WISE MEN AT SUPPER
In such a country as Holland was at the time of our story, the prime
subject of interest to persons engaged in commerce was the state of the
Exchange. By this, the merchants not only found their own affairs
determined, but were furnished with an indication of the general
condition of trade at home and abroad. As by the Exchange, the debts of
individuals residing at a distance from their creditors are cancelled
without the transmission of money, the state of the Exchange marks out
clearly in which country there has been the greatest amount of purchase,
and in which of sale. It affords no indication of the positive amount of
purchase and sale, because when this is nearly balanced between
different countries, the exchange nearly preserves its level; or, to use
technical language, is nearly at par. But the relative amount is
infallibly shown by the exchange of any country being above or below
par; and this circumstance serves to guide individuals in the conduct of
their transactions.
Instead of discharging debts to foreigners in the manner taken for
granted by Christian,--viz., by transmitting money to a foreign land, as
they would to the grocer's or the wine-merchant's in the next street,
exporters and importers were early obliged, by an absurd enactment
against the exportation of money, to devise some expedient for paying
each other without using gold and silver. The most obvious way was to
set against one another the values of things bought and sold, so that
the balance was all that remained to be discharged. When it did not
happen that the same firm at home had bought of the same firm abroad to
whom it had sold, it was only necessary to find another firm at home
which had bought in the same market abroad, and to exchange
acknowledgments of debt, up to the amount at which the respective debts
balanced one another; and these acknowledgments of debt served as money,
in the same way as the promissory notes of bankers. In 1190, (which is
the earliest recorded date of the practice of exchanging debts,) if an
English merchant sold 100_l._ worth of cider into Holland, and his Dutch
connexion had sold to another London merchant 90_l._ worth of fat
cattle, the readiest way of paying the greater part of the debt was for
the Dutchman to refer his cider-selling correspondent to his neighbour,
the importer of cattle, for 90_l._: 10_l._ would still remain due; and
as the Dutchman was prohibited from sending it in gold and silver, he
would look about for some neighbour who had 10_l._ owing to him from
England, and would say, "I will pay you 10_l._, if you will desire your
debtor to pay the same sum to my correspondent on the other side the
water." By this simple mutual accommodation, the expense and risk of
sending large sums of money are avoided; the postage, and the stamp
charged by government upon such transactions, are the only cost
incurred; and the whole process of buying and selling is simplified to
all parties.
The convenience of this method being found great, it was improved as
commerce increased, till a market was established where merchants might
meet and make their exchanges without loss of time, instead of having to
run after one another in search of what each wanted. The next thing was
to institute a class of persons whose express business should be to
manage these transactions. These persons, the bill-brokers, can tell how
nearly the debts of different countries balance each other; and it is
they who first purchase, and then provide merchants with these
acknowledgments of debt, which circulate instead of money. These
disposable acknowledgments, called bills of exchange, bear a very small
proportion to the bargains between any two trading countries; because,
where there is considerable intercourse, the sales of one party
generally nearly balance those of the other. The nearness of their
approach to a balance determines the price of those bills which remain
to be sold, or which are desired to be bought. When bills are scarce,
and merchants have difficulty in procuring these ready means of
discharging their debts, they are anxious to pay a price for them, in
order to be spared the inconvenience of transmitting money. A
competition ensues, and it becomes generally known that the country
where the bills are scarce has bought more than it has sold; that it
owes more money than it has to receive; that (to use the technical term)
the exchange is unfavourable to that country. The reverse is known to be
the case when there is a superabundance of bills in the market; so that
the merchants of a great trading country anxiously watch the
exchange-market, not only to get their own debts settled, but to learn
the general condition of commerce.
