivable audacity to propose to create new stock at
_one thousand per cent_, to be paid in ten instalments of one
hundred pounds each. Strange to relate, this desperate villany
turned the tide again, and, to use the words of Anderson,
'in a few days the hundred pound instalment was worth _four
hundred_!'"
We invariably find that the success, whether real or pretended, of any
one scheme, gives rise to a host of imitations. If any new company,
whatever be its object, is started, and the shares are selling at a
premium, we may look with perfect confidence for the announcement of
six or seven others before as many days have elapsed. This is, of
course, partly owing to the cupidity of the public; but that cupidity
could not manifest itself so soon in a tangible form, but for the
machinations of certain parties, who see their way to a profit whatever
may be the result of the speculation. Amidst the ruin and desolation
which invariably follow those seasons of infuriated and infatuated
gambling, to which we are now almost habituated, such men preserve a
tranquil and a calm demeanour. And no wonder: they have reaped the
harvest which the folly of others has sown. At the hottest and most
exciting period of the game, they have their senses as completely
under control as the sharper who has deliberately dined on chicken and
lemonade, with the prospect of encountering afterwards an inebriated
victim at Crockford's. They may play largely, but they only do so while
their hand is safe; the moment luck changes, they sell out, and leave
the whole loss to be borne by the unfortunate dupes, who, believing in
their deliberate falsehoods, still continue to hold on, trusting to the
advent of those fabulous better times which, in their case, never can
arrive. It has been so in our own times, and it was so when the South
Sea bubble was expanding on its visionary basis. Multitudes of minor
schemes were projected, subscribed for, and driven up to an exorbitant
premium. The shares of really solid companies participated in the rise,
and mounted correspondingly in the market. The nominal value of all the
sorts of stock then afloat was computed at no less than five hundred
millions; being exactly double the estimated value of the whole lands,
houses, and real property in the kingdom!
The collapse came, and brought ruin to thousands who thought that they
held fortune within their grasp. The history of the downfall is not
less suggestive than that of the rapid rise. It has had its parallel
in our days, when the most rotten and unsubstantial of companies have
brazened out their frauds to the last, doctored accounts, declared
fictitious dividends, and threatened with legal prosecution those who
had the courage and the honesty to expose them.
"The minor bubbles burst first, when the South Sea schemers
were foolish enough to apply for a _scire facias_ against
their projectors, on the ground that _their_ schemes injured
the credit of the grand scheme. This turned quondam allies
into furious enemies. The _scire facias_ was issued on 13th
August 1720, when the downfall began; and Mr Hutchison saw
his predictions completely fulfilled. The South Sea villains,
in sheer desperation, declared a _half-yearly dividend of
thirty per cent_ due at Christmas, and offered to guarantee
fifty per cent per annum for twelve years! They might as well
have declared it for the thirtieth of February. Everything
was done to prop the reputation of the directors, but all
was in vain; and when the stock fell at last to one hundred
and seventy-five, a panic ensued, and all went to the ground
together, totally ruining thousands, and nearly dragging the
Bank and East India Company along with it."
Mr Francis gives us some interesting anecdotes of the casualties
arising from this gigantic scheme of imposture. Gay, the author of the
_Beggar's Opera_, was a holder of stock, and at one time might have
sold out with a profit of twenty thousand pounds--an opportunity very
rarely vouchsafed to a poet. In spite of shrewd advice, he neglected
his chance, and lost every penny. One Hudson, a native of Yorkshire,
who had succeeded to a large fortune, went deeply into the scheme. From
a millionnaire he became a beggar and insane, and wandered through the
streets of London a pitiable object of charity. But it would be work,
of supererogation to multiply instances of similar calamity. They are
reproduced over and over again at the conclusion of every fit of wild
and reckless speculation; and yet the warning, terrible as it is, seems
to have no effect in restraining the morbid appetite.
