CHAPTER XLI.

THE STOCK EXCHANGE.

The Kingdom of Change Alley--A William III. Reuter--Stock Exchange

Tricks--Bulls and Bears--Thomas Guy, the Hospital Founder--Sir John

Barnard, the "Great Commoner"--Sampson Gideon, the famous Jew

Broker--Alexander Fordyce--A cruel Quaker Criticism--Stockbrokers

and Longevity--The Stock Exchange in 1795--The Money Articles in the

London Papers--The Case of Benjamin Walsh, M.P.--The De Berenger

Conspiracy--Lord Cochrane unjustly accused--"Ticket

Pocketing"--System of Business at the Stock Exchange--"Popgun

John"--Nathan Rothschild--Secrecy of his Operations--Rothschild

outdone by Stratagem--Grotesque Sketch of Rothschild--Abraham

Goldsmid--Vicissitudes of the Stock Exchange--The Spanish Panic of

1835--The Railway Mania--Ricardo's Golden Rules--A Clerical Intruder

in Capel Court--Amusements of Stockbrokers--Laws of the Stock

Exchange--The Pigeon Express--The "Alley Man"--Purchase of

Stock--Eminent Members of the Stock Exchange.

The Royal Exchange, in the reign of William III., being found

vexatiously thronged, the money-dealers, in 1698, betook themselves to

Change Alley, then an unappropriated area. A writer of the period

says:--"The centre of jobbing is in the kingdom of 'Change Alley. You

may go over its limits in about a minute and a half. Stepping out of

Jonathan's into the Alley, you turn your face full south; moving on a

few paces, and then turning to the east, you advance to Garraway's; from

thence, going out at the other door, you go on, still east, into Birchin

Lane; and then, halting at the Sword-blade Bank, you immediately face to

the north, enter Cornhill, visit two or three petty provinces there on

your way to the west; and thus, having boxed your compass, and sailed

round the stock-jobbing globe, you turn into Jonathan's again."

Sir Henry Furnese, a Bank director, was the Reuter of those times. He

paid for constant despatches from Holland, Flanders, France, and

Germany. His early intelligence of every battle, and especially of the

fall of Namur, swelled his profits amazingly. King William gave him a

diamond ring as a reward for early information; yet he condescended to

fabricate news, and his plans for influencing the funds were probably

the types of similar modern tricks. If Furnese wished to buy, his

brokers looked gloomy; and, the alarm spread, completed their bargains.

In this manner prices were lowered four or five per cent. in a few

hours. The Jew Medina, we are assured, granted Marlborough an annuity of

L6,000 for permission to attend his campaigns, and amply repaid himself

by the use of the early intelligence he obtained.

When, in 1715, says "Aleph," the Pretender landed in Scotland, after the

dispersion of his forces, a carriage and six was seen in the road near

Perth, apparently destined for London. Letters reached the metropolis

announcing the capture of the discomfited Stuart; the funds rose, and a

large profit was realised by the trick. Stock-jobbers must have been

highly prosperous at that period, as a Quaker, named Quare, a watchmaker

of celebrity, who had made a large fortune by money speculations, had

for his guests at his daughter's wedding-feast the famous Duchess of

Marlborough and the Princess of Wales, who attended with 300 quality

visitors.

During the struggle between the old and new East India Companies,

boroughs were sold openly in the Alley to their respective partisans;

and in 1720 Parliamentary seats came to market there as commonly as

lottery tickets. Towards the close of Anne's reign, a well-dressed

horseman rode furiously down the Queen's Road, loudly proclaiming her

Majesty's demise. The hoax answered, the funds falling with ominous

alacrity; but it was observed, that while the Christian jobbers kept

aloof, Sir Manasseh Lopez and the Hebrew brokers bought readily at the

reduced rate.

The following extracts from Cibber's play of _The Refusal; or, the

Ladies' Philosophy_, produced in 1720, show the antiquity of the terms

"bull" and "bear." This comedy abounds in allusions to the doings in

'Change Alley, and one of the characters, Sir Gilbert Wrangle, is a

South Sea director:--

_Granger_ (_to Witling, who has been boasting of his gain_): And all

this out of 'Change Alley?

_Witling:_ Every shilling, sir; all out of stocks, puts, bulls,

shams, bears and bubbles.

And again:--

There (in the Alley) you'll see a duke dangling after a director;

here a peer and a 'prentice haggling for an eighth; there a Jew and

a parson making up differences; there a young woman of quality

buying bears of a Quaker; and there an old one selling refusals to a

lieutenant of grenadiers.

[Illustration: CAPEL COURT.]

The following is from an old paper, dated July 15th, 1773: "Yesterday

the brokers and others at 'New Jonathan's' came to a resolution, that

instead of its being called 'New Jonathan's,' it should be called 'The

Stock Exchange,' which is to be wrote over the door. The brokers then

collected sixpence each, and christened the House with punch."

One of the great stockbrokers of Queen Anne's reign was Thomas Guy, the

founder of one of the noblest hospitals in the world, who died in 1724.

He was the son of a lighterman, and for many years stood behind a

counter and sold books. Acquiring a small amount of ready cash, he was

tempted to employ it in Change Alley; it turned to excellent account,

and soon led him to a far more profitable traffic in those tickets with

which, from the time of Charles II., our seamen were remunerated. They

were paid in paper, not readily convertible, and were forced to part

with their wages at any discount which it pleased the money-lenders to

fix. Guy made large purchases in these tickets at an immense reduction,

and by such not very creditable means, with some windfalls during the

South Sea agitation, he realised a fortune of L500,000. Half a million

was then almost a fabulous sum, and it was constantly increasing, owing

to his penurious habits. He died at the age of eighty-one, leaving by

will L240,000 to the hospital which bears his name. His body lay in

state at Mercers' Chapel, and was interred in the asylum he raised,

where, ten years after his death, a statue was erected to his memory.

[Illustration: THE CLEARING HOUSE.]

Sir John Barnard, a great opponent of stockbrokers, proposed, in 1737,

to reduce the interest on the National Debt from four to three per

cent., the public being at liberty to receive their principal in full if

they preferred. This anticipation of a modern financial change was not

adopted. At this period, L10,000,000 were held by foreigners in British

funds. In 1750, the reduction from four to three per cent. interest on

the funded debt was effected, and though much clamour followed, no

reasonable ground for complaint was alleged, as the measure was very

cautiously carried out. Sir John Barnard, the Peel of a bygone age, was

commonly denominated the "great commoner." Of the stock-jobbers he

always spoke with supreme contempt; in return, they hated him most

cordially. On the money market it was not unusual to hear the merchants

inquire, "What does Sir John say to this? What is Sir John's opinion?"

He refused the post of Chancellor of the Exchequer in 1746, and from the

moment his statue was set up in Gresham's Exchange he would never enter

the building, but carried on his monetary affairs outside. The Barnard

blood still warms the veins of some of our wealthiest commercial

magnates, since his son married the daughter of a capitalist, known in

the City as "the great banker, Sir John Hankey."

Sampson Gideon, the famous Jew broker, died in 1762. Some of his shrewd

sayings are preserved. Take a specimen: "Never grant a life annuity to

an old woman; they wither, but they never die." If the proposed

annuitant coughed, Gideon called out, "Ay, ay, you may cough, but it

shan't save you six months' purchase!" In one of his dealings with Snow,

a banker alluded to by Dean Swift, Snow lent Gideon L20,000. The

"Forty-five" followed, and the banker forwarded a whining epistle to him

speaking of stoppage, bankruptcy, and concluding the letter with a

passionate request for his money. Gideon procured 21,000 bank-notes,

rolled them round a phial of hartshorn, and thus mockingly repaid the

loan. Gideon's fortune was made by the advance of the rebels towards

London. Stocks fell awfully, but hastening to "Jonathan's," he bought

all in the market, spending all his cash, and pledging his name for

more. The Pretender retreated, and the sagacious Hebrew became a

millionaire. Mr. Gideon had a sovereign contempt for fine clothes; an

essayist of the day writes, "Neither Guy nor Gideon ever regarded

dress." He educated his children in the Christian faith; "but," said he,

"I'm too old to change." "Gideon is dead," says one of his biographers,

"worth more than the whole land of Canaan. He has left the reversion of

all his milk and honey--after his son and daughter, and their

children--to the Duke of Devonshire, without insisting on his assuming

his name, or being circumcised!" His views must have been liberal, for

he left a legacy of L2,000 to the Sons of the Clergy, and of L1,000 to

the London Hospital. He also gave L1,000 to the synagogue, on condition

of having his remains interred in the Jewish burying-place.

