What is to be done with the money which is realised in the ordinary
course of affairs, has latterly become a kind of puzzle. There it goes
on accumulating as a result of industry; but what then? A person can
but eat one dinner in the day; two or three coats are about all he
needs for the outer man; he can but live in one house at a time; and,
in short, after paying away all he needs to pay, he finds that he has
not a little over for--investment. Since our young days, this word
investment has come remarkably into use. All are looking for
investments; and as supply ordinarily follows demand, up there rise,
at periodical intervals, an amazing number of plans for the said
investments--in plain English, relieving people of their money. A few
years ago, railways were the favourite absorbents. Railways, on a
somewhat more honest principle, may possibly again have their day.
Meanwhile, the man of money has opened up to him a very comprehensive
field for the investment of his cash: he can send it upon any mission
he chooses; he may dig turf with it, or he may dig gold; he may catch
whales, or he may catch sprats, or do fifty other things; but if he
see it again after having relinquished his hold upon it, he must have
exercised more discretion than falls to the lot of the majority of Her
Majesty's lieges in their helter-skelter steeple-chasing after 20 per
cent. Our present business, however, is not with legitimate
speculation, but with schemes in which no discretion is exercised, or
by which discretion is set to sleep--in a word, with bubble
investments; and the history of many of the most promising of these
speculations may be read in the following brief and not altogether
mythical biography, of an interesting specimen which suddenly fell
into a declining way, and is supposed to have lately departed this
life.
The Long Range Excavator Rock-Crushing and Gold-Winning Company was
born from the brain of Aurophilus Dobrown, Esq., of Smallchange Dell,
in the county of Middlesex, between the hours of ten and eleven at
night on the 14th of October 1851. It was at first a shapeless and
unpromising bantling; but being introduced to the patronage of a
conclave of experienced drynurses, it speedily became developed in
form and proportion; and before it was ten days old, was formally
introduced, with official garniture, to the expectant public, by whom
it was received with general approbation and favour. The new company,
in a dashing prospectus, held forth a certain prospect of enormous
advantages to shareholders, with an entire exemption from
responsibility of every sort. The shares were a million in number, at
one pound each, without any further call--on the loose-cash principle,
and no signing of documents. Aurophilus Dobrown was chairman of the
committee of management.
The intentions of the company, as detailed at length in their eloquent
prospectus, were to invade the gold regions of the Australian
continent with a monster engine, contrived by the indefatigable
Crushcliff, and which, it was confidently expected, would devour the
soil of the auriferous district at a rate averaging about three tons
per minute. It was furnished, so the engineer averred, with a stomach
of 250 tons capacity, supplied with peristaltic grinders of steel of
the most obdurate temper, enabling it with ease to digest the hardest
granite rocks, to crush the masses of quartz into powder, and to
deposit the virgin gold upon a sliding floor underneath. The machine
was to be set in motion by the irresistible force of 'the pressure
from without,' and 1000 pounds-weight of pure gold per diem was
considered a very low estimate of its powers of production. These
reasonable expectations being modestly set forth in circulars and
public advertisements, and backed by the august patronage of the
respectable and responsible individuals above named, the Long Range
Excavator Company speedily grew into vast repute. The starving herd
encamped in Stagg's Alley, flew at once to pen, ink, and paper, and
applications for shares poured in by thousands. Referees were hunted
up, or they were not--that is no great matter. Half a million of the
shares were duly allotted; and that done, to the supreme delectation
of the stags, Mr Stickemup the broker, in conjunction with his old
friend and colleague Mr Knockemoff, fixed the price of shares by an
inaugural transaction of considerable amount, at 25 per cent. above
par, at which they went off briskly. Now were the stags to be seen
flying in every direction, eager to turn a penny before the inevitable
hour appointed for payment on the shares. It was curious to observe
the gradual wane of covetousness in the cerval mind; how, as the
fateful hour approached, their demand for profit grew small by degrees
and beautifully less. From 4s. premium per share to 3s.; from 3s. to