In order to the immediate detection of an alteration in the course of
exchange, it was desirable to have a certain fixed point of calculation
to which all variations might be referred. This fixed point was called
the par of the exchange, and denoted, when it was first instituted, a
perfect equality of exchange, both of goods and money, between the
trading parties. The exchange between Holland and Great Britain was at
par when the two countries sent exactly the same amount of wealth to
each other. Supposing ten guilders to go to a pound, the exchange would
be at par when the Dutch exported to England one thousand guilders'
worth of commodities, and imported from England one hundred pounds'
worth of commodities. So that, so long as ten guilders go to a pound,
and Holland and England exchange the same quantity of goods, the
exchange will not vary, really or seemingly, from the fixed point of
calculation. It is only the one country exporting more goods than the
other which can really make the amount of value due greater from one
than the other: but, because ten guilders have not always gone to a
pound, more money has sometimes appeared to be due from one than the
other, even while the quantity of goods exchanged has been precisely the
same, as computed in anything but the altered money. When eleven
guilders go to the pound, while the par of exchange is still called ten,
more money will appear to be due from Holland to England for the same
quantity of goods as before; and consequently, while the actual state of
trade will be exactly the same as before, it will be declared on 'Change
that the exchange has turned against Holland; _i. e._, that Holland owes
more money to England than she has to receive. However, merchants whose
interest it is to watch the course of exchange, easily distinguish the
real from the nominal variation, and learn to make use of the fixed
point of calculation with due allowance for the difference caused by the
alterations in the value of money. They can ascertain what they want to
know of the general state of commerce, in the midst of what would be, to
an inexperienced person, a deception; and a merchant who has, by any
rare accident, been prevented from going on 'Change, only wants to know
the nominal variation from par, and to compare it with his knowledge of
the respective currencies of the two countries, to satisfy himself as to
which ought to push its exports, and which its imports.
The first question asked by one Dutch merchant of another, in Heins's
time, usually related to the exchange. It was that which his old friend
Jakob greeted him with this evening, as, punctual to the appointed
moment, he entered the apartment where Francesca and supper were waiting
to honour and be honoured by him.--Heins saw at a glance that better
entertainment was provided for him than his wealthy parents had ever
thought fit to indulge him with. It had been their method to surround
themselves with whatever was essential to comfort, and whatever served
as a good investment for their money; but, in all articles of mere
consumption, they had been frugal in a way which Slyk and his daughter
seemed little disposed to imitate. While the Snoeks' cellars were full
of choice French wines and brandies, they drank beer only. While
preparing the richest butter and cheese which their fat meadows could
produce, their servants and children must be content with an inferior
kind, imported salt. Not thus was Jakob's table furnished by his fair
daughter. On the present occasion, it looked very tempting. Placed
between the windows, so that the eaters might enjoy the amusement of
observing the passers by, without the table itself being seen from
without, one source of entertainment, always acceptable to a Dutchman,
was secure. There was no lack of odoriferous foreign fruits, of flasks
whose aspect was not to be mistaken, or of more substantial delicacies
from the native pastures and decoys. This array was reflected from each
corner of the apartment by mirrors, so placed as to exhibit every object
within ken, from the train of passengers on the bridge at the bottom of
the street, and the slow-moving barge advancing in an opposite
direction, to the beau-pots filled with tulips which stood on the floor
in corresponding angles of the apartment. What made the aspect of the
place the most dazzling to Heins was, that there were four Francescas,
each differing from the other according to the direction in which the
gazer looked. Here, the profile of the pretty face and the jewelled arm
were most conspicuous; there, the closely fitting jacket, and the knot
of hair fastened behind with a silver pin. Now, the bright eyes looked
out from between the two ringlets which curled exactly to the same turn
on the foreheads of all Dutchwomen; and again, the yellow slipper was
seen to rest on the chauffe-pied, whose constant use must infallibly
spoil the form of the most beautiful foot that ever trod the quays of
Amsterdam. At the further end of this radiant apartment leaned old
Jakob, prepared with questions about how matters looked on 'Change: in
the middle sat Francesca, deeming it no affront that such affairs were
considered of the first importance, even in her presence; and between
them stood Heins, commercial _con amore_ one moment, and awkwardly
gallant the next, till the familiarity of the evening meal enabled him
to make his attentions to the father and the daughter more compatible
than it had at first appeared possible to render them.
"They may talk of our commerce having declined," said Slyk, "but there
is no nation like the Dutch, after all. Our refugee divines preach to
more purpose to us than they did in France, about the wisdom of Solomon
in his traffic with Hiram, king of Tyre, and all the riches that he
gained thereby. We are a people obedient to the Divine word, Mr. Heins;
and it pleases Heaven to prosper our industry, in spite of seeming
obstacles. Even Solomon's wisdom was not taxed to procure cedar and
shittim wood in the face of king Hiram's prohibitions; but we have done
as much in getting the exchange with England turned in our favour,
notwithstanding her late jealous enactments."