In 1772, the occurrence of some Scotch failures led to a Change-Alley

panic, and the downfall of Alexander Fordyce, who, for years, had been

the most thriving jobber in London. He was a hosier in Aberdeen, but

came to London to improve his fortunes. The money game was in his

favour. He was soon able to purchase a large estate. He built a church

at his private cost, and spent thousands in trying to obtain a seat in

Parliament. Marrying a lady of title, on whom he made a liberal

settlement, he bought several Scotch lairdships, endowed an hospital,

and founded several charities. But the lease of his property was short.

His speculations suddenly grew desperate; hopeless ruin ensued; and a

great number of capitalists were involved in his fall. The consternation

was extreme, nor can we wonder, since his bills, to the amount of

L4,000,000, were in circulation. He earnestly sought, but in vain, for

pecuniary aid. The Bank refused it, and when he applied for help to a

wealthy Quaker, "Friend Fordyce," was the answer, "I have known many men

ruined by _two dice_, but I will not be ruined by _Four-dice_."

In 1785, a stockbroker, named Atkinson, probably from the "North

Countree," speculated enormously, but skilfully, we must suppose, for he

realised a fortune of L500,000. His habits were eccentric. At a friend's

dinner party he abruptly turned to a lady who occupied the next chair,

saying, "If you, madam, will entrust me with L1,000 for three years, I

will employ it advantageously." The speaker was well known, and his

offer accepted; and at the end of the three years, to the very day,

Atkinson called on the lady with L10,000, to which, by his adroit

management, her deposit had increased.

In general (says "Aleph," in the _City Press_), a stock-jobber's

pursuits tend to shorten life; violent excitement, and the constant

alternation of hope and fear, wear out the brain, and soon lead to

disease or death. Yet instances of great longevity occur in this class:

John Rive, after many active years in the Alley, retired to the

Continent, and died at the age of 118.

The author of "The Bank Mirror" (circa 1795) gives a graphic description

of the Stock Exchange of that period. "The scene opens," he says, "about

twelve, with the call of the prices of stock, the shouting out of names,

the recital of news, &c., much in the following manner:--'A mail come

in--What news? what news?--Steady, steady--Consols for to-morrow--Here,

Consols!--You old Timber-toe, have you got any scrip?--Private advices

from--A wicked old peer in disguise sold--What do you do?--Here,

Consols! Consols!--Letters from--A great house has stopt--Payment of the

Five per Cents commences--Across the Rhine--The Austrians routed--The

French pursuing!--Four per Cents for the opening!--Four per Cents--Sir

Sydney Smith exchanged for--Short Annuities--Shorts! Shorts! Shorts!--A

messenger extraordinary sent to--Gibraltar fortifying against--A Spanish

fleet seen in--Reduced Annuities for to-morrow--I'm a seller of--Lame

ducks waddling--Under a cloud hanging over--The Cape of Good Hope

retaken by--Lottery tickets!--Here, tickets! tickets! tickets!--The

Archduke Charles of Austria fled into--India Stock!--Clear the way,

there, Moses!--Reduced Annuities for money!--I'm a buyer--Reduced!

Reduced! (_Rattles spring._) What a d----d noise you make there with the

rattles!--Five per Cents!--I'm a seller!--Five per Cents! Five per

Cents!--The French in full march for--The Pope on his knees--following

the direction of his native meekness into--Consols! Consols!--Smoke the

old girl in silk shoes there! Madam, do you want a broker?--Four per

Cents--The Dutch fleet skulked into--Short Annuities!--The French army

retreating!--The Austrians pursuing!--Consols! Consols! Bravo!--Who's

afraid?--Up they go! up they go!--'De Empress de Russia dead!'--You lie,

Mordecai! I'll stuff your mouth with pork, you dog!--Long Annuities!

Long Annuities! Knock that fellow's hat off, there!--He'll waddle,

to-morrow--Here, Long Annuities! Short Annuities--Longs and Shorts!--The

Prince of Conde fled!--Consols!--The French bombarding Frankfort!--Reduced

Annuities--Down they go! down they go!--You, Levi, you're a thief, and

I'm a gentleman--Step to Garraway's, and bid Isaacs come here--Bank

Stock!--Consols!--Give me thy hand, Solomon!--Didst thou not hear

the guns fire?--Noble news! great news!--Here, Consols! St. Lucia

taken!--St. Vincent taken!--French fleets blocked up! English

fleets triumphant! Bravo! Up we go! up, up, up!--Imperial Annuities!

Imperial! Imperial!--Get out of my sunshine, Moses, you d--d little

Israelite!--Consols! Consols! &c.' ... The noise of the screech-owl, the

howling of the wolf, the barking of the mastiff, the grunting of the

hog, the braying of the ass, the nocturnal wooing of the cat, the

hissing of the snake, the croaking of toads, frogs, and

grasshoppers--all these in unison could not be more hideous than the

noise which these beings make in the Stock Exchange. And as several of

them get into the Bank, the beadles are provided with rattles, which

they occasionally spring, to drown their noise and give the fair

purchaser or seller room and opportunity to transact their business; for

that part of the Rotunda to which the avenue from Bartholomew Lane leads

is often so crowded with them that people cannot enter."

About 1799, the shares of this old Stock Exchange having fallen into few

hands, they boldly attempted, instead of a sixpenny diurnal admission to

every person presenting himself at the bar, to make it a close

subscription-room of ten guineas per annum for each member, and thereby

to shut out all petty or irregular traffickers, to increase the revenues

of this their monopolised market. A violent democracy revolted at this

imposition and invasion of the rights, privileges, and immunities of a

public market for the public stock. They proposed to raise 263 shares of

L50 each, creating a fund of L13,150 wherewith to build a new,

uninfluenced, unaristocraticised, free, open market. Those shares were

never, as in the old conventicle, to condense into a few hands, for fear

of a dread aristocracy returning. Mendoza's boxing-room, the

debating-forum up Capel Court, and buildings contiguous with the

freehold site, were purchased, and the foundation-stone was laid for

this temple, to be, when completed, consecrated to free, open traffic.

In 1805 Ambrose Charles, a Bank clerk, publicly charged the Earl of

Moira, a cabinet minister, with using official intelligence to aid him

in speculating in the funds. The Premier was compelled to investigate

the charge, but no truthful evidence could be adduced, and the falsehood

of his allegations was made apparent.

Mark Sprat, a remarkable speculator, died in 1808. He came to London

with small means, but getting an introduction to the Stock Exchange, was

wonderfully successful. In 1799 he contracted for the Lottery; and in

1800 and the three following years he was foremost among those who

contracted for the loans. During Lord Melville's trial, he was asked

whether he did not act as banker for members of both houses. "I never do

business with privileged persons!" was his reply, which might have

referred to the following fact:--A broker came to Sprat in great

distress. He had acted largely for a principal who, the prices going

against him, refused to make up his losses. "Who was the scoundrel?" "A

nobleman of immense property." Sprat volunteered to go with him to his

dishonest debtor. The great man coolly answered, it was not convenient

to pay. The broker declared that unless the account was settled by a

fixed hour next day, his lordship would be posted as a defaulter. Long

before the time appointed the matter was arranged, and Sprat's friend

rescued from ruin.

The history of the money articles in the London papers is thus given by

the author of "The City." In 1809 and 1810 (says the writer), the papers

had commenced regularly to publish the prices of Consols and the other

securities then in the market, but the list was merely furnished by a

stockbroker, who was allowed, as a privilege for his services, to append

his name and address, thereby receiving the advantages of an

advertisement without having to pay for it. A further improvement was

effected by inserting small paragraphs, giving an outline of events

occurring in relation to City matters, but these occupied no

acknowledged position, and only existed as ordinary intelligence.

However, from 1810 up to 1817, considerable changes took place in the

arrangements of the several daily journals; and a new era almost

commenced in City life with the numerous companies started on the

joint-stock principle at the more advanced period, and then it was that

this department appears to have received serious attention from the

heads of the leading journals.

The description of matter comprised in City articles has not been known

in its present form more than fifty years. There seems a doubt whether

they first originated with the _Times_ or the _Herald_. Opinion is by

some parties given in favour of the last-mentioned paper. Whichever

establishment may be entitled to the praise for commencing so useful a

compendium of City news, one thing appears very certain--viz., that no

sooner was it adopted by the one paper, than the other followed closely

in the line chalked out. The regular City article appears only to have

had existence since 1824-25, when the first effect of that

over-speculating period was felt in the insolvency of public companies,

and the breakage of banks. Contributions of this description had been

made and published, as already noticed, in separate paragraphs

throughout the papers as early as 1811 and 1812; but these took no very

prominent position till the more important period of the close of the

war, and the declaration of peace with Europe.