It would, we apprehend, be impossible to find any one who will advocate
gambling upon principle; though a multitude of excellent persons, who
would shrink with horror were the odious epithet applied to them,
are, nevertheless, as much gamblers as if they were staking their
money at _rouge-et-noir_ or _roulette_. The man who buys into a public
stock with the intention of selling in a week or a fortnight, in the
expectation of doing so at an advanced price, or the other who sells
shares which he does not possess, in the confident belief of a speedy
fall, is, in everything save decency of appearance, on a par with the
haunter of the casino. He may, if he so pleases, designate himself
an investor, but, in reality, he is a common gamester. This may be
a hard truth, but it is a wholesome one, and it cannot be too often
repeated, at a time when general usage, and yielding to temptation,
have perverted words from their ordinary significance, and led many
of us to justify transactions which, when tried by the standard of
morality, and stripped of their disguise, ought to be unhesitatingly
condemned. "He that loveth gold shall not be justified," said the son
of Sirach. "Many have sinned for a small matter; and he that seeketh
for abundance will turn his eyes away. As a nail sticketh fast between
the joinings of the stones, so doth sin stick close between buying and
selling." This spirit, when it becomes general in the nation, cannot
be otherwise than most hurtful to its welfare, since it diverts the
thoughts of many from those industrial pursuits which are profitable to
themselves and others, and leads them astray from that honourable and
upright course which is the sure and only road to wealth, happiness,
and esteem. This has been, to a certain extent, acknowledged by
government, even within our own time. The pernicious effect of the
lotteries, originally, a state device, upon the morals and condition of
the lower classes, as testified by the vast increase of crime, became
at length so glaring, that these detestable engines of fraud were
suppressed by act of parliament. They still linger on the Continent, as
most of us have reason to know from the annual receipt of documents,
copiously circulated by the Jews of Hamburg and Frankfort, offering
us, in exchange for a few florins, the chance of becoming proprietors
of several chateaux on the Rhine, with boar-forests, mineral springs,
vineyards, and other appurtenances. We presume, from the continuity
of the circulars, that Israel still finds its dupes; but we never
happened, save in one of Charles Lever's novels, to hear of any person
lucky enough to stumble on the ticket which secured the right to
Henkersberg, Bettlersbad, or Narrenstein. The extent to which lottery
gambling was carried in this country seems to us absolutely incredible.
Derby sweeps were nothing to it.
"In 1772," says Mr Francis, "lottery magazine proprietors,
lottery tailors, lottery staymakers, lottery glovers, lottery
hatmakers, lottery tea merchants, lottery barbers--where
a man, for being shaved and paying threepence, stood a
chance of receiving £10; lottery shoeblacks, lottery
eating-houses--where, for sixpence, a plate of meat and the
chance of 60 guineas were given; lottery oyster-stalls--where
threepence 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
realise 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."
A new discovery was presently made, which had a serious effect upon
trade. Money-prizes were discontinued, and shopkeepers, parcelling
out their goods, disposed of them by lottery. As a matter of course,
this business, commenced by disreputable adventurers, proved most
injurious to the regular dealer. People refused to buy an article at
the regular price, when it might be obtained for next to nothing. They
were, however, utterly wrong, for the staple of the prize goods, when
inspected, proved to be of the most flimsy description. Tickets in
the state lotteries became the subject of pawn, and were so received
by the brokers, and even by the bankers. Suicide was rife; forgery
grew common; theft increased enormously. Husbands and fathers saw
their wives and children reduced to absolute starvation, and weeping
bitterly for bread, and yet pawned their last articles of household
furniture for one more desperate chance in the lottery. Wives betrayed
their husbands, and plundered them, for the same purpose. Servants
robbed their masters; commissions and offices were sold. Insurance
was resorted to, to accommodate all classes. Those who had not money
to pay for tickets might insure a certain number for a small sum, and
thus obtain a prize; and so lottery grew upon lottery, and the sphere
was indefinitely extended. It was not until 1826 that this abominable
system, was finally crushed. The image of the vans, placards, and
handbills of Bish is still fresh in our memory; and we pray devoutly
that succeeding generations may never behold a similar spectacle.
It would be in vain for us, within the limits of an article, to attempt
even the faintest sketch of the speculative manias which, from time to
time, have affected the prosperity of Great Britain. Some of these have
been quite, as baseless as the South Sea bubble, and may be directly
traced to the agency and instigation of the Stock Exchange. Others were
founded upon schemes of manifest advantage to the public, and even to
the proprietary, if cautiously and wisely carried out; but here again
the passion for gambling has been insanely developed, and encouraged
by those who sought to make fortunes at the expense of their dupes.
