_Legends of the Stock Exchange.—Mr. Dunbar.—Duke of
Newcastle.—French Ambassador.—James Bolland.—Extraordinary
Incident.—Fortunate Adventure.—Morals and Manners of the Stock
Exchange.—Its Constitution and Arrangements._
The early part of the present chapter is devoted to anecdotes, which,
though difficult to prove, yet bear in themselves every appearance
of reality. Many legends are thus in the debatable ground between
truth and fiction; and those which are selected are chosen from their
resemblance to fact, rather than from the actual knowledge of their
veracity.
In 1761, Mr. Dunbar, a West-Indian merchant, finding his affairs
were less prosperous than usual, sought “the Alley,” as it was
then termed, to retrieve his failing fortunes. From some private
information, he believed that he had good grounds for supposing a
peace would soon be effected, and that the funds would rise. He
therefore ordered his broker to buy £100,000 for the account; told
him the opinion he had formed, with the intelligence on which it was
based; and the latter, in violation of his oath, jobbed extensively
on his own account as well as for his client. February passed away
without the expected peace, and Mr. Dunbar paid the difference.
Confident in his views, he continued the operation; but each
account-day proved that the price had been against him, and with
great difficulty did he find money to pay the amounts due. In July,
unable to pay cash, he gave notes of hand to the broker, who agreed
to receive them. No objection being made, the account was continued
on for August. In that month the prospect of peace revived, the funds
rose, and Mr. Dunbar, seeing a chance of paying the greater part
of his losses, went with all speed to ’Change Alley. His distress
may be imagined, when he was coolly told, that, since he had given
notes of hand, no account had been opened, and no advantage could be
reaped from the rise in price. The act of Sir John Barnard rendered
any appeal to law useless; but, as Mr. Dunbar became a bankrupt, the
members of the Stock Exchange subscribed to pay the amount claimed,
in order that so flagrant a case might not become public.
One of the loans raised by the Duke of Newcastle, when prime
minister, fell, from some unforeseen accident, to three per cent.
discount. His Grace, thinking he had made an unfair bargain, or
fearing the jobbers would not lend to him again, convened a meeting
of those who had taken it, who, as well as the Duke, were greatly
frightened, not knowing what project to adopt. At length one of
them—said to be Samson Gideon—desired the minister to walk with
him into another room. There they remained for a few minutes, and
then returned in high spirits, telling the others to go home and be
perfectly easy, as care should be taken of their interest. Gideon
went immediately to ’Change Alley, and, buying up the scrip as fast
as it was offered, produced an immediate rise to one per cent. above
par.
Gambling in the funds has not been confined to commoners; and the
French ambassador at the Court of London was guilty of a deception
which marks the name of the Count de Guise with infamy. Availing
himself of his political position, he traded in English securities,
and, by the aid of his secretaries, made large sums. While success
attended the ambassador’s operations, he received the profit,
and rejoiced in his good fortune; but when a long run of bad
luck dissipated his gains, and made demands upon his purse, his
Excellency denied all knowledge of the transaction, refused to pay
the balance, retired to France, and commenced a prosecution against
his subordinates. But this was not sufficient to exonerate him
with thinking people. A memorial was published by his secretaries;
and the evidence they gave satisfied every impartial mind that the
ambassador of the Most Christian King had abused his trust, duped his
dependents, and defrauded the stock-broker.
About the middle of the eighteenth century, one of the constant
dealers in ’Change Alley, although in a small way, was James Bolland;
a man of low extraction, but of great mind, of immense impudence,
and unrivalled crime. There was nothing at which he would hesitate
to obtain money, to spend on the Stock Exchange; and, having
once commenced, he soon found that the legitimate profits of his
trade—that of a butcher—were not sufficient to support him. He
formed, therefore, a wooden weight, which, resembling one of fifty
pounds, weighed only seven pounds; and, in his capacity of tradesman
to St. Thomas’s Hospital, employed his roguery with great success.