In 1811, the case of Benjamin Walsh, M.P., a member of the Stock

Exchange, occasioned a prodigious sensation. Sir Thomas Plomer employed

him as his broker, and, buying an estate, found it necessary to sell

stock. Walsh advised him not to sell directly, as the funds were rising;

the deeds were not prepared, and the advice was accepted. Soon after,

Walsh said the time to sell was come, for the funds would quickly fall.

The money being realised, Walsh recommended the purchase of exchequer

bills as a good investment. Till the cash was wanted, Sir Thomas gave a

cheque for L22,000 to Walsh, who undertook to lodge the notes at

Gosling's. In the evening he brought an acknowledgment for L6,000,

promising to make up the amount next day. Sir Thomas called at his

bankers, and found that a cheque for L16,000 had been sent, but too late

for presentation, and in the morning the cheque was refused. In fact,

Walsh had disposed of the whole; giving L1,000 to his broker, purchasing

L11,000 of American stock, and buying L5,000 worth of Portuguese

doubloons. He was tried and declared guilty; but certain legal

difficulties were interposed; the judges gave a favourable decision; he

was released from Newgate, and formally expelled from the House of

Commons. Such crimes seem almost incredible, for such culprits can have

no chance of escape; as, even when the verdict of a jury is favourable,

their character and position must be absolutely and hopelessly lost.

In these comparatively steady-going times, the funds often remain for

months with little or no variation; but during the last years of the

French war, a difference of eight or even ten per cent. might happen in

an hour, and scripholders might realise eighteen or twenty per cent. by

the change in the loans they so eagerly sought. From what a fearful load

of ever-increasing expenditure the nation was relieved by the peace

resulting from the battle of Waterloo, may be judged from the fact that

the decrease of Government charges was at once declared to exceed

L2,000,000 per month.

One of the most extraordinary Stock Exchange conspiracies ever devised

was that carried out by De Berenger and Cochrane Johnstone in 1814. It

was a time when Bonaparte's military operations against the allies had

depressed the funds, and great national anxiety prevailed. The

conspiracy was dramatically carried out. On the 21st of February, 1824,

about one a.m., a violent knocking was heard at the door of the "Ship

Inn," then the principal hotel of Dover. On the door being opened, a

person in richly embroidered scarlet uniform, wet with spray, announced

himself as Lieutenant-Colonel De Bourg, aide-de-camp of Lord Cathcart.

He had a star and silver medals on his breast, and wore a dark fur

travelling cap, banded with gold. He said he had been brought over by a

French vessel from Calais, the master of which, afraid of touching at

Dover, had landed him about two miles off, along the coast. He was the

bearer of important news--the allies had gained a great victory and had

entered Paris. Bonaparte had been overtaken by a detachment of Sachen's

Cossacks, who had slain and cut him into a thousand pieces. General

Platoff had saved Paris from being reduced to ashes. The white cockade

was worn everywhere, and an immediate peace was now certain. He

immediately ordered out a post-chaise and four, but first wrote the news

to Admiral Foley, the port-admiral at Deal. The letter reached the

admiral about four a.m., but the morning proving foggy, the telegraph

would not work. Off dashed De Bourg (really De Berenger, an adventurer,

afterwards a livery-stable keeper), throwing napoleons to the post-boys

every time he changed horses. At Bexley Heath, finding the telegraph

could not have worked, he moderated his pace and spread the news of the

Cossacks fighting for Napoleon's body. At the Marsh Gate, Lambeth, he

entered a hackney coach, telling the post-boys to spread the news on

their return. By a little after ten, the rumours reached the Stock

Exchange, and the funds rose; but on its being found that the Lord Mayor

had had no intelligence, they soon went down again.

In the meantime other artful confederates were at work. The same day,

about an hour before daylight, two men, dressed as foreigners, landed

from a six-oar galley, and called on a gentleman of Northfleet, and

handed him a letter from an old friend, begging him to take the bearers

to London, as they had great public news to communicate; they were

accordingly taken. About twelve or one the same afternoon, three persons

(two of whom were dressed as French officers) drove slowly over London

Bridge in a post-chaise, the horses of which were bedecked with laurel.

The officers scattered billets to the crowd, announcing the death of

Napoleon and the fall of Paris. They then paraded through Cheapside and

Fleet Street, passed over Blackfriars Bridge, drove rapidly to the Marsh

Gate, Lambeth, got out, changed their cocked hats for round ones, and

disappeared as De Bourg had done.

The funds once more rose, and long bargains were made; but still some

doubt was felt by the less sanguine, as the ministers as yet denied all

knowledge of the news. Hour after hour passed by, and the certainty of

the falsity of the news gradually developed itself. "To these scenes of

joy," says a witness, "and of greedy expectations of gain, succeeded, in

a few hours, disappointment and shame at having been gulled, the

clenching of fists, the grinding of teeth, the tearing of hair, all the

outward and visible signs of those inward commotions of disappointed

avarice in some, consciousness of ruin in others, and in all boiling

revenge." A committee was appointed by the Stock Exchange to track out

the conspiracy, as on the two days before Consols and Omnium, to the

amount of L826,000, had been purchased by persons implicated. Because

one of the gang had for a blind called on the celebrated Lord Cochrane,

and because a relation of his engaged in the affair had purchased

Consols for him, that he might unconsciously benefit by the fraud, the

Tories, eager to destroy a bitter political enemy, concentrated all

their rage on as high-minded, pure, and chivalrous a man as ever trod a

frigate's deck. He was tried June 21, 1817, at the Court of Queen's

Bench, fined L1,000, and sentenced ignominiously to stand one hour in

the pillory. This latter part of his sentence the Government was,

however, afraid to carry out, as Sir Francis Burdett had declared that

if it was done, he would stand beside his friend on the scaffold of

shame. To crown all, Cochrane's political enemies had him stripped of

his knighthood, and the escutcheon of his order disgracefully kicked

down the steps of the chapel in Westminster Abbey. For some years this

true successor of Nelson remained a branded exile, devoting his courage

to the cause of universal liberty, lost to the country which he loved

so much. In his old age tardy justice restored to him his unsoiled

coronet, and finally awarded him a grave among her heroes.

The ticket pocketing of 1821 is thus described by the author of "An

Expose of the Mysteries of the Stock Exchange:"--"Of all the tricks," he

says, "practised against Goldschmidt, the ticket pocketing scheme was,

perhaps, the most iniquitous: it was to prevent the buying in on a

settling day the balance of the account, and to defeat the consequent

rise, thereby making the real bear a fictitious bull account. To give

the reader a conception of this, and of the practices as well as the

interior of the Stock Exchange, the following attempted delineation is

submitted:--The doors open before ten, and at the minute of ten the

spirit-stirring rattle grates to action. Consols are, suppose, 69 to

69-1/8--that is, buyers at the lower and sellers at the higher price.

Trifling manoeuvres and puffing up till twelve, as neither party wish

the Government broker to buy under the highest price; the sinking-fund

purchaser being the point of diurnal altitude, as the period before a

loan is the annually depressed point of price, when the Stock Exchange

have the orbit of these revolutions under their own control.

"At twelve the broker mounts the rostrum and opens: 'Gentlemen, I am a

buyer of L60,000 Consols for Government, at 69.' 'At 1/8th, sir,' the

jobbers resound; 'ten thousand of me--five of me--two of me,' holding up

as many fingers. Nathan, Goldschmidt's agent, says, 'You may have them

all of me at your own bidding, 69.' In ten minutes this commission is

earned from the public, and this state sinking-fund joint stock jobbed.

Nathan is hustled, his hat and wig thrown upon the commissioner's

sounding-board, and he must stand bareheaded until the porter can bring

a ladder to get it down. Out squalls a ticket-carrier, 'Done at 7/8;'

again, 'At 3/4, all a-going;' and the contractors must go, too; they

have served the commissioners at 69, when the market was full

one-eighth. All must come to market before next omnium payment; they

cannot keep it up (yet this operation might have suited the positions of

the market). Nathan cries out, 'Where done at 3/4ths?' 'Here--there,

there, there!' Mr. Doubleface, going out at the door, meets Mr. Ambush,

a brother bear, with a wink, 'Sir, they are 3/4ths, I believe, sellers;

you may have L2,000 thereat, and L10,000 at 5/8ths.' This is called

fiddling: it is allowable to jobbers thus to bring the turn to 1/16th,

or a 32nd, but not to brokers, as thereby the public would not be

fleeced 1/8th, to the house benefit. 'Sir, I would not take them at

1/4th,' replies Mr. Ambush. 'Offered at 3/4ths and 5/8ths,' bawls out an

urchin scout, holding up his face to the ceiling, that by the re-echo

his spot may not be discovered."