Francesca was of opinion that Holland was now under a special divine
blessing for having received and cherished the Huguenots who had been
driven from France. Heins thought that this opinion was countenanced by
the fact that a considerable part of the prosperity of the States was
derived from the industry of these very refugees. On the other hand,
England was also open to the Huguenots, and it was against England that
the exchange had turned.
This was a difficulty easily answered, Jakob said. England was punished
for her jealousy; for her unneighbourly conduct towards the States. Was
it not Heins's belief that a vast importation of brandies, velvets, and
jewellery from Dutch vessels had been going on in England of late?
"Certainly," replied Heins. "While we can gain no more than two, or, at
most, three per cent. on our capital at home, we must invest it abroad,
even at some risk; and this has been done in England to such an extent
that the government there must be a little surprised at the present
course of the exchange. Visscher has put but a small per centage in his
pocket to-day, I rather think; for there is such an abundance of bills
on England in the market, and so few are present to buy, that the
business has been very languid."
"There will soon be an end of that," replied Slyk. "A flood of this kind
of money is presently absorbed. It is not like our hard gold, or our
bank money, which rests at the disposal of one nation instead of two."
Heins suggested that bank money was like a ball sent up by a solitary
player, which might return or be lost according to the skill or
awkwardness with which it was thrown; whereas exchange money was a
shuttlecock played between two nations, which was sure to visit each in
turn, as long as both were interested in keeping up the game. This
flight of fancy, so much more French than Dutch, enhanced Francesca's
admiration of the accomplishments of the young merchant. She was not
aware, however, that bills of exchange could be exactly called money.
She knew that they might, in one sense, be so considered, as they
discharged debts; but debts might also be discharged by barter, where no
money was present.--Heins explained that bills of exchange form an
actual currency, temporary in its nature, like bank paper, but
possessing all the requisites of a medium of exchange.
"I have been using one as money this very day," he continued. "You must
know,--(I do not hesitate to speak openly before friends)--I have been
trying my fortune, while others did, in a venture to England. I am not
in the habit of exporting, as you know; but I shipped a snug package of
velvets, which certain great folks are at this moment wearing, perhaps
in the king of England's own presence. I was paid in a bill drawn on a
timber merchant here, payable at usance;----you know what that means?"
Familiar as the term was, the young lady did not know what it meant.
Heins explained that bills are paid either at sight, or at a certain
specified time after date, or at the period which is pointed out by the
custom or law of the place on which the bill is drawn; which period is
called the usance of the place. At Amsterdam this was one month after
date. Heins went on,
"I was, at the same time, desirous of purchasing some powder and ball,
which I had a fine opportunity of disposing of. I therefore offered this
bill,--not to the owner of the powder, (who would leave Amsterdam before
the bill became due, and would have charged me whatever it might cost
him to have it changed for a different kind of money,)--but to my friend
Visscher, the bill-broker, who sold me a bill on Copenhagen, which
suited my powder-merchant's convenience, and put a profit into
Visscher's pocket, and saved me the necessity of calling any money out
of the Bank. So you see this bill was real money in my hands, is so now
in Visscher's, and may be again in a hundred other hands before the
month is up."
Slyk thought commerce would slacken grievously if bills did not serve as
a circulating medium, as well as being the means of liquidating debts.
If people were obliged to depend on their individual stock of money for
the prosecution of all their undertakings, they would be stopped short
at the outset of many a fine speculation: whereas by having access to
the credit-bank (viz. the exchange market), and thus being able to
exchange their credit for cash, at a small sacrifice, facilities were
afforded, and an equalization of demand was established which was highly
favourable to an extensive and beneficial employment of capital. This
was the advantage of bills bearing date, instead of being, in all
instances, payable at sight. When payable at sight, they were not of
course money; and every protraction of date was equivalent to an
increase in the quantity of money; as the bill passed through more
hands, the longer it had a separate existence from the cash it
represented.
"I suppose, then," said Francesca, "that your new undertaking is to be
carried on by the help of this kind of money. But perhaps bills of
exchange do not circulate so far inland."