From butcher he turned sheriff’s officer, revived every past
iniquity, invented new frauds, and spent his money in buying
lottery-tickets, to which pursuit he was passionately attached. He
robbed the broker whom he employed, alike of his mistress and his
money; and with the latter bought the place of city marshal. The
citizens, however, discovered that his character was scarcely equal
to his impudence, and refused to maintain their bargain.
Every moment he could spare was passed on the Stock Exchange,
where his pursuits were marked by a singularly bad fortune. Every
speculation went against him; he never drew a prize in the lottery;
and, finding there was a chance of his becoming penniless, he added
forgery to his long list of crimes. The fraud was discovered, the
penalty was paid at Tyburn; and James Bolland adds another to the
many proofs of the truth of the old adage.
A century ago was the hanging century; and a great fraud was
committed towards its close on the East India Company. The leading
witness—the only witness who could prove the guilt of the accused—was
accustomed to visit a house in the neighbourhood of the Bank, to be
dressed and powdered, according to the fashion of the day. Shortly
before the trial came on, a note was placed in his hands, informing
him that the attorney for the prosecution was desirous of seeing him,
at a certain hour, at his private residence, in or near Portland
Place.
At the time appointed, the witness proceeded to the house; the door
was opened, and the footman, without asking his name, ushered the
visitor into a large room, where, discussing some wine upon the
table, sat a group of gentlemen, in earnest conversation. “There is
a mistake,” exclaimed the new-comer, thinking he had been shown into
the wrong room. “No mistake, Sir,” interrupted one, in a determined
tone, while the remainder sat quietly, but sternly, by. Unable to
comprehend the scene, and, in some alarm, the visitor prepared to
leave the room. “There is no mistake,” repeated the same person,
unostentatiously stepping before the door. “I am,” he continued,
“brother to that gentleman who is to be tried for forgery, and
against whom you are the chief witness. Without your evidence he
cannot be convicted; the honor of a noble house is at stake; and
your first attempt to escape will lead to a violent death. There is
nothing to fear, if you remain quiet; but all whom you see are sworn
to detain you until the trial be over, or,” he added, after a pause,
“to slay you.” The witness was a sensible man; he saw the determined
looks of those around, and thought it best quietly to acquiesce.
In the mean time great surprise was excited in the city. That the
missing man had been inveigled away was universally believed; and
every endeavour was made to track him. Whether the calmness with
which he bore his confinement deceived his jailers is not known; but
it is certain that he effected his escape from the house, although
not so securely but that his captors were after him before he could
get out of sight. A mob collected; his pursuers declared he was an
insane nobleman, and that they were his keepers. The mob shouted with
delight at the idea of a mad lord; and the unfortunate man was on the
point of being again confined, when a chariot drove up. The inmate,
a lady, desired the coachman to stop, and listened to the counter
statements of the pursued and his pursuers. Remembering the current
story of a missing witness, she opened the carriage, he sprung in,
the door was closed, and the lady, to whom he told his story, ordered
her coachman to drive with all speed to the Old Bailey. It was the
last day; the case, which had been postponed, was being tried; and
the missing witness was just in time to place the rope around the
neck of the unhappy forger.
In the memorable year 1815, a member of the Stock Exchange found
that, notwithstanding all his exertions to save his credit, his
name stood every chance of gracing that blackboard on which so many
appeared during the eventful period. Melancholy and meditating, he
wandered forth, scarcely knowing the direction which he took, until
from London Bridge he gazed gloomily upon the “dark flowing river,”
half doubting whether its depths would not be his best abiding-place.
In this mood he was hastily greeted by a voice he knew; and, turning
round, was rapidly informed of news which at once turned his thoughts
back to that world he had felt inclined to quit. The stranger had
just arrived from the spot where the great battle of modern history
had been fought; and the ruined jobber become the depositary of a
secret which at once restored his spirits. Hastily learning all the
particulars which might affect him, he retraced his steps, found
the price unaltered, and the news, therefore, unknown. Without
hesitation, he made large purchases of stock. All that was to be
procured he bought; and, as the secret which had that morning sent
him gloomily away was not even guessed, he was able to purchase very
largely. He availed himself of his opportunity; and ere long had
cause to congratulate himself on his good fortune, as, when the news
arrived, the price rose sufficiently to clear all his difficulties,
and leave him a profit of £20,000.