The system of business at the Stock Exchange is thus described by an

accomplished writer on the subject: "Bargains are made in the presence

of a third person. The terms are simply entered in a pocket-book, but

are checked the next day; and the jobber's clerk (also a member of the

house) pays or receives the money, and sees that the securities are

correct. There are but three or four dealers in Exchequer bills. Most

members of the Stock Exchange keep their money in convertible

securities, so that it can be changed from hand to hand almost at a

moment's notice. The brokers execute the orders of bankers, merchants,

and private individuals; and the jobbers are the persons with whom they

deal. When the broker appears in the market, he is at once surrounded by

eager jobbers. One of the cries of the Stock Exchange is, 'Borrow money?

borrow money?'--a singular cry to general apprehension, but it of course

implies that the credit of the borrower must be first-rate, or his

security of the most satisfactory nature, and that it is not the

principal who goes into the market, but only the principal's broker.

'Have you money to lend to-day?' is a startling question often asked

with perfect _nonchalance_ in the Stock Exchange. If the answer is

'Yes,' the borrower says, 'I want L10,000 or L20,000.'--'At what

security?' is the vital question that soon follows.

"Another mode of doing business is to conceal the object of the borrower

or lender, who asks, 'What are Exchequer?' The answer may be, 'Forty and

forty-two.' That is, the party addressed will buy L1,000 at 40

shillings, and sell L1,000 at 42 shillings. The jobbers cluster round

the broker, who perhaps says, 'I must have a price in L5,000.' If it

suits them, they will say, 'Five with me,' 'Five with me,' 'Five with

me,' making fifteen; or they will say, 'Ten with me;' and it is the

broker's business to get these parties pledged to buy of him at 40, or

to sell to him at 42, they not knowing whether he is a buyer or a

seller. The broker then declares his purpose, saying, for example,

'Gentlemen, I sell to you L20,000 at 40;' and the sum is then

apportioned among them. If the money were wanted only for a month, and

the Exchequer market remained the same during the time, the buyer would

have to give 42 in the market for what he sold at 40, being the

difference between the buying and the selling price, besides which he

would have to pay the broker 1s. per cent. commission on the sale, and

1s. per cent. on the purchase, again on the bills, which would make

altogether 4s. per cent. If the object of the broker be to buy Consols,

the jobber offers to buy his L10,000 at 96, or to sell him that amount

at 96-1/8, without being at all aware which he is engaging himself to

do. The same person may not know on any particular day whether he will

be a borrower or a lender. If he has sold stock, and has not

re-purchased about one or two o'clock in the day, he would be a lender

of money; but if he has bought stock, and not sold, he would be a

borrower. Immense sums are lent on condition of being recalled on the

short notice of a few hours."

The uninitiated wonder that any man should borrow L10,000 or L20,000 for

a day, or at most a fortnight, when it is liable to be called for at the

shortest notice. The directors of a railway company, instead of locking

up their money, send the L12,000 or L14,000 a week to a broker, to be

lent on proper securities. Persons who pay large duties to Government at

fixed periods, lend the sums for a week or two. A person intending to

lay out his capital in mortgage or real property, lends out the sum till

he meets with a suitable offer. The great bankers lend their surplus

cash on the Stock Exchange. A jobber, at the close of the day, will lend

his money at 1 per cent., rather than not employ it at all. The

extraordinary fluctuations in the rate of interest even in a single day

are a great temptation to the money-lender to resort to the Stock

Exchange. "Instances have occurred," says our authority, "when in the

morning everybody has been anxious to lend money at 4 per cent., when

about two o'clock money has become so scarce that it could with

difficulty be borrowed at 10 per cent. If the price of Consols be low,

persons who are desirous of raising money will give a high rate of

interest rather than sell stock."

The famous Pop-gun Plot was generally supposed to have been a Stock

Exchange trick. A writer on stockbroking says: "The Pop-gun Plot, in

Palace Yard, on a memorable occasion of the King going to the Parliament

House, was never understood or traced home. It is said to have

originated in a Stock Exchange hoax. 'Popgun John' was at the time a low

republican in the Stock Exchange, and had a house in or near Palace

Yard, from which a missile had been projected. He subsequently grew

rich."

[Illustration: THE PRESENT STOCK EXCHANGE.]

The journals of that day described the hot pursuit by the myrmidons

being cooled by a well-got-up story that the fugitive suspected had been

unfortunately drowned; and in proof, a hat picked up by a waterman at

the Nore was brought wet to the police office, and proved to have

belonged to the person pursued. The plotter disappeared after this

"drowning" for some months, while the hush-money and sinister manoeuvres

were baffling the pursuers. Afterwards, the affair dying away, he

reappeared, resuscitated, in the Stock Exchange, making very little

secret of this extraordinary affair, and would relate it in ordinary

conversation on the Stock Exchange benches, as a philosophical

experiment, not intended to endanger the king's life, but certainly

planned to frighten the public, so as to effect a fall, and realise a

profitable bear account; if sufficient to trip up the contractors, the

better.

While the dupes of the Cato Street conspiracy were dangling before the

"debtor's door," the surviving adept of the former plot, from his villa

not ten miles from London, was mounting his carriage to drive to the

Stock Exchange, to operate upon the effect this example might produce in

the public mind, and, consequently, realising his now large portion of

funded property.

"If there are any members now of that standing in the Stock Exchange,

they must remember how artlessly the tale of this philosophical

experiment used to be told by the contriver of it in a year or two

afterwards, in reliance upon Stock Exchange men's honour and

confidence.

In the year 1798, Nathan, the third son of Meyer Anselm Rothschild, of

Frankfort, intimated to his father that he would go to England, and

there commence business. The father knew the intrepidity of Nathan, and

had great confidence in his financial skill: he interposed, therefore,

no difficulties. The plan was proposed on Tuesday, and on Thursday it

was put into execution.

Nathan was entrusted with L20,000, and though perfectly ignorant of the

English language, he commenced a most gigantic career, so that in a

brief period the above sum increased to the amount of L60,000.

Manchester was his starting-point. He took a comprehensive survey of its

products, and observed that by proper management a treble harvest might

be reaped from them. He secured the three profitable trades in his

grasp--viz., the raw material, the dyeing, and the manufacturing--and

was consequently able to sell goods cheaper than any one else. His

profits were immense, and Manchester soon became too little for his

speculative mind. Nevertheless, he would not have left it were it not a

private pique against one of his co-religionists, which originated by

the dishonouring of a bill which was made payable to him, disgusted him

with the Manchester community. In 1800, therefore, he quitted Manchester

for the metropolis. With giant strides he progressed in his prosperity.

The confused and insecure state of the Continent added to his fortune,

and contributed to his fame.

The Prince of Hesse Cassel, in flying from the approach of the

republican armies, desired, as he passed through Frankfort, to store a

vast amount of wealth, in such a manner as might leave him a chance of

recovery after the storm had passed by. He sought out Meyer Anselm

Rothschild, and confided all his worldly possessions to the keeping of

the Hebrew banker. Meyer Anselm, either from fear of loss or hope of

gain, sent the money to his son Nathan, settled in London, and the

latter thus alluded to this circumstance: "The Prince of Hesse Cassel

gave my father his money; there was no time to be lost; he sent it to

me. I had L600,000 arrive by post unexpectedly; and I put it to so good

use, that the prince made me a present of all his wine and linen."

"When the late Mr. Rothschild was alive, if business," says the author

of "The City," "ever became flat and unprofitable in the Stock Exchange,

the brokers and jobbers generally complained, and threw the blame upon

this leviathan of the money market. Whatever was wrong, was always

alleged to be the effects of Mr. Rothschild's operations, and, according

to the views of these parties, he was either bolstering up, or

unnecessarily depressing prices for his own object. An anecdote is

related of this great speculator, that hearing on one occasion that a

broker had given very strong expression to his feelings in the open

market on this subject, dealing out the most deadly anathemas against

the Jews, and consigning them to the most horrible torments, he sent the

broker, through the medium of another party, an order to sell L600,000

Consols, saying, 'As he always so abuses me, they will never suspect he

is _bearing_ the market on my account.' Mr. Rothschild employed several

brokers to do his business, and hence there was no ascertaining what in

reality was the tendency of his operations. While perchance one broker

was buying a certain quantity of stock on the order of his principal in

the market, another at the same moment would be instructed to sell; so

that it was only in the breast of the principal to know the probable

result. It is said that Mrs. Rothschild tried her hand in speculating,

and endeavoured by all her influence to get at the secret of her

husband's dealings. She, however, failed, and was therefore not very

successful in her ventures. Long before Mr. Rothschild's death, it was

prophesied by many of the brokers that, when the event occurred, the

public would be less alarmed at the influence of the firm, and come

forward more boldly to engage in stock business. They have,

notwithstanding, been very much mistaken."