"I have nothing to do but to exchange them for inland bills, or for
cash," observed her father. "Snoek, you say that foreign bills
superabound on 'Change. What say you to some of the spare capital which
is afloat being lent to me for a grand and beneficial design which I
have in hand some way up the country?"
"I have little or no money to spare just at this time," replied Heins:
"for the present state of the exchange, you see, is just that which
makes it desirable for us to import to the utmost. I must invest in
British produce as much as I can gather together while bills on Britain
are cheap. But there must be many exporters who are slackening their
business till the exchange turns. They will be ready enough to let you
have money at little or nothing above the common rate of interest. What
is your object?"
"I told you that I might give you news of your mother this evening. I
saw her yesterday morning, and all the children; and I may see her again
once or twice a week, if I am enabled to carry on my design. In that
case, I shall settle in her near neighbourhood."
"And Fransje,"--inquired Heins, looking with an appearance of anxiety
towards the lady,--"Fransje, will you leave us too?"
"I shall delight in being so near your mother," replied Fransje. "And
those dear children, I could sit by Christian's couch from morning till
night. He is so interesting! It is so soothing too, to one's heart, to
be able to cheer such a sufferer!"
Heins knew that Fransje's presence did not usually cheer Christian's
spirits, but quite the reverse. He remembered also that Fransje never
could sit beside the invalid for half an hour together, unless there was
some one present to admire her assiduity; while Gertrude, who said
nothing about the pleasure, had frequently held the boy in her arms for
hours during his agony, and kept her seat through a long summer's day
when Christian could not, with all his endeavours, keep his temper with
anybody else. Heins smiled vaguely, however, upon Fransje's
protestations: and when talk of business was resumed, her fancy wandered
on into the days when she might enact the applauded sister-in-law, in
return for the desirable establishment she should have obtained as the
lady of the rising merchant, Heins Snoek.
"You remember," said Jakob, "the fine vein of turf that runs from the
dyke at Winkel to the lake twenty miles inland. I have often said, as I
suppose many others have, that it is a shame that vein is not worked."
Heins had heard that there were many doubts whether it would be worth
while to excavate this turf till labour should be cheaper in the north,
and more fuel required for the increasing population. Slyk, however, had
an answer to every objection.
"If it was merely to dig up a single cargo of turf," said he, "I grant
you it would not be worth while to transport labourers from the South.
But mine is a very extensive plan indeed. In the first place, this turf
lies only two feet below the surface, and it is seven feet deep. It will
be some time before we exhaust such a vein, twenty miles in length. O, I
assure you, the breaks are nothing; merely caused by the intersecting
dykes. We have only to cross over, and begin again at the distance of a
few feet.--Permission! can you suppose we shall be refused permission to
improve the land as we proceed, to the great advantage of the owners?
Yes; to their great advantage; as you will say when you have heard the
whole of my scheme. We shall not make a swamp of the excavation. No, no.
We will leave the honour of making inland lakes to our ancestors. I do
not wonder that you take fright at the idea of a new lake, twenty miles
long. I mean, instead of a lake, to have a fat green meadow, stretching
from Winkel to nearly the opposite coast."
Did not water always rise where turf was cut? Heins asked. Would not the
proprietors of the soil object that no share of the fuel procured would
compensate to them for having their fields turned into a bog? Slyk
assured him that nothing was further from his thoughts than parting with
the turf so near home. At Winkel, Heins was reminded, there was a
strand, backed by a line of sand-hills, where the accumulated
cockle-shells of a million of tides were heaped. On these hills a range
of kilns was to be erected to convert the cockle-shells into lime to
manure the wet soil by filling up the spaces from which the turf was
dug. From this strand was the fuel to be shifted, in order to command a
sale in every town and village on the Zuyder Zee, and the coasts with
which it communicated. The next thing would be to import lean Danish
cattle, to fatten on the meadows enriched by the produce of the
lime-kilns. From these arose visions, in Heins's fancy, of unfathomable
depths of butter, innumerable multitudes of cheeses, of dairy farms
rising on the slope of every dyke, and vessels entering each creek and
bay along the shore. Slyk had succeeded in captivating his mercantile
imagination far better than Francesca the nobler part of the faculty.