There is at all times, in this country, a vast deal of unemployed
capital, which, in the cant phrase, "is waiting for investment," and
which cannot well be invested in any of the ordinary channels of
business. The fact is, that within the area of Britain, it has been
long difficult for a capitalist to select a proper field of operation;
and the tendency of recent legislation has materially increased the
difficulty. The country, in fact, may be considered as entirely
_made_. Agricultural improvement, on a large scale, which implied the
possession of a tract of unprofitable country, was considered, even
before the repeal of the corn laws, as no hopeful speculation. Since
that disastrous event, the chances have naturally diminished; and we
suspect that, by this time, very few people have any faith in Sir
Robert Peel's proposal for establishing new colonies in Connaught. When
we find the Whig Lord Monteagle denouncing free trade as the bane of
Ireland, we may be sure that few capitalists will sink their funds in
the western bogs, hoping that they may appear again in the shape of
golden grain which may defy the competition of the fertile valleys of
America. We have quite enough of factories for all the demand which is
likely to come for years: instead of building new ones, it is always
easy, if any one has a fancy for it, to purchase abandoned mills at
a very considerable discount; but we do not find such stock eagerly
demanded in the market. Foreign competition has extinguished several
branches of industry to which capital might be profitably applied, and
materially injured others; so that moneyed men really are at a loss for
eligible investment. This want has been felt for a long time; and the
uncertain policy of our ministers, with regard to colonial affairs,
has undoubtedly had an injurious effect upon the prosperity of these
dependencies. We have annihilated much of the capital invested in the
West Indies, and have withdrawn a great deal more. It is long since
Adam Smith urged the propriety and the policy of identifying some of
our more important colonies with Great Britain, by the simple process
of incorporation, thus extending materially the field of the capitalist
upon security equal to that which he can always command at home. Such
an opportunity is at this moment afforded by Canada; but it seems
that we will rather run the risk of seeing Canada merge in the United
States than make any sacrifice of our pride, even where our interest is
concerned. A considerable deal of capital has gone to Australia; but we
suspect, from late events, that the future supply will be limited.
Before the railways opened to capitalists a channel of investment which
appeared exceedingly plausible, and which was, in a great measure,
guaranteed by the result of experiment, vast masses of realised
wealth accumulated from time to time. Upon these hoards the members,
myrmidons, and jobbers of the Stock Exchange, cast a covetous eye: they
whispered to each other, in the language of King John--
"Let them shake the bags
Of hoarding abbots; angels imprisoned
Set thou at liberty: the fat ribs of peace
Must by the hungry now be fed upon:
Use our _commission_ in its utmost force."
Acting upon this principle, they made their business to find out
new channels of investment--an easier task than the discovery of a
north-western passage in the arctic regions--and to represent these in
all the glowing colours which are peculiar to the artists of 'Change
Alley.
The year 1823 was remarkable for the commencement of an epidemic
which proved, in its effects, even more disastrous than the South Sea
delusion. It would be tedious to enumerate or discuss the causes which
led to this sudden outburst; some of them have been indirectly traced
to the operation of Sir Robert Peel's famous Currency Act of 1819,
which fettered the Bank of England, whilst it left the country bankers
free to issue unlimited paper, and to the respite of the smaller notes
which had been previously doomed to extinction. Whatever may have
been the cause, speculation began and increased at a rate which was
quite unprecedented. All kinds of ridiculous schemes found favour in
the public eye: nothing was too absurd or preposterous to scare away
applicants for shares. Mining, building, shipping, insurance, railway,
colonising, and washing companies were established: even an association
for the making of gold was subscribed for to the full amount, and
doubtless a balloon company for lunar purposes would have been equally
popular. This period was marked by the apparition of an entirely new
animal in the precincts of the Stock Exchange. Bulls, bears, and even
lame ducks, were creatures coeval with its existence; but the "stag,"
in its humanised form, first appeared in 1823. The following sketch
might pass for a view of Capel Court some two-and-twenty years later:--
"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 pocket-book containing worthless scrip;
with crafty countenance and cunning eye; with showy jewellery
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 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 comparison to
the loss of honesty they each day experienced. Day after day
were elderly men with huge umbrellas witnessed 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 rumoured profit of some lucky speculator, the
rumoured failure of some great financier, or wrangling with
savage eagerness over the fate of a shilling. The scene has
been appropriated by a novelist as not unworthy of 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 any intrusion. Some lads, whose
faces announced 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 discussed
all the concerns of the nation. Every wretch was a statesman;
and each could explain, not only all that had been hinted at
in parliament, but all that was at that moment passing in the
bosom of the Chancellor of the Exchequer.'"