The chronicler of the "Stock Exchange" says: "One cause of Rothschild's

success, was the secrecy with which he shrouded all his transactions,

and the tortuous policy with which he misled those the most who watched

him the keenest. If he possessed news calculated to make the funds rise,

he would commission the broker who acted on his behalf to sell half a

million. The shoal of men who usually follow the movements of others,

sold with him. The news soon passed through Capel Court that Rothschild

was bearing the market, and the funds fell. Men looked doubtingly at one

another; a general panic spread; bad news was looked for; and these

united agencies sunk the price two or three per cent. This was the

result expected; other brokers, not usually employed by him, bought all

they could at the reduced rate. By the time this was accomplished the

good news had arrived; the pressure ceased, the funds arose instantly,

and Mr. Rothschild reaped his reward."

It sometimes happened that notwithstanding Rothschild's profound

secrecy, he was overcome by stratagem. The following circumstance, which

was related to Mr. Margoliouth by a person who knew Rothschild well,

will illustrate the above statement. When the Hebrew financier lived at

Stamford Hill, there resided opposite to him another very wealthy dealer

in the Stock Exchange, Lucas by name. The latter returning home one

night at a late hour from a convivial party, observed a carriage and

four standing before Rothschild's gate, upon which he ordered his own

carriage out of the way, and commanded his coachman to await in

readiness his return. Lucas went stealthily and watched, unobserved, the

movements at Rothschild's gate. He did not lie long in ambush before he

heard some one leaving the Hebrew millionaire's mansion, and going

towards the carriage. He saw Rothschild, accompanied by two muffled

figures, step into the carriage, and heard the word of command, "To the

City." He followed Rothschild's carriage very closely, but when he

reached the top of the street in which Rothschild's office was situated,

Lucas ordered his carriage to stop, from which he stepped out, and

proceeded, reeling to and fro through the street, feigning to be

mortally drunk. He made his way in the same mood as far as Rothschild's

office, and _sans ceremonie_ opened the door, to the great consternation

and terror of the housekeeper, uttering sundry ejaculations in the

broken accents of Bacchus' votaries. Heedless of the affrighted

housekeeper's remonstrances, he opened Rothschild's private office, in

the same staggering attitude, and fell down flat on the floor.

Rothschild and his friends became very much alarmed. Efforts were made

to restore and remove the would-be drunkard, but Lucas was too good an

actor, and was therefore in such a fit as to be unable to be moved

hither or thither. "Should a physician be sent for?" asked Rothschild.

But the housekeeper threw some cold water into Lucas's face, and the

patient began to breathe a little more naturally, and fell into a sound

snoring sleep. He was covered over, and Rothschild and the strangers

proceeded unsuspectingly to business. The strangers brought the good

intelligence that the affairs in Spain were all right, respecting which

the members of the Exchange were, for a few days previous, very

apprehensive, and the funds were therefore in a rapidly sinking

condition. The good news could not, however, in the common course of

despatch, be publicly known for another day. Rothschild therefore

planned to order his brokers to buy up, cautiously, all the stock that

should be in the market by twelve o'clock the following day. He sent for

his principal broker thus early, in order to entrust him with the

important instruction.

The broker was rather tardier than Rothschild's patience could brook; he

therefore determined to go himself. As soon as Rothschild was gone,

Lucas began to recover, and by degrees was able to get up, though

distracted, as he said, "with a violent headache," and insisted, in

spite of the housekeeper's expostulations, upon going home. But Lucas

went to his broker, and instructed him to buy up all the stock he could

get by ten o'clock the following morning. About eleven o'clock Lucas met

Rothschild, and inquired satirically how he, Rothschild, was off for

stock. Lucas won the day, and Rothschild is said never to have forgiven

"the base, dishonest, and nefarious stratagem."

Yet, with all his hoardings, says Mr. Margoliouth, Rothschild was by no

means a happy man. Dangers and assassinations seemed to haunt his

imagination by day and by night, and not without grounds. Many a time,

as he himself said, just before he sat down to dinner, a note would be

put into his hand, running thus:--"If you do not send me immediately the

sum of five hundred pounds, I will blow your brains out." He affected to

despise such threats; they, nevertheless, exercised a direful effect

upon the millionaire. He loaded his pistols every night before he went

to bed, and put them beside him. He did not think himself more secure in

his country house than he did in his bed. One day, while busily engaged

in his golden occupation, two foreign gentlemen were announced as

desirous to see Baron Rothschild _in propria persona_. The strangers had

not the foresight to have the letters of introduction in readiness. They

stood, therefore, before the Baron in the ludicrous attitude of having

their eyes fixed upon the Hebrew Croesus, and with their hands rummaging

in large European coat-pockets. The fervid and excited imagination of

the Baron conjured up a multitudinous array of conspiracies. Fancy

eclipsed his reason, and, in a fit of excitement, he seized a huge

ledger, which he aimed and hurled at the mustachioed strangers, calling

out, at the same time, for additional physical force. The astonished

Italians, however, were not long, after that, in finding the important

documents they looked for, which explained all. The Baron begged the

strangers' pardon for the unintentional insult, and was heard to

articulate to himself, "Poor unhappy me! a victim to nervousness and

fancy's terrors! and all because of my money!"

Rothschild's mode of doing business when engaging in large transactions

(says Mr. Grant) was this. Supposing he possessed exclusively, which he

often did, a day or two before it could be generally known, intelligence

of some event, which had occurred in any part of the Continent,

sufficiently important to cause a rise in the French funds, and through

them on the English funds, he would empower the brokers he usually

employed to sell out stock, say to the amount of L500,000. The news

spread in a moment that Rothschild was selling out, and a general alarm

followed. Every one apprehended that he had received intelligence from

some foreign part of some important event which would produce a fall in

prices. As might, under such circumstances, be expected, all became

sellers at once. This, of necessity, caused the funds, to use Stock

Exchange phraseology, "to tumble down at a fearful rate." Next day, when

they had fallen, perhaps, one or two per cent., he would make purchases,

say to the amount of L1,500,000, taking care, however, to employ a

number of brokers whom he was not in the habit of employing, and

commissioning each to purchase to a certain extent, and giving all of

them strict orders to preserve secrecy in the matter. Each of the

persons so employed was, by this means, ignorant of the commission given

to the others. Had it been known the purchases were made by him, there

would have been as great and sudden a rise in the prices as there had

been in the fall, so that he could not purchase to the intended extent

on such advantageous terms. On the third day, perhaps, the intelligence

which had been expected by the jobbers to be unfavourable arrived, and,

instead of being so, turned out to be highly favourable. Prices

instantaneously rise again, and possibly they may get one and a-half or

even two per cent. higher than they were when he sold out his L500,000.

He now sells out, at the advanced price, the entire L1,500,000 he had

purchased at the reduced prices. The gains by such extensive

transactions, when so skilfully managed, will be at once seen to be

enormous. By the supposed transaction, assuming the rise to be two per

cent., the gain would be L35,000. But this is not the greatest gain

which the late leviathian of modern capitalists made by such

transactions. He, on more than one occasion, made upwards of L100,000 on

one account.

But though no person during the last twelve or fifteen years of

Rothschild's life (says Grant) was ever able, for any length of time, to

compete with him in the money market, he on several occasions was, in

single transactions, outwitted by the superior tactics of others. The

gentleman to whom I allude was then and is now the head of one of the

largest private banking establishments in town. Abraham Montefiore,

Rothschild's brother-in-law, was the principal broker to the great

capitalist, and in that capacity was commissioned by the latter to

negotiate with Mr. ---- a loan of L1,500,000. The security offered by

Rothschild was a proportionate amount of stock in Consols, which were at

that time 84. This stock was, of course, to be transferred to the name

of the party advancing the money, Rothschild's object being to raise the

price of Consols by carrying so large a quantity out of the market. The

money was lent, and the conditions of the loan were these--that the

interest on the sum advanced should be at the rate of 4-1/2 per cent.,

and that if the price of Consols should chance to go down to 74, Mr.

---- should have the right of claiming the stock at 70. The Jew, no

doubt, laughed at what he conceived his own commercial dexterity in the

transaction; but, ere long, he had abundant reason to laugh on the wrong

side of his mouth; for, no sooner was the stock poured into the hand of

the banker, than the latter sold it, along with an immensely large sum

which had been previously standing in his name, amounting altogether to

little short of L3,000,000. But even this was not all. Mr. ---- also

held powers of attorney from several of the leading Scotch and English

banks, as well as from various private individuals, who had large

property in the funds, to sell stock on their account. On these powers

of attorney he acted, and at the same time advised his friends to follow

his example. They at once did so, and the consequence was that the

aggregate amount of stock sold by himself and his friends conjointly

exceeded L10,000,000. So unusual an extent of sales, all effected in the

shortest possible time, necessarily drove down the prices. In an

incredibly short time they fell to 74; immediately on which, Mr. ----

claimed of Rothschild his stock at 70. The Jew could not refuse: it was

in the bond. This climax being reached, the banker bought in again all

the stock he had previously sold out, and advised his friends to

re-purchase also. They did so; and the result was, that in a few weeks

Consols reached 84 again, their original price, and from that to 86.