While turf was the only object in the picture, Heins doubted and weighed
as a Dutchman should; but when above the turf there were meadows, and on
the meadows cattle, with dairy farms in the fore-ground, lime-kilns in
the distance, and shipping on the horizon, Heins was carried away by a
vehement desire to have a share in all this enterprise; to be in part
master of this grand new creation. He was little aware on what a shaking
bog all this superstructure of hopes was built.
Slyk had many requisites for the conduct of a speculation. He had
enterprise; he had experience; and he had not the restraint of a
conscience; but he had also no money: at least, he had what in Holland
at that time was called no money. He had enough in house, furniture,
clothes, and jewels to have sold for what would comfortably maintain
himself and his daughter; but this was poverty, in the eyes of the Dutch
merchants of 1696. To have no disposable funds, was a degree of poverty
at which many a boor would have been alarmed; and it was so
extraordinary a case, that Slyk's whole endeavour was to keep his plight
a secret, and to get out of it as soon as he could. As he was rather
changeable in his employments, it was not very easy to track him; and
his manner was of that imposing kind which commonly bespeaks conscious
wealth; so that Heins was excusable for concluding, with the rest of the
world of Amsterdam, that old Jakob Slyk was rich. So rapidly did his
supposition rise, this day, to conviction, that he was presently
conscious of lamenting that he had destined so much of his disposable
capital to investments in foreign produce; and pondering how much he
could extricate, to be applied in Slyk's speculation.
"You mean to conduct the whole yourself," he said. "You speak of
settling on the spot."
"Certainly, and you must visit your mother frequently, to see how the
work proceeds. You will go with us to-morrow, if you really think of
taking a share. You will go over the ground with me."
Heins thought of the business which required his attention at home; of
the cargoes to be unloaded; the foreign letters to be looked for in the
present condition of the exchange; and the necessary observation of
commercial affairs, for which his partner could scarcely find time for
some days after his entrance upon his new office. Heins feared he could
not go.
Francesca intimated that she was to accompany her father, and spoke of
the family party at Winkel. Heins hesitated, but feared he must delay.
Slyk let drop that Gertrude was to go in the same boat to pay her
promised visit to Mrs. Snoek; and then, after much talk about hesitation
and difficulty, Heins found, at last, that he could contrive to get away
for a few days. There were certain signs of vexation in her countenance
which her father endeavoured to screen from observation by fixing
Heins's attention on himself. He expatiated on his own fitness for the
undertaking, from the experience he had had in the management of all
conceivable affairs that can come within the province of a money-maker.
To judge by his own intimations, he must be the richest man in the
States. He instanced all the occasions of his gains, and none of his
losses.
"Trust me to manage labourers," said he. "I shall scarcely have such
trouble with another set as I had with my fourteen boatmen, once upon a
time, at the outset of the herring-fishery. Fransje, you remember that
stormy 24th of June?"
"Yes, indeed," replied Fransje. "The sea lashed the dyke as if it had
been mid-winter, as the fishermen went to church. Their wives followed
trembling, and said it was blasphemy to ask a blessing on the fishery,
if their husbands tempted Providence by going out in such a storm. By
midnight, most of the men thought so too; and the moment of sailing
passed away while they stood on the dyke, each boat's company looking at
the rest, to see what they meant to do. I well remember the flashes of
lightning disclosing the tossing row of empty boats."
"Not all empty, however," observed Slyk. "I led the way, and it was not
ten minutes after midnight when the last of my crew stepped on board. I
had the advantage of their being Catholics, however. There was only one
Calvinist; and he was nearly enough to spoil the whole, till I took him
on the side of predestination. Then he was quiet enough; and the
Catholics set up one saint against another, so as to leave a balance of
probabilities that we should get safe home."
Heins laughed, though in some constraint, through wonder that the
sanctimonious Jakob should thus come out in the new character of a
joking adventurer. Did the party get safe home? he asked.
"Safe! yes; and much more than safe. We ran for the Brill; and had the
luck to get in first; as was very just, since we were the first to go
out,--only five minutes after the legal time, remember, in a midsummer
tempest. We brought in a fine cargo, and sold every fish at a ducat.
That was equally agreeable to Catholic and Calvinist."