The morals and the manners of the Stock Exchange are difficult to
treat. Morals too often fade before money-making; and manners are
regarded as unnecessary in the same eager pursuit. Nor is Capel
Court an exception. When the fate of a jobber depends on the turn
which the market may take,—when sorrow or success hangs upon a
word,—when family, friends, and fortune are in the balance, and a
rumored falsehood may sink or save,—it is not in humanity to resist
the temptation; and it has, unhappily, become too general a practice
to stop at no invention, and to hesitate at no assertion, which may
assist the inventor. From this cause the Stock Exchange is rarely
mentioned with that respect which it merits, as the theatre of the
most extensive money transactions in the world. Public opinion
punishes the many for the few. The great mass of its members have
not power to disseminate an untruth. The brokers, bound not to
speculate on their own account, have no interest in doing so; the
small jobber cannot influence the price; many are too high-minded to
avail themselves of dishonorable methods; and it is, therefore, to a
particular class that the Stock Exchange owes its false reports, its
flying rumors, and its unenviable notoriety. Capel Court is, indeed,
a complete anomaly. There are men of high character and station in
its body; there is every endeavour made by its executive to abolish
all which tends to make it despicable; the greatness of its dealings
are unequalled; some of its members are members of the senate; others
are honorable in spite of the temptations which surround them; it is
consulted by chancellors, and taken into the councils of ministers;
peace or war hangs upon its fiat; and yet the Stock Exchange is
seldom named, out of the city, but with contempt; and a Stock
Exchange man is, like the moneyed man in the early reign of William,
despised by the landed, and looked down upon by the mercantile,
aristocracy. One reason, perhaps, for this is, that the great mass
of their transactions are without the pale of the law. All their
time-bargains—and the Stock Exchange might close to-morrow if these
were abolished—are illegal. They are, strictly speaking, gambling
dealings, which our judicature refuses to recognize; and the dealers
are gamblers, whom the legislature will not acknowledge.
The tricks which are resorted to are numerous. The penniless
speculator can enter into transactions which may retrieve his
fortunes, or consolidate his ruin. It is said to be a not uncommon
trick for two persons to agree together in the following manner:—one
buys and the other sells for the account to the largest amount for
which each can procure credit. One must lose, and the other must
gain. One becomes a millionnaire, the other a defaulter. The former
receives a large amount, the latter is declared on the blackboard.
A division of the spoils is afterwards privately effected; and the
gainer pursues his avocation in the funds, while the loser becomes a
prosperous gentleman.
The public cannot be too decidedly warned against the dangers to
which they may be exposed in legitimate transactions. On one
occasion, a merchant having requested his broker to purchase a
certain amount of stock, and having concluded the business, was
surprised in the evening to hear his broker announced as a visitor.
Some remark being made, the latter stated that a dispute had arisen
with the jobber about the price which was in the receipt, and he
should be glad to take it with him as an evidence of his correctness.
Knowing that a stock receipt is in itself of no value, the buyer
readily complied. His visitor thanked him, and from that moment was
never heard of. The receipt was false, the names were forged; and,
secure in the possession of all evidence against him, the broker
sought a foreign land in which to enjoy his unrighteous gains.