Rothschild's losses were very great by this transaction; but they were

by no means equal to the banker's gains, which could not have been less

than L300,000 or L400,000.

The following grotesque sketch of the great Rothschild is from the pen

of a clever anonymous writer:--"The thing before you," says the author

quoted, "stands cold, motionless, and apparently speculationless, as the

pillar of salt into which the avaricious spouse of the patriarch was

turned; and while you start with wonder at what it can be or mean, you

pursue the association, and think upon the fire and brimstone that were

rained down. It is a human being of no very Apollo-like form or face:

short, squat, with its shoulders drawn up to its ears, and its hands

delved into its breeches'-pockets. The hue of its face is a mixture of

brick-dust and saffron; and the texture seems that of the skin of a dead

frog. There is a rigidity and tension in the features, too, which would

make you fancy, if you did not see that that were not the fact, that

some one from behind was pinching it with a pair of hot tongs, and that

it were either afraid or ashamed to tell. Eyes are usually denominated

the windows of the soul; but here you would conclude that the windows

are false ones, or that there is no soul to look out at them. There

comes not one pencil of light from the interior, neither is there one

scintillation of that which comes from without reflected in any

direction. The whole puts you in mind of 'a skin to let;' and you wonder

why it stands upright without at least something within. By-and-by

another figure comes up to it. It then steps two paces aside, and the

most inquisitive glance that ever you saw, and a glance more inquisitive

than you would ever have thought of, is drawn out of the erewhile fixed

and leaden eye, as if one were drawing a sword from a scabbard. The

visiting figure, which has the appearance of coming by accident, and not

by design, stops but a second or two, in the course of which looks are

exchanged which, though you cannot translate, you feel must be of most

important meaning. After these, the eyes are sheathed up again, and the

figure resumes its stony posture. During the morning numbers of visitors

come, all of whom meet with a similar reception, and vanish in a similar

manner; and last of all the figure itself vanishes, leaving you utterly

at a loss as to what can be its nature and functions."

Abraham Goldsmid, a liberal and honourable man, who almost rivalled

Rothschild as a speculator, was ruined at last by a conspiracy.

Goldsmid, in conjunction with a banking establishment, had taken a large

Government loan. The leaguers contrived to produce from the collectors

and receivers of the revenue so large an amount of floating

securities--Exchequer Bills and India Bonds--that the omnium fell to 18

discount. The result was Goldsmid's failure, and eventually his suicide.

The conspirators purchased omnium when at its greatest discount, and on

the following day it went up to 3 premium, being then a profit of about

L2,000,000.

Goldsmid seems to have been a kind-hearted man, not so wholly absorbed

in speculation and self as some of the more greedy and vulgar members of

the Stock Exchange. One day Mr. Goldsmid observed his favourite waiter

at the City of London Tavern very melancholy and abstracted. On being

pressed, John confessed that he had just been arrested for a debt of

L55, and that he was thinking over the misery of his wife and five

children. Goldsmid instantly drew out his chequebook, and wrote a cheque

for L100, the sight of which gladdened poor John's heart and brought

tears into his eyes. On one occasion, after a carriage accident in

Somersetshire, Goldsmid was carried to the house of a poor curate, and

there attended for a fortnight with unremitting kindness. Six weeks

after the millionaire's departure a letter came from Goldsmid to the

curate, saying that, having contracted for a large Government loan, he

(the writer) had put down the curate's name for L20,000 omnium. The poor

curate, supposing some great outlay was expected from him for this share

in the loan, wrote back to say that he had not L20,000, or even L20, in

the world. By the next post came a letter enclosing the curate L1,500,

the profit on selling out the L20,000 omnium, the premium having risen

since the curate's name had been put down.

The vicissitudes of the Stock Exchange are like those of the

gambling-table. A story is related specially illustrative of the rapid

fortunes made in the old war-time, when the funds ran up and down every

time Napoleon mounted his horse. Mr. F., afterwards proprietor of one of

the largest estates in the county of Middlesex, had lost a fortune on

the Stock Exchange, and had, in due course, been ruthlessly gibbeted on

the cruel black board. In a frenzy, as he passed London Bridge,

contemplating suicide, F. threw the last shilling he had in the world

over the parapet into the water. Just at that moment some one seized him

by the hand. It was a French ensign. He was full of a great battle that

had been fought (Waterloo), which had just annihilated Bonaparte, and

would restore the Bourbons. The French ambassador had told him only an

hour before. A gleam of hope, turning the black board white, arose

before the miserable man. He hurried off to a firm on the Stock

Exchange, and offered most important news on condition that he should

receive half of whatever profits they might realise by the operation. He

told them of Waterloo. They rushed into the market, and purchased

Consols to a large amount. In the meantime F., sharpened by misfortune,

instantly proceeded to another firm, and made a second offer, which was

also accepted. There were two partners, and the keenest of them

whispered the other not to let F. out of his sight, while he sent

brokers to purchase Consols. He might tell some one else. Lunch was then

brought in, and the key turned on them. Presently the partner returned,

red and seething, from the Stock Exchange. Most unaccountably Consols

had gone up 3 per cent., and he was afraid to purchase. But F. urged the

importance of the victory, and declared the funds would soon rise 10 or

12 per cent. The partners, persuaded, made immense purchases. The day

the news of Waterloo arrived the funds rose 15 per cent., the greatest

rise they were ever known to experience; and F.'s share of the profits

from the two houses in one day exceeded L100,000. He returned next day

to the Stock Exchange, and soon, amassed a large fortune; he then wisely

purchased an estate, and left the funds alone for ever.

Some terrible failures occurred in the Stock Exchange during the Spanish

panic of 1835. A few facts connected with this disastrous time will

serve excellently to illustrate the effects of such reactions among the

speculators in stocks. A decline of 20 or 30 per cent. in the Peninsular

securities within a week or ten days ruined many of the members. They,

like card houses in a puff of wind, brought down others; so that in one

short month the greater part of the Stock Exchange had fallen into

difficulties. The failure of principals out of doors, who had large

differences to pay, caused much of this trouble to the brokers. Men with

limited means had plunged into what they considered a certain

speculation, and when pay-day arrived and the account was against them,

they were obliged to confess their inability to scrape together the

required funds. For instance, at the time Zumalacarregui was expected to

die, a principal, a person who could not command more than L1,000,

"stood," as the Stock Exchange phrase runs, to make a "pot of money" by

the event. He speculated heavily, and had the Spanish partisan general

good-naturedly died during the account, the commercial gambler would

have certainly netted nearly L40,000. The general, however, obstinately

delayed his death till the next week, and by that time the speculator

was ruined, and all he had sold. Many of the dishonest speculators whose

names figured on the black board in 1835 had been "bulls" of Spanish

stock. When the market gave way and prices fell, the principals

attempted to put off the evil day, says a writer of the period, by

"carrying over instead of closing their accounts." The weather, however,

grew only the more stormy, and at last, when payment could no longer be

evaded, they coolly turned round, and with brazen faces refused,

although some of them were able to adjust the balances which their

luckless brokers exhibited against them. Now a broker is obliged either

to make good his principal's losses from his own pocket, or be declared

a defaulter and expelled the Stock Exchange. This rule often presses

heavily, says an authority on the subject, on honest but not

over-opulent brokers, who transact business for other persons, and

become liable if they turn out either insolvent or rogues. Brokers are

in most cases careful in the choice of principals if they speculate

largely, and often adopt the prudent and very justifiable plan of having

a certain amount of stock deposited in their "strong box" as security

before any important business is undertaken. Every principal who dabbles

in rickety stock without a certain reserve as a security is set down by

most men as little better than a swindler.

During the rumours of war which prevailed in October, 1840, shortly

before the fall of the Thiers administration in France, the fluctuations

in Consols were as much as 4 per cent. The result was great ruin to

speculators. The speculators for the rise--the "bulls," in fact--of

L400,000 Consols sustained a loss of from L10,000 to L15,000, for which

more than one broker found it necessary, for sustaining his credit, to

pay.

The railway mania produced many changes in the Stock Exchange. The share

market, which previously had been occupied by only four or five brokers

and a number of small jobbers, now became a focus of vast business.