The sketch is not over-coloured. No one can have forgotten the sudden
swarm of flesh-flies, called from corruption into existence during
the heat of the railway mania, and the ridiculous airs of importance
which they assumed. A convulsion of this kind--for it can be styled
nothing else--does infinite injury to society; for the common greed
of gain too often breaks down the barriers which morality, education,
and refinement have reared up, and proves that speculation, as well as
poverty, has a tendency to make men acquainted with strange companions.
There were, however, features in the mania of 1823 which distinguish it
from every other. The joint-stock companies established for domestic
bubble purposes engrossed but a limited share of the public attention;
though the extent of that limitation may be estimated by the fact,
that five hundred and thirty-two new companies were projected, with
a nominal subscribed capital of £441,649,600. Of course only a mere
fraction of this money was actually put down; still the gambling in
the shares was enormous. The greater part of the capital actually
abstracted from the country went in the shape of foreign loans, of
which there were no less than twenty-six contracted during that
disastrous period, or very shortly before, to an amount of about
fifty-six millions. On sixteen of these loans interest has ceased to
be paid. We find among the borrowers such states as Chili, Buenos
Ayres, Colombia, Guatemala, Gunduljava, Mexico, and Peru, not to
mention Greece, Portugal, and Spain, countries which have set to Europe
a scandalous example of repudiation. Most of these loans purported
to bear interest at the rate of six per cent, and some of them were
contracted for at so low a figure as 68; nevertheless, with all these
seeming advantages, it appears marvellous that people should have lent
their money on such slender security as the new republics could offer.
We observe that Mr Francis has revived the antiquated scandal touching
Joseph Hume's "mistake" with regard to the Greek bonds, a story which
has been a sore thorn in the side of the veteran reformer. We think he
might have let it alone. The real mistake lay on the part of those who
assumed that Joseph's philanthropic interest in the Greek cause was so
intense as to suffer him for one moment to lose sight of his own. His
anxiety to back out of a bad bargain was perfectly natural. He never
was an Epaminondas, and he felt justly irritated at the foolishness of
the Greeks in persisting that he should sustain the heroic character,
at the expense of his privy purse, when the stock had fallen to a
discount. If, when it rose again to par, the Greek deputies were weak
enough to repay him the amount of his loss, with the uttermost farthing
of interest, that was their concern. When a senatorial sympathiser
gives the aid of his lungs to the cause of suffering humanity, he has
surely done enough. Why mulct him further from the pocket?
Those foreign loans, and the drain of bullion which they occasioned,
speedily brought on the crisis. It was a very fearful one, and for
the second time, at least, the Bank of England was in danger. It was
then that mighty establishment owed its safety to the discovery of a
neglected box of one pound notes, which, according to the evidence of
Mr Harman, one of the principal directors, saved the credit of the
country. The coffers of the bank were exhausted, almost to the last
sovereign; and but for that most fortunate box, cash payments must
have been suspended in December 1825, a position of affairs the issue
of which no human intelligence could predicate. Subsequent legislation
has not been able to guard us against the possibility of a similar
recurrence. All that has been done is to insure the certainty of an
earlier and more frequent panic, and to clog the wheels of commerce by
rendering discounts impracticable at periods when no speculation is
on foot. But as far as regards the stability of the Bank of England,
under our present monetary laws, no provision has been made, in any way
commensurate to the additional risk occasioned by the absorption of
the twenty millions and upwards lodged in the savings-banks, all which
must, when required, be repaid in the precious metals; and in case
of any convulsion, or violent alarm, it is clear that such a demand
would be made. The experience of 1832 has clearly demonstrated how
the fate of a ministry may be made to depend upon the position of the
establishment in Threadneedle Street.