If the morals of the Stock Exchange be as described, its manners are
as curious. It is not long since the papers reported a limb broken
in sport. The writer has perused in the journals occasional duels
which have arisen from the “fun” of the members; and the courtesies
of life are wanting if a stranger ventures among them. When this is
the case, instead of the bearing of gentlemen, the first discoverer
of the intruder cries out, “Fourteen hundred fives!” and a hundred
voices reëcho the cry. Youth or age is equally disregarded; and the
following description of what occurred to an unhappy visitor will
attest the truth of that which has been asserted:—
“Not long ago, a friend of my own, ignorant of the rule so rigidly
enforced for the expulsion of strangers, chanced to drop in, as
he phrased it, to the Stock Exchange. He walked about for nearly
a minute without being discovered to be an intruder, indulging in
surprise at finding that the greatest uproar and frolic prevailed in
a place in which he expected there would be nothing but order and
decorum. All at once, a person, who had just concluded a hasty but
severe scrutiny of his features, sent out, at the full stretch of
his voice, ‘Fourteen hundred.’ Then a bevy of the gentlemen of the
house surrounded him. ‘Will you purchase any new Navy five per cent.,
Sir,’ said one, eagerly, looking him in the face. ‘I am not——’; the
stranger was about to say he was not going to purchase stock of any
kind, but was prevented finishing his sentence by his hat being,
through a powerful application of some one’s hand to its crown, not
only forced over his eyes, but over his mouth also. Before he had
time to recover from the stupefaction into which the suddenness and
violence of the eclipse threw him, he was seized by the shoulders,
and wheeled about as if he had been a revolving-machine. He was then
pushed about from one person to another, as if he had only been the
effigy of some human being, instead of a human being himself. After
tossing and hustling him about in the roughest possible manner,
denuding his coat of one of its tails, and tearing into fragments
other parts of his wardrobe, they carried him to the door, where,
after depositing him on his feet, they left him to recover his lost
senses at his leisure.”
In a graphic picture of the Stock Exchange, drawn by one who had
every opportunity of testing its truth, the following will confirm
the above description, and affords an interesting evidence of the
civilization of the Stock Exchange in 1828:—
“I turned to the right, and found myself in a spacious apartment,
which was nearly filled with persons more respectable in appearance
than the crew I had left at the door. Curious to see all that was to
be seen, I began to scrutinize the place and the society into which
I had intruded. But I was prevented from indulging the reflections
which began to suggest themselves, by the conduct of those about
me. A curly-haired Jew, with a face as yellow as a guinea, stopped
plump before me, fixed his black, round, leering eyes full on me, and
exclaimed, without the slightest anxiety about my hearing him, ‘So
help me Got, Mo, who is he?’ Instead of replying in a straightforward
way, Mo raised his voice as loud as he could, and shouted with might
and main, ‘Fourteen hundred new fives!’ A hundred voices repeated
the mysterious exclamation. ‘Fourteen hundred new fives!’ ‘Where,
where,—fourteen hundred new fives,—now for a look; where is he?
Go it, go it!’ were the cries raised on all sides by the crowd,
which rallied about my person like a swarm of bees. And then Mo,
by way of proceeding to business, repeating the war-cry, staggered
sideways against me, so as almost to knock me down. My fall, however,
was happily prevented by the kindness of a brawny Scotchman, who,
humanely calling out, ‘Let the mon alone,’ was so good as to stay me
in my course with his shoulder, and even to send me back towards Mo
with such violence, that, had he not been supported by a string of
his friends, he must infallibly have fallen before me. Being thus
backed, however, he was enabled to withstand the shock, and to give
me a new impulse in the direction of the Scotchman, who, awaiting my
return, treated me with another hoist as before, and I found these
two worthies were likely to amuse themselves with me, as with a
shuttlecock, for the next quarter of an hour. I struggled violently
to extricate myself from this unpleasant situation, and, by aiming a
blow at the Jew, induced Moses to give up his next hit, and to allow
me for a moment to regain my feet.
“The rash step which I had taken was likely to produce very
formidable consequences. All present were highly exasperated. The war
became more desperate than ever. Each individual seemed anxious to
contribute to my destruction; and some of their number considerately
called out, ‘Spare his life, but break his limbs.’
“My alarm was extreme; and I looked anxiously round for the means of
escape.
“‘You ought to be ashamed of yourself to use the gentleman in that
sort of way,’ squeaked a small, imp-like person, affecting sympathy,
and then trying to renew the sport.
“‘How would you like it yourself,’ cried another, ‘if you were a
stranger?’ shaking his sandy locks with a knowing look, and knocking
off my hat as he spoke.