Certain brokers, it is said, made L3,000 or L4,000 a day by their

business. One fortunate man outside the house, who held largely of

Churnett Valley scrip before the sanction of the Board of Trade was

procured, sold at the best price directly the announcement was made, and

netted by that _coup_ L27,000. The "Alley men" wrote letters for shares,

and when the allotments were obtained made some 10s. on each share. Some

of these "dabblers" are known to have made only fifty farthings of fifty

shares of a railway now the first in the kingdom. The sellers of letters

used to meet in the Royal Exchange before business hours, till the

beadle had at last to drive them away to make room for the merchants.

There is a story told of an "Alley man" during the mania contriving to

sell some rotten shares by bowing to Sir Isaac Goldsmid in the presence

of his victim. Sir Isaac returned the bow, and the victim at once

believed in the respectability of the gay deceiver.

With the single exception of Mr. David Ricardo, the celebrated political

economist, says Mr. Grant, there are few names of any literary

distinction connected with the Stock Exchange. Mr. Ricardo is said to

have amassed his immense fortune by a scrupulous attention to his own

golden rules:--

"Never refuse an option when you can get it;

Cut short your losses;

Let your profits run on."

By the second rule, which, like the rest, is strictly technical, Mr.

Ricardo meant that purchasers of stock ought to re-sell immediately

prices fell. By the third he meant that when a person held stock and

prices were rising, he ought not to sell until prices had reached their

highest, and were beginning to fall.

[Illustration: ON CHANGE. (_From an Old Print, about 1800. The Figures

by Rowlandson; Architecture by Nash._)]

Gentlemen of the Stock Exchange are rough with intruders. A few years

since, says a writer in the _City Press_, an excellent clergyman of my

acquaintance, who had not quite mastered the Christian philosophy of

turning the right cheek to those who smote the left, had business in the

City, and being anxious to see his broker, strayed into the Stock

Exchange, in utter ignorance of the great liberty he was committing.

Instantly known as an interloper, he was surrounded and hustled by some

dozen of the members. "What did he want?" "How dared he to intrude

there?"

"I wish to speak with a member, Mr. A----, and was not aware it was

against the rules to enter the building."

"Then we'll make you aware for the future," said a coarse but

iron-fisted jobber, prepared to suit the action to the word.

My friend disengaged himself as far as possible, and speaking in a calm

but authoritative tone, said, "Sirs, I am quite sure you do not mean to

insult, in my person, a minister of the Church of England; but take

notice, the first man who dares to molest me shall feel the weight of my

fist, which is not a light one. Stand by, and let me leave this

inhospitable place." They did stand by, and he rushed into the street

without sustaining any actual violence.

Practical joking, says an _habitue_, relieves the excitement of this

feverish gambling. The stockbrokers indulge in practical jokes which

would be hardly excusable in a schoolboy. No member can wear a new hat

in the arena of bulls and bears without being tormented, and his chapeau

irrecoverably spoiled. A new coat cannot be worn without peril; it is

almost certain to be ticketed "Moses and Son--dear at 18s. 6d." The

pounce-box is a formidable missile, and frequently nearly blinds the

unwary. As P. passes K.'s desk, the latter slily extends his foot in

order to trip him up; and when K. rises from his stool, he finds his

coat-tail pinned to the cushion, and is likely to lose a portion of it

before he is extricated. Yet these men are capable of extreme

liberality. Some years ago knocking off hats and chalking one another's

backs was a favourite amusement on the Stock Exchange, as a vent for

surplus excitement, and on the 5th of November a cart-load of crackers

was let off during the day, to the destruction of coats. The cry when a

stranger is detected is "Fourteen hundred," and the usual test question

is, "Will you purchase any new Navy Five per Cents., sir?" The moment

after a rough hand drives the novice's hat over his nose, and he is spun

from one to another; his coat-tails are often torn off, and he is then

jostled into the street. There have been cases, however, where the

jobbers have caught a Tartar, who, after half-strangling one and

knocking down two or three more, has fairly fought his way out, pretty

well unscathed, all but his hat.

The amount of business done at the Stock Exchange in a day is enormous.

In a few hours property, including time bargains, to the amount of

L10,000,000, has changed hands. Rothschild is known in one day to have

made purchases to the extent of L4,000,000. This great speculator never

appeared on the Stock Exchange himself, and on special occasions he

always employed a new set of brokers to buy or sell. The boldest attempt

ever made to overthrow the power of Rothschild in the money market was

that made by a Mr. H. He was the son of a wealthy country banker, with

money-stock in his own name, though it was really his father's, to the

extent of L50,000. He began by buying, as openly as possible, and

selling out again to a very large amount in a very short period of time.

About this time Consols were as high as 96 or 97, and there were signs

of a coming panic. Mr. H. determined to depress the market, and carry on

war against Rothschild, the leader of the "bulls." He now struck out a

bold game. He bought L200,000 in Consols at 96, and at once offered any

part of L100,000 at 94, and at once found purchasers. He then offered

more at 93, 92, and eventually as low as 90. The next day he brought

them down to 74; a run on the Bank of England began, which almost

exhausted it of its specie. He then purchased to a large extent, so that

when the reaction took place, the daring adventurer found his gains had

exceeded L100,000. Two years after he had another "operation," but

Rothschild, guessing his plan, laid a trap, into which he fell, and the

day after his name was up on the black board. It was then discovered

that the original L50,000 money-stock had been in reality his father's.

A deputation from the committee waited upon Mr. H. immediately after his

failure, and quietly suggested to him an immediate sale of his furniture

and the mortgage of an annuity settled on his wife. He, furious at this,

rang the bell for his footman, and ordered him to show the deputation

down stairs. He swore at the treatment that he had received, and said,

"As for you, you vagabond, 'My son Jack' (the nickname of the

spokesman), who has had the audacity to make me such a proposal, if you

don't hurry down stairs I'll pitch you out of window."

Nicknames are of frequent occurrence on the Stock Exchange. "My son

Jack" we have just mentioned. Another was known as "The Lady's Broker,"

in consequence of being employed in an unfortunate speculation by a lady

who had ventured without the knowledge of her husband. The husband

refused to pay a farthing, and the broker, to save himself from the

black board, divulged the name of the lady who was unable to meet her

obligations.

It is a fact not generally known, says a writer on the subject, that by

one of the regulations of the Stock Exchange, any person purchasing

stock in the funds, or any of the public companies, has a right to

demand of the seller as many transfers as there are even thousand pounds

in the amount bought. Suppose, for instance, that any person were to

purchase L10,000 stock, then, instead of having the whole made over to

him by one ticket of transfer, he has a right to demand, if he so

pleases, ten separate transfers from the party or parties of whom he

purchased.

The descriptions of English stock which are least generally understood

are scrip and omnium. Scrip means the receipt for any instalment or

instalments which may have been paid on any given amount which has been

purchased on any Government loan. This receipt, or scrip, is marketable,

the party purchasing it, either at a premium or discount, as the case

chances to be, becoming of course bound to pay up the remainder of the

instalments, on pain of forfeiting the money he has given for it. Omnium

means the various kinds of stock in which a loan is absorbed, or, to

make the thing still more intelligible, a person purchasing a certain

quantity of omnium, purchases given proportions of the various

descriptions of Government securities.

Bargains made one day are always checked the following day, by the

parties themselves or their clerks. This is done by calling over their

respective books one against another. In most transactions what is

called an option is given, by mutual consent, to each party. This is

often of great importance to the speculator. It is said that the

business at the Stock Exchange is illegal, since an unrepealed Act of

Parliament exists which directs all buying and selling of Bank

securities shall take place in the Rotunda of the Bank.

There are about 1,700 members of the Stock Exchange, who pay twelve

guineas a year each. The election of members is always by ballot, and

every applicant must be recommended by three persons, who have been

members of the house for at least two years. Each recommender must

engage to pay the sum of L500 to the candidate's creditors in case any

such candidate should become a defaulter, either in the Stock Exchange

or the Foreign Stock market, within two years from the date of his

admission. A foreigner must have been resident in the United Kingdom for

five years previous, unless he is recommended by five members of the

Stock Exchange, each of whom becomes security for L300. The candidate

must not enter into partnership with any of his recommenders for two

years after his admission, unless additional security be provided, and

one partner cannot recommend another. Bill and discount brokers are

excluded from the Stock Exchange, says the same writer, and no

applicant's wife can be engaged in any sort of business. No applicant

who has been a bankrupt is eligible until two years after he has

obtained his certificate, or fulfilled the conditions of his deed of

composition, or unless he has paid 6s. 8d. in the pound. No one who has

been twice bankrupt is eligible unless on the same very improbable

condition.