"And which were you?"
"Oh, we were all of one faith that day;--that the first herrings of the
season are special gifts of Providence to the Dutch of all persuasions.
You should have seen the scramble there was for our cargo. All the sick
people in the place, or their nurses, came out to get a fresh herring as
an infallible cure; and those in health were almost equally eager. We
were not disposed to doubt the recipe which brought in ducats as fast as
if they had been stivers."
"You make a point of having a fresh herring, the first day of the
season," remarked Francesca, looking doubtfully at her father, whom she
had never before heard to question the soundness of the popular belief
in the sovereign efficacy of the first-caught herrings.
"And always shall, my dear, while I have a ducat to buy one with. I am
only pointing out the advantage that it was to me and my men that they
had a leader over them who knew how to manage them. One quarter of an
hour later, and the Brill would have been supplied from another buss.
This is not the only time, Heins, that I made a little fortune at sea in
one trip. It is some years ago now,--but I remember as if it was
yesterday,--a singular little expedition that I made during the war. To
be sure, there was sufficient danger in it, and nicety enough required
to make me remember it pretty distinctly; but really, I could fancy, (if
you had not told me the course of the exchange to-day,) that the French
were still before our ports. Poor fellows! a very provoking thing was
near happening to two or three of their captains. They would have been
obliged to refuse battle with our ships, and make the best of their way
home, if it had not been for me. I helped them to some of their
laurels."
"You helped the French to their laurels!" exclaimed Heins in
astonishment. "How did you do that? and why?"
"I have by nature,--I should say, I owe to Providence a high sense of
justice," replied Slyk, gravely. "I could never bear to see any
advantage gained, even by my own country, where there was not fair play;
and I can never consider battle conducted on equal terms when one party
has plenty of ammunition, and the other little or none. This was the
case in the instance I speak of."
"So you robbed the French ships of ammunition, in order to afford the
Dutch fair play. Truly, the gallant French would not have cared much for
laurels won from a defenceless enemy."
"You mistake the matter quite," replied Slyk. "If the deed you describe
would have been patriotic, mine was much more so, and in a very refined
way. It was the French who wanted powder and ball. But I did not rob the
Dutch. What was obtained from them was by their own free will. I went to
meet a vessel on its way from the Baltic with ball, and made rapid sail,
so as to fall in with the French just in time to supply them with the
means of keeping up the fight."
"But the powder: the Baltic vessel did not furnish you with powder, I
suppose."
"The powder I was obliged to afford at a less advantage to myself, The
Dutch commander was willing enough to furnish me, out of his
superfluity, with what I wanted; but he insisted on such a price as left
me small profit. I told him it was hardly worth the risk of stealing my
way through the smoke to the other side of the enemy, for so small a
share of the profits as I pocketed. But, between us, we carried off a
pretty lump of French money; enough to console our commander for being
beaten, and to compensate to me for the risk and the toil. It was hard
and hot work handing up on one side the ship the ammunition which was to
be fired into the Dutchman from the other; but both parties might thank
me for securing them fair play."
Heins's veneration for Dutch genius rose higher than ever. He doubted
whether any country could produce a parallel to this instance of
practical wisdom. But there was more for him to hear:--many a narrative
of expeditions up and down the Rhine, when sugar, coffee, and woollen
cloths were disposed of to unheard of advantage at every village on the
way up, and enormous rafts of timber swept down the stream in return,
bearing the exulting Jakob home to the country of which Heins began to
think him a conspicuous ornament. Many a region had he also supplied
with earthenware, and his exploits in tobacco-pipes were enough of
themselves to immortalize his commercial genius. The Winkel adventure
now appeared a moderate and purely rational affair, and Heins himself
began to see the expediency of enlarging the speculation yet further by
adding a tobacco-pipe manufactory to their establishment, if, as was
expected, the right kind of earth was found to be plentiful near any
spot of the twenty miles of turf soil.
"You will be ready to go with us early to-morrow to see your mother,"
said Fransje, quitting the table to make her preparations for departure.
"To view the ground," added her father.
Heins rose as he replied that, in order to do so, he must hasten away to
consult his partner on the whole affair, and make arrangements for
diverting some of his capital from other channels in order to engage in
this new object. But he would see what could be done in a few hours.