2s.; from 2s. to 1s.; and thence to such a thing as 9d., 8d., 7d., and
still downwards, till, as the hand of the dial verged upon the closing
stroke of the bell, they condescended to resign their Long Range
Excavators to the charge of buyers who _could_ pay for the shares they
held. The company was now fairly afloat. By the aid of
A few clever riggers to put on the pot,
To stir it round gently, and serve while 'twas hot,
the shares rose higher than had been expected. Aurophilus Dobrown sold
his 50,000 at a handsome premium, and realised what he was pleased
privately to term 'something substantial' by the speculation. The
public became enthusiastic on the subject of the Long Range
Excavators, and for a few short weeks they were the favourite
speculation of the market. By and by, however, a rumour began to be
whispered about on the subject of the monster-machine, the stomach of
which, it was secretly hinted, was alarmingly out of order, and
resisted all the tonics of the engineer. It was currently reported
among parties most interested, that from late experiments made,
previous to embarkation, it had been ascertained beyond a doubt, that
though the peristaltic apparatus digested pints with perfect ease, it
yet rejected quartz--a defect which it was but too plain would be
fatal to the production of gold. The effect of this rumour was most
alarmingly depressing upon the value of the shares. In a few days,
they fell 50 per cent. below par, with few buyers even at that. At
this juncture, it was discovered that one of the directors was
actively bearing the market; but the discovery was not made before
that disinterested personage, who had previously disposed of the whole
of his original allotment at a handsome premium, had secured above
10,000 new shares at a cost of about half their upset value. A
colleague openly accused him of this disgraceful traffic at a general
meeting of the directors, and declared that he had not words to
express his disgust at one who, for the sake of his own personal
profit, could condescend to depreciate the property of his
constituents. The accused retorted, and the meeting growing stormy and
abusive, ended late at night with closed doors.
A few days after, affairs again began to take a turn upwards. The
failure of the engine was declared to be an erroneous and altogether
unfounded report. It was boldly asserted, that the small model-engine
of one inch to the foot, had actually crushed several masses of Scotch
granite, and eliminated seven or eight ounces of pure metal; and these
specimens were exhibited under a glass-case in the office of the
company, in proof of their triumphant success. Now the shares rose
again as rapidly as they had lately fallen, and honourable gentlemen
who had held on, had an opportunity of turning themselves round. It is
to be supposed that some of them at least did that to their
satisfaction; at anyrate, the respectable and responsible concocters
of the Long Range Excavator Rock-Crushing and Gold-Winning Company
very soon began to turn their backs upon the public altogether. By
degrees, the whole body of directors, trustees, counsel and agents,
dwindled down to a solitary clerk paring his nails in a deserted
office. Shares at a discount of 60, 70, 80, 90 per cent. attested the
decline of the speculation. Honourable gentlemen were reported to have
gone upon their travels. The office was at first 'temporarily closed,'
and then let to the new company for Bridging the Dardanelles on the
Tubular Principle. The engine of the Long Range Excavators, according
to the last report, had foundered--but whether in the brain of
Crushcliff, the engineer, or on the Scilly Rocks, we could not clearly
make out. The only one of the original promoters who has latterly
condescended to gratify the gaze of the public, is the Baron
Badlihoff, who, a few days ago, made his appearance on the
monkey-board of an omnibus, whence he was suddenly escorted by
policeman B. 1001, to the presence of a magistrate, who
unsympathisingly transferred him to Clerkenwell Jail, for certain
paltry threepenny defalcations, due to a lapse of memory which our
shameful code persists in regarding as worthy of incarceration and
hard labour. He is now an active member of a company legally
incorporated under government sanction, for grinding the wind upon the
revolving principle. It is not precisely known when the first dividend
on the Long Range Excavators will be declared. Sanguine speculators in
the L. R. E., and the Thames Conflagration Company, expect to draw
both dividends on the same day. In the meantime, the books are safe in
the custody of Messrs Holdem Tight and Brass, of Thieves' Inn; and
ill-natured people are not wanting, who insinuate that they constitute
the only property available for the benefit of the shareholders.