If a member makes any bargains before or after the regular business

hours--ten to four--the bargain is not recognised by the committee. No

bonds can be returned as imperfect after three days' detention. If a

member comes to private terms with his creditors, he is put upon the

black board of the Exchange as a defaulter, and expelled. A further

failure can be condoned for, after six months' exile, provided the

member pays at least one-third of any loss that may have occurred on his

speculations. For dishonourable conduct the committee can also chalk up

a member's name.

It is said that a member of the Stock Exchange who fails and gives up

his last farthing to his creditors is never thought as well of as the

man who takes care to keep a reserve, in order to step back again into

business. For instance, a stockbroker once lost on one account L10,000,

and paid the whole without a murmur. Being, however, what is called on

the Stock Exchange "a little man," he never again recovered his credit,

it being suspected that his back was irretrievably broken.

But a still more striking and very interesting illustration of the

estimation in which sterling integrity is held among a large proportion

of the members was afforded (says Mr. Grant) in the case of the late Mr.

L.A. de la Chaumette, a gentleman of foreign extraction. He had

previously been in the Manchester trade, but had been unfortunate. Being

a man much respected, and extensively known, his friends advised him to

go on the Stock Exchange. He adopted their advice, and became a member.

He at once established an excellent business as a broker. Not only did

he make large sums, in the shape of commissions on the transactions in

which he was employed by others, but one of the largest mercantile

houses in London, having the highest possible opinion of his judgment

and integrity, entrusted him with the sole disposal of an immense sum of

money belonging to the French refugees, which was in their hands at the

time. He contrived to employ this money so advantageously, both to his

constituents and himself, that he acquired a handsome fortune. Before he

had been a member three years, he invited his creditors to dine with him

on a particular day at the London Tavern, but concealed from them the

particular object he had in view in so doing. On entering the room, they

severally found their own names on the different plates, which were

reversed, and on turning them up, each found a cheque for the amount due

to him, with interest. The entire sum which Mr. L.A. de la Chaumette

paid away on this occasion, and in this manner, was upwards of L30,000.

Next day, he went into the house as usual, and such was the feeling

entertained of his conduct, that many members refused to do a bargain

with him to the extent of a single thousand. They looked on his payment

of the claims of his former creditors as a foolish affair, and fancied

that he might have exhausted his resources, never dreaming that, even if

he had, a man of such honourable feeling and upright principle was

worthy of credit to any amount. He eventually died worth upwards of

L500,000.

The locality of the Stock Exchange (says the author of "The Great

Babylon," probably the Rev. Dr. Croly) is well chosen, being at a point

where intelligence from the Bank of England, the Royal Exchange, and the

different coffee-houses where private letters from abroad are received,

may be obtained in a few minutes, and thus "news from all nations" may

be very speedily manufactured with an air of authenticity. One wide

portal gapes toward the Bank, in Bartholomew Lane; and there is a

sally-port into Threadneedle Street, for those who do not wish to be

seen entering or emerging the other way. From the dull and dingy aspect

of these approaches, which, it seems, cannot be whitened, one could form

no guess at the mighty deeds of the place; and when the hourly

quotations of the price of stocks are the same, the place is silent, and

only a few individuals, with faces which grin but cannot smile, are seen

crawling in and out, or standing yawning in the court, with their hands

in their breeches' pockets. If, however, the quotations fluctuate, and

the Royal Exchange, where most of the leading men of the money market

lounge, be full of bustling and rumours, and especially if characters,

with eyes like basilisks, and faces lined and surfaced like an asparagus

bed ere the plants come up, be ever and anon darting in at the north

door of the Royal Exchange, bounding toward the chief priests of Mammon,

like pith balls to the conductor of an electric machine, and, when they

have "got their charge," bounding away again, then you may be sure that

the Stock Exchange is worth seeing, if it could be seen with comfort, or

even with safety. At those times, however, a stranger might as well jump

into a den of lions, or throw himself into the midst of a herd of

famishing wolves.

Among the various plans adopted for securing early intelligence for

Stock Exchange purposes before the invention of the telegraph, none

proved more successful than that of "pigeon expresses." Till about the

beginning of the century the ordinary courier brought the news from the

Continent; and it was only the Rothschilds, and one or two other

important firms, that "ran" intelligence, in anticipation of the regular

French mail. However, many years ago, the project was conceived of

establishing a communication between London and Paris by means of

pigeons, and in the course of two years it was in complete operation.

The training of the birds took considerable time before they could be

relied on; and the relays and organisation required to perfect the

scheme not only involved a vast expenditure of time, but also of money.

In the first place, to make the communication of use on both sides of

the Channel, it was necessary to get two distinct establishments for the

flight of the pigeons--one in England and another in France. It was then

necessary that persons in whom reliance could be placed should be

stationed in the two capitals, to be in readiness to receive or dispatch

the birds that might bring or carry the intelligence, and make it

available for the parties interested. Hence it became almost evident

that one speculator, without he was a very wealthy man, could not hope

to support a pigeon "express." The consequence was, that, the project

being mooted, two or three of the speculators, including brokers of the

house, themselves joined, and worked it for their own benefit. Through

this medium several of the dealers rapidly made large sums of money; but

the trade became less profitable, because the success of the first

operators induced others to follow the example of establishing this

species of communication. The cost of keeping a "pigeon express" has

been estimated at L600 or L700 a year; but whether this amount was

magnified, with the view of deterring others from venturing into the

speculation, is a question which never seems to have been properly

explained. It is stated that the daily papers availed themselves of the

news brought by these "expresses;" but, in consideration of allowing the

speculators to read the despatches first, the proprietors, it is said,

bore but a minimum proportion of the expense. The birds generally used

were of the Antwerp breed, strong in the wing, and fully feathered. The

months in which they were chiefly worked were the latter end of May,

June, July, August, and the beginning of September; and, though the news

might not be always of importance, a communication was generally kept up

daily between London and Paris in this manner.

In 1837-38-39, and 1840, a great deal of money was made by the "pigeon

men," as the speculators supposed to have possession of such

intelligence were familiarly termed; and their appearance in the market

was always indicative of a rise or fall, according to the tendency of

their operations. Having the first chance of buying or selling, they, of

course, had the market for a while in their own hands; but as time

progressed, and it was found that the papers, by their "second

editions," would communicate the news, the general brokers refused to do

business till the papers reached the City. The pigeons bringing the news

occasionally got shot on their passage; but, as a flock of some eight or

a dozen were usually started at a time, miscarriage was not of frequent

occurrence. At the time of the death of Mr. Rothschild, one was caught

at Brighton, having been disabled by a gun-shot wound, and beneath the

shoulder-feathers of the left wing was discovered a small note, with the

words "Il est mort," followed by a number of hieroglyphics. Each pigeon

had a method of communication entirely their own; and the conductors, if

they fancied the key to it was in another person's power, immediately

varied it. A case of this description occurred worth noting. The parties

interested in the scheme fancied that, however soon they received

intelligence, there were others in the market who were quite equal with

them. In order to arrive at the real state of affairs, the chief

proprietor consented, at the advice of a friend, to pay L10 for the

early perusal of a supposed rival's "pigeon express." The "express" came

to hand, he read it, and was not a little surprised to find that he was

in reality paying for the perusal of his own news! The truth soon came

out. Somebody had bribed the keepers of his pigeons, who were thus not

only making a profit by the sale of his intelligence, but also on the

speculations they in consequence conducted. The defect was soon remedied

by changing the style of characters employed, and all went right as

before.

When a defalcation takes place in the Stock Exchange (says a City writer

of 1845), the course pursued is as follows:--At the commencement of the

"settling day," should a broker or jobber--the one through the default

of his principals, and the other in consequence of unsuccessful

speculations--find a heavy balance on the wrong side of his accounts,

which he is unfortunately unable to settle, and should an attempt to get

the assistance from friends prove unavailing, he must fail. Excluded

from the house, the scene of his past labours and speculations, he

dispatches a short but unimportant communication to the committee of the

Stock Exchange. The other members of the institution being all assembled

in the market, busied in arranging and settling their accounts, some of

them, interested parties, become nervous and fidgety at the

non-appearance of Mr. ---- (the defaulter in question). The doubt is

soon explained, for the porter stationed at the door suddenly gives

three loud and distinctly repeated knocks with a mallet, and announces

that Mr. ---- presents his respects to the house, and regrets to state

that he is unable to comply with his "bargains"--_Anglice_, to fulfil

his engagements.

Visit Bartholomew Lane at any time of the year, says a City writer, and

you will be sure to find several people of shabby exterior holding

converse at the entrance of Capel Court, or on the steps of the auction

mart. These are the "Alley men." You will see one, perhaps, take from

his