Slyk assured him that there was no haste about the advance of capital,
as there was abundance in hand; that he had better view the ground
before he decided anything, or troubled his illustrious partner at so
busy a time with an important affair, of which all the details could not
yet be presented. Heins agreed not to trouble his partner further at
present than to send him a note of excuse for an absence of a few days
on a visit to Winkel.
Slyk told the truth when he said that he had at present abundance of
money for the carrying on of his enterprise. It by no means followed
that it was his own. Whose it was depended upon circumstances yet
future; depended, not only on whether the speculation should terminate
favourably or unfavourably, but on the length of time that it could be
carried on.
Slyk's plan was one very common among adventurers. It was to raise money
by drawing and re-drawing inland bills of exchange, in combination with
two men of a genius of as high an order as his own. The Dutch banks were
not all like the great bank of Amsterdam. There were some in every large
town in the states which were very like banks in general, and which were
subject to imposition from adventurers. From the coffers of two or three
of these banks Slyk's friends contrived to extract capital for his
purposes, taking the chance of the enterprise turning out well enough to
enable them to replace what they now borrowed on false pretences.
Slyk drew a bill upon honest Hugo Cats of Haerlem, payable two months
after date. Not that Cats owed Slyk anything; but in consideration of
being allowed to draw in his turn for the amount, with interest and
commission, he permitted the supposition of a debt. In order to avoid
suspicion, the re-drawing was done through a third party, Cats drawing
his bill, before the expiration of the two months, on Geysbuk of
Rotterdam; who, in his turn, was to draw on Slyk before the expiration
of the further two months. The bill returned on Slyk must bear, of
course, a great accumulation of interest and commission, but he trusted
to his enterprise to pay off all; and his immediate object was answered
in the bankers' gold being obtained which was to enable him to make his
first payments to his labourers, and to the proprietors of the vein of
turf from which he expected so much wealth. Interest was low, at this
time: a sure sign that the profits of stock were also low; but Slyk
intended that _his_ profits should be unlike those which followed every
other investment of capital, and justify, by the issue, his plan of
raising money by circulation.
The bankers were rendered unsuspicious, not only by the comparative
infrequency of fraudulent speculation at a time and in a country where a
needy merchant was a phenomenon almost unheard of, but by the mode in
which the bills were indorsed. Several names appeared on the back of
each bill; and these and the shortness of the date together gave an
appearance of security to the whole affair. It was scarcely likely that
all these parties should fail before the expiration of the two months,
even if the drawer and acceptor had been considered persons of doubtful
credit. But there was no reason for questioning any part of the
proceeding. The re-drawing was always done in good time to prevent any
attention being fixed upon the previous bill; and the first advance of
money seemed to have been gained so easily, that the parties resolved to
repeat the experiment, if they failed to obtain, at a less cost, the
funds they wanted, from Heins, or from some other rich merchant, young
and uncontrolled enough to be made a dupe. Meantime, the speculators
amused themselves with contemplating the unconscious security of all
whom they had made their tools;--of the bankers from whose coffers they
had abstracted their capital, and of such of the indorsers as were no
worse than careless, and who therefore little dreamed of the necessity
which might arise for their paying for the delinquency of the drawer. If
they were disposed to complain of the hardship of each indorser being
liable for the amount of a protested bill, (that is, of a bill which the
acceptor cannot pay,) they should have been more careful to ascertain
the soundness of the credit with which they linked their own.
There was little liability of this kind incurred with respect to foreign
bills of exchange; the Dutch merchants of that period being cautious and
experienced in their dealings with strangers. But, at home, suspicion
was nearly laid asleep in a state of things which afforded rare occasion
to a spirit of adventure, and little temptation to fraud. Where money
abounded to such a degree as to bring down the rate of interest to the
lowest point, and to constitute every trader a man of substance, capital
was little in request, and could be had almost for the asking. Slyk had
the art to make his own use of the security thus generated, and to
obtain capital, at a greater cost certainly than if he had been able to
prove himself a trustworthy person, but freed from the necessity of
manufacturing this kind of proof. He preferred having to pay heavy
interest and commission at last, to allowing attention to be fixed upon
his honour and his substance; and the views of his companions were
congenial with his own.