It is perhaps not to be wondered at that, in a commercial country like
ours, wealth should command that respect and homage which, in other
times, was accorded to the possessors of nobler attributes. We make
every allowance for the altered circumstances of the age. High and
heroic valour, as it existed before, and undoubtedly still does exist,
has not the same field for its display as in the days when Christendom
was leagued against the Infidel, or even in those, comparatively later,
when contending factions made their appeal to arms. Our wars, when they
do occur, are matters of tactics and generalship; and physical courage
and daring has ceased to be the path to more than common renown. Where
most are loyal, and no treason is at hand, loyalty is no conspicuous
virtue. Those who are distinguished in the walks of literature and
science need not covet adulation, and very seldom can command it.
Their fame is of too noble and enduring a quality to be affected by
ephemeral applause; and it is good for them to work on in patience and
in silence, trusting for their reward hereafter. The substantiality
of wealth, the power and patronage which it commands, will inevitably
make its possessor more conspicuous in the eyes of the community, than
if he were adorned with the highest mental attributes. All things are
measured by money: and when money is acknowledged as the chief motive
power, he who knows best how to amass it cannot fail to be the object
of attention. But the marked and indiscriminate homage which is paid
to wealth alone, without regard to the character of the possessor,
or the means through which that wealth has been acquired, is, in our
estimation, a feature disgraceful to the age, and, were it altogether
new, would justify us in thinking that the spirit of independence
had declined. We shall hold ourselves excused from illustrating our
meaning by making special reference to a recent but striking instance,
in which wealth suddenly acquired, though by most iniquitous means,
raised its owner, for a time, to the pinnacle of public observation.
We prefer selecting from the pages of Mr Francis the portrait of
a man whose character displayed nothing that was great, generous,
benevolent, or noble; whose whole life and whole energies were devoted
to the acquisition of pelf; whose manners were coarse; whose person was
unprepossessing; whose mind never ranged beyond its own contracted and
money-making sphere; and who yet commanded, in this England of ours, a
homage greater than was ever paid to virtue, intellect, or valour. Such
a man was Nathan Meyer Rothschild, the famous Jew capitalist.
Originally from Frankfort, this remarkable man came over to England
towards the close of last century, and commenced operations in
Manchester, where he is said to have speedily trebled his first capital
of £20,000:--
"This," says Mr Francis, "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 these profits, Rothschild came to London. It was the
period when such a man was sure to make progress, as, clear and
comprehensive in his commercial views, he was also rapid and
decisive in working out the ideas which presented themselves.
Business was plentiful; 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 discount--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, he was, as he expected, informed that the
government required it. Government had it--but, doubtless,
paid for the accommodation. 'It was the best business I ever
did!' he exclaimed triumphantly; and he added that, when the
government had got it, it was of no service to them until he
had undertaken to convey it to Portugal."
Rothschild was, in fact, a usurer to the state, as greedy and
unconscionable as the humbler Hebrew who discounts the bill of a
spendthrift at forty per cent, and, instead of handing over the
balance in cash to his victim, forces him to accept the moiety in
coals, pictures, or cigars. His information was minute, exclusive, and
ramified. All the arts which had been employed on the Stock Exchange
in earlier times were revived by him, and new "dodges" introduced to
depress or to raise the market.
"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 sank 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 rose
instantly; and Mr Rothschild reaped his reward."
The morality of the ring has sometimes been called in question; but we
freely confess, that we would rather trust ourselves implicitly to the
tender mercies of the veriest leg that ever bartered horse-flesh, than
to those of such a man as "the first baron of Jewry"--a title which
was given him by a foreign potentate, to the profanation of a noble
Christian order.
Such were the doings of Rothschild: let us now see him in person. "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; while even
caricature lost all power over a subject which defied its utmost skill.
His person was made an object of ridicule; but his form and features
were from God. His mind and manners were fashioned by circumstances;
his acts alone were public property, and by these we have a right to
judge him. 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
publicity."
Mr Disraeli, in some of his clever novels, has drawn the portrait
of a great Jew financier in colours at once brilliant and pleasing.