Let us now take a glance at a snug little commercial bubble, blown
into being by 'highly respectable men,' a private affair altogether,
which never had a name upon 'Change, and was managed--we cannot say to
the satisfaction of all parties--by the originating contrivers,
without making any noise in the papers, or exciting public attention
in any way. We will call it, for the sake of a name, 'The Babel and
Lowriver Steam Navigation Company.' Lowriver is a pleasant, genteel
little village, which has of late years sprung suddenly into existence
on the coast of ----shire, and has been growing, for the last seven
years, with each succeeding summer, more and more a place of favourite
resort with the inhabitants of Babel. Mr Montague Whalebone took an
early liking to the place, and built a row of goodly houses by the
water-side, and a grand hotel at the end of the few stumps of pitchy
stakes dignified by the name of the pier. But the hotel lacked
customers, and the houses wanted tenants; and the whole affair
threatened to fall a prey to river-fog and mildew, when the Babel and
Lowriver Steam Navigation Company came to the rescue, and placed it
upon a permanent and expansive footing. Of the original constitution
of this snug company, it is not easy to say anything with certainty.
All we know is, that, some seven years ago, it was currently spoken of
in private circles as a capital investment for money, supposing only
that shares could be got: _that_ was the difficult thing. Large
dividends were to be realised by building four steamers, and running
them between Babel and Lowriver. Upon the neat hot-pressed prospectus,
privately and sparingly circulated--it was whispered that it was too
good a thing to go a begging--appeared the names of Erebus Carbon,
Esq., of Diamond Wharf; of Montague Whalebone, Esq., of Lowriver; of
Larboard Starboard, Esq., ship-builder; and Piston Rodd, Esq., of the
firm of Boiler & Rodd, engineers, as directors. The shares were L.20
each, liable to calls, though no calls were anticipated; and it was
reckoned an enormous favour to get them. Traffic in shares was
discountenanced: the company had no wish to be regarded as a cluster
of speculators, but rather as a band of brothers, co-operating
together for their common benefit. Of course, the necessary legal
formalities were gone through--that could not safely be dispensed
with.
In spite of the difficulty of obtaining shares, a pretty large number
of them got into the hands of the respectable portion of the public,
and the whole were soon taken up. The boats were built by Larboard
Starboard, Esq.; and the engines, as a matter of course, were put on
board by Messrs Boiler & Rodd; Erebus Carbon, Esq., supplied, at the
current rates, the necessary fuel; and at all hours of the day the
vessels ran backwards and forwards, carrying customers to Mr Montague
Whalebone's hotel, and lodgers to the new tenements, which soon began
to rise around it in all directions. Lowriver took amazingly, and rose
rapidly in public estimation; the boats filled well, and the
speculation promised great things. When, however, after several mouths
of undeviating prosperity, the shareholders began to look for some
return for their capital in the shape of a dividend, each one of them
was individually surprised by a 'call:' L.5 a share was wanted to
clear off urgent responsibilities. 'The outfitting costs had been
greater than was foreseen,' and the demands upon the shareholders were
not likely to be limited to the first call. The victims rushed, as
they were invited to do, to the office, to inspect the accounts. The
engineer was there to receive them, and, all suavity and politeness,
submitted every fact and figure to their investigation. There was
nothing to be found fault with--everything was fairly booked; but
there was a heavy balance dead against the company. The engineer
himself put a long face upon the affair, and shrugged his shoulders,
and mumbled something about having burned his own fingers, &c. After
this, reports soon got abroad very prejudicial to the value of the
investments. Then came the winter, during which few passengers
travelled to Lowriver; and with Christmas came another L.5 call.