“I made a desperate blow at this offender. It did not take effect,
from the expedition with which he retreated, and I had prudence
enough to reflect that it would be better to recover my hat than
to pursue the enemy. Turning round, I saw my unfortunate beaver,
or ‘canister,’ as it was called by the gentry who had it in their
keeping, bounding backwards and forwards between the Caledonian and
his clan and the Jew and his tribe.
“Covered with perspiration, foaming with rage, and almost expiring
from heat and exhaustion, I at last succeeded. I did not dare to
reinstate it, but was forced to grasp it with both hands, in order
to save what remained of it. I baffled several desperate snatches,
one of which carried away the lining, and was now trying to keep the
enemy at bay, afraid again to attack the host opposed to me, but
not knowing how to retreat, when a person who had not previously
made himself conspicuous approached and interfered. ‘Really, you had
better go out’; at the same time pointing to a door I had not seen
before.”
Comment is unnecessary; and, however the practice may be repudiated
by the members when out of the house, there are few who would not, in
it, act in a similar disreputable mode.
The constitution of the Stock Exchange is simple. Governed by a
committee of twenty-eight, with a chairman and deputy-chairman,
annually elected by the members, their power to expel, suspend, or
reprimand is absolute; their decision final; and that decision,
adds one of the rules, “must be carried out forthwith.” In cases
of expulsion, the committee should not consist of less than
twelve; and of these, at least two thirds must concur in the
sentence. No bill or discount broker, no clerk in any public or
private establishment,—excepting those to the members of the Stock
Exchange,—no one in business, either in his own name or in that
of his wife, can be received as member. Every applicant must be
recommended by three members of two years’ standing, who must each
give security for £300 for two years. The committee meets every
alternate Monday, at one o’clock; but a special meeting may at any
time be called by the chairman and deputy-chairman, or by any five
members. Brokers and jobbers, or dealers, as they are politely
termed, are not allowed to enter into partnership; and, when a
defaulter is excluded, his clerk is excluded with him.
Directly the books are closed at the Bank of England, the price of
stocks, excepting only bank stock, is quoted without the dividend.
When a defaulter, or one who cannot or will not pay the just claims
on him, is posted, a libel is avoided by the following words:—“Any
person transacting business with A. B., is requested to communicate
with C. D.”
The rules of the Stock Exchange amount in number to 159, and are
calculated to meet every difficulty. The charge to the public for
buying and selling English stock is 2_s._ 6_d._ per cent.; and the
following, taken from the third edition of Mr. Robinson’s valuable
“Share Tables,” is the commission on shares:—
_s._ _d._
Under the value of £5 1 3 per cent.
Amounting in value to £5, and under £20 2 6 ”
” ” £20, ” £50 5 0 ”
” ” £50 and above 10 0 ”
The terms used on the Stock Exchange have been in vogue for more
than a century; and the origin of many may be traced to the early
transactions in the stock of the East India Company. Buying for the
account has been described; but “bull” and “bear,” “backardation” and
“continuation,” are understood only by the initiated.
“Bull” is a term applied to those who contract to buy any quantity of
government securities, without the intention or ability to pay for
it; and who are obliged, therefore, to sell it again, either at a
profit or loss, before the time at which they have contracted to take
it.
“Bear” is a term applied to a person who has agreed to sell any
quantity of the public funds, of which he is not possessed, being,
however, obliged to deliver it against a certain time.
“Lame Duck” is applied to those who refuse or are unable to fulfil
the contracts into which they have entered.
“Backardation” is a consideration given to keep back the delivery of
stock, when the price is lower for time than for money.
“Continuation” is a premium given when the price of funds in which a
person has a jobbing account open is higher for time than for money,
and the settling day is arrived, so that the stock must be taken at
a disadvantage. In this case a percentage is paid to put off the
settlement, and continue the account open.
“Jobber” is applied to those who accommodate buyers and sellers of
stock with any quantity they require. The dealer or jobber’s profit
is generally one eighth per cent.
The “Broker” is the person employed by the public to sell or purchase
stock at a certain percentage.
“Omnium” is a term used to express the aggregate value of the
different stocks in which a loan is usually funded.
“Scrip” is embryo stock, before the whole of the instalments are paid.