His Sidonia, whilst deeply engaged in money-making pursuits, is
represented as a man of boundless accomplishment, expanded intellect,
varied information, and princely generosity. He is the very Paladin
of the Exchange--a compound of Orlando and Sir Moses Montefiore. The
extravagance of the conception does not prevent us from admiring the
consummate skill of the author, in adapting his materials so as to
elevate our ideas and estimate of the Hebrew idiosyncrasy. Sidonia is
as much at home in the palace as in the counting-room; his great wealth
ceases to be the prominent feature, and becomes the mere accessory of
the polished and intellectual man; avarice never for one moment is
permitted to appear; on the contrary, the prodigality of the munificent
Hebrew is something more than Oriental. We may refuse to believe in the
reality of such a character, which implies a combination of the most
antagonistic pursuits, and a union of mental attributes which could
not possibly coexist; but, this difficulty once surmounted, we cannot
challenge the right of so eminently gifted an individual to take his
place among the true nobility of the earth. We fear, however, that such
a phoenix of Palestine has no existence, save on paper. Certain it
is, that Rothschild was not the man; and yet Rothschild, in his day,
commanded as much homage as the novelist has claimed for Sidonia. Great
is the power of money! Princes feasted with him; ambassadors attended
him to the tomb; and yet, for all we can learn, he was not equal, in
moral worth, to the meanest pauper in the workhouse. He would at times
give a guinea to a street beggar, not for the object of relieving
his wants, but to enjoy the joke of seeing him run away, under the
apprehension that the donor had been mistaken in the coin! His wealth
was gained by chicanery, and augmented by systematic deceit; and yet
attend to the words of the chronicler:--
"Peers and princes of the blood sat at his table; clergymen
and laymen bowed before him; and they who preached loudest
against mammon, bent lowest 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
aristocracy 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 pressing charity, could exclaim, "Here, write
a cheque--I have made one--fool of myself!" was courted and
caressed by the clergy, was fêted and followed 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 before 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."
Poor as Lazarus may be, let him not envy the position of Dives. Even
in this world, riches cannot purchase happiness. Any pecuniary loss
was enough to drive Rothschild to despair. His existence was further
embittered by the dread of assassination--no uncommon symptom, when
the mind is rarely at ease; and those who knew him best, said that he
was often troubled with such thoughts, and that they haunted him at
moments when he would willingly have forgotten them. "Happy!" he said,
in reply to the compliment of a guest--"me happy! 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!" We are not compassionate enough to wish that it had
been otherwise. Such thoughts are the foreshadowing of the end of those
who have prospered beyond their deserts, and have failed in making even
that negative expiation, which conscience sometimes extorts from the
apprehensions of unscrupulous men.
And here we shall close our remarks. There is still a fertile field
before us, on which we might be tempted to enter; but that discussion
would bring us too near our own days, and involve the resumption of
topics which have already been handled in Maga. The time doubtless
will come, when, after the cessation of some new fit of speculation,
and when men are cursing their folly, and attempting by late industry
to repair their shattered fortunes, some historian like Mr Francis
shall take up the pen, and chronicle our weakness, as that of our
fathers is already chronicled. In the meantime, it would be well for
all of us seriously to lay to heart the lesson which may be drawn from
this interesting record. Speculation, carried beyond due bounds, is
neither more nor less than a repetition of the old game of BEGGAR MY
NEIGHBOUR, under another form. To fair and legitimate enterprise we
owe much of our modern improvement; which has been further rendered
necessary by the pressure which has increased, and is increasing upon
us. To unfair and illegitimate enterprise, undertaken for the sole
purpose of immediate gain, we owe nothing save periods of great misery
and desolation. The game of BEGGAR MY NEIGHBOUR may be played privately
or publicly. Some of us have taken a hand in it privately, with what
results we shall keep to ourselves. For several years back, our
statesmen have played the public game, and played it well. They have
succeeded in inflicting successively a blow upon each great interest
of the country, by dealing with each separately, and by alienating the
sympathy of the others. The game is now pretty well played out; and
when we come to reckon our counters, it is evident from the result,
that not one of the parties so dealt with has been a winner! Who, then,
are the gainers? We think the answer is plain. They are the Capitalist
and the Foreigner.
MY PENINSULAR MEDAL.
BY AN OLD PENINSULAR.
PART II.