People grew tired of paying 20 per cent. for nothing, and many
forfeited their shares by suffering them to be sold to pay the calls.
This game went on for nearly three years--all 'calls' and no
dividends; until at length it would have been difficult to find five
persons out of the original 500 who held shares in the Babel and
Lowriver Steam Navigation Company, and there was next to nobody left
to _call_ upon.
Years have rolled on since then. Lowriver has grown into a popular and
populous marine summer residence. Mr Montague Whalebone, who knew what
he was about, having bought and leased the building-ground, has become
the owner of a vast property increasing in value every day. Larboard
Starboard, Esq., is on the way to become a millionaire, and has
several new boats building for the company's service at the present
moment. Messrs Boiler & Rodd have quintupled their establishment, and
are in a condition to execute government contracts. Erebus Carbon,
Esq., has found a market in the company for hundreds of thousands of
tons of coal, and, from keeping a solitary wharf, has come to be the
owner of a fleet of colliers. At this hour, the company consists of
six individuals--the four original projectors, and a couple of old
codgers--'knowing files,' who had the penetration, in the beginning,
to see through the 'bearing dodge,' and would not be beaten or
frightened off. They paid up every call upon shares, and bought
others--and then, by shewing a bold front, asserted a voice in the
management, and crushed in to a full and fair share of the profits.
They have made solid fortunes by the speculation; while the original
shareholders, whose money brought the company into existence, have
reaped nothing but losses and vexation in return for their capital.
But enough, and more than enough, on the score of the delusive farces
which, with pretences almost as transparent as the above, are from
time to time played off for the purpose of easing the public of their
superfluous cash. Let us glance briefly at a speculation of a
different kind, no less a bubble as it proved, but one whose tragic
issues have already wrought the wreck of many innocent families, and
which, at the present moment, under the operation of the Winding-up
Act, is darkening with ruin and the fear of ruin a hundred humble
abodes. We have good reason to know its history too well; and we
shall, in as few words as possible, present the facts most important
to be known to the reader's consideration, with the view of
inculcating caution by the misfortunes of others, and shewing at the
same time how possible it is, under the present law regulating
joint-stock partnerships, for an honest man, by the most inadvertent
act, to entail misery upon himself, and destitution upon his
offspring.
It is some fifteen or twenty years ago, since a company of two or
three speculative geniuses issued a plan for establishing, in a
delightful glen situated but a few miles from a well-known Welsh port
in the Bristol Channel, a brewery upon an extensive scale. The
prospectus, as a matter of course, promised to the shareholders the
usual golden advantages. The crystal current which meandered through
the valley was to be converted into malt-liquor--so great were the
natural and artificial advantages which combined to effect that
result--at one-half the cost of such a transformation in any other
locality; and the liquor produced was to be of such exquisite relish
and potency, that all Britain was to compete for its possession. So
plausible was everything made to appear, that men of commercially
acquired fortune, of the greatest experience, and of long-tried
judgment, invested their capital in the fullest confidence of success.
Following their example, tradesmen and employers did the same; and, in
imitation of their betters, numbers of persons of the classes of small
shopkeepers and labouring-men invested their small savings in shares
in the 'Romantic Valley Brewery.' The number of joint-proprietors
amounted in all to some hundreds, holding L.20 shares in numbers
proportioned to their means or their speculative spirit. Not one in
fifty of them knew anything of the art of brewing, or had any
knowledge of the locality where the scheme was to be carried out; but
no doubt was entertained of the speedy and great success which was
promised.
The land was bought, the necessary buildings were substantially
erected, and the three principal concocters of the scheme, one of whom
was a lawyer, were appointed to manage the concern, and empowered to
borrow money in case it should be wanted, to complete the plant, and
to work it until the profits came in. They had every advantage for the
production of a cheap and superior article: labour, land-carriage, and
water-carriage, were all at a low charge in the neighbourhood; and
materials, upon the whole, rated rather under than over the average.
Year after year, however, passed away, and not a farthing of dividend
came to the shareholders; promises only of large profits at some
future period--that was all. It happened that none of the shareholders
had invested any very large sums, and this was thought a fortunate
circumstance, as none of them felt very deeply involved. The rich had
speculated with their superfluity, and they could bear to joke on the
subject of the Romantic Valley, though they shook their heads when the
supposed value of the shares was hinted at. The poor felt it more, and
some of the neediest sold their single shares or half-shares at a
terrible discount, while they would yet realise something. As time
rolled on, several of the older proprietors died off, and willed away,
with the rest of their property, the Romantic Valley Brewery shares to
their friends and relatives. A considerable number of them thus passed
from the first holders to the hands of others, one and all of whom
naturally accepted the legacies devised to them, and gave the
necessary signatures to the documents which made the shares their own.
Meanwhile, the managers went on working an unprofitable business,
borrowing money on the credit of the joint proprietors; and in the
face of all the advantages upon which they plumed themselves, plunged
deeper and deeper into debt, until, being forced to borrow at a high
rate of interest to pay for the use of former loans, they found their
credit, in the thirteenth year of their existence, completely
exhausted; and then the bubble burst at once in ruin, utter and
complete, overwhelming all who were legally connected with it, either
by original purchase, by transfer, or by inheritance. Independent
country gentlemen, west-country manufacturers, and merchants of
substantial capital, were summarily pounced upon by the fangs of the
law, and all simultaneously stripped of everything they possessed in
the world. Professional men, the fathers of families genteelly bred
and educated, were summarily bereft of every farthing, and condemned
in the decline of life to begin the world afresh. Not a few, seized
with mortal chagrin at the horrible consummation of an affair which
had never been anything but a source of loss and annoyance, sunk at
once into the grave. Others--accustomed perhaps for half a century to
the appliances of ease and luxury, and who were the owners of
hospitable mansions, the centres of genteel resort--at the present
moment hide their heads in cottages, and huts, and eleemosynary
chambers, where they wither in silence and neglect under the cold
breath of alien charity. Some, at threescore, are driven forth from a
life of indulgence and inactivity, to earn their daily bread. Young
and rising tradesmen, who had had the misfortune to inherit from a
relative or a patron but a few shares, or even a single one, saw
themselves at once precipitated into bankruptcy. One case, for which
we can personally vouch, is beyond measure distressing: a gentleman of
good fortune dying, had bequeathed to each of a large family of
daughters a handsome provision; shortly before the bursting of the
fearful bubble, the mother also died, dividing by will her own fortune
among the young ladies, and leaving to each one a few shares in the
Romantic Valley Brewery. The transference of these shares to the
several children made the whole of them liable to the extent of their
entire property; and the whole six unfortunates were actually beggared
to the last farthing, and cast upon the world to shift as they might.
To detail the domestic desolation caused by this iniquitous affair,
would require the space of a large volume. It has wrought nothing but
wretchedness and ruin to those to whom it promised unexampled
prosperity, and it is yet working still more--nor is it likely to
stop, for aught that we can see, so long as it presents a mark for
legal cupidity. All that could be got for the creditors has been
extorted long ago from the wealthier portion of the victims; but the
loans are not yet all liquidated, and the claim yet remaining
unsatisfied, is now the pretext under which the lawyers are sucking
the life-blood from the hard-working and struggling class of
shareholders, who, while industriously striving for a respectable
position, are considered worth crushing for the sake of the costs,
though they will never yield a penny towards the debt.
Besides the persons who have the settlement of affairs in their hands,
the original concocters of the company are the only persons who have
profited from its operations. They indeed ride gloriously aloft above
the ruin they have wrought. The process by which they have managed to
extract a lordly independence for themselves, from a scheme which has
resulted in the destitution and misery of every other participator, is
a mystery we do not pretend to fathom in this case--though it is one
of by no means unusual occurrence in connection with bubble-companies
of all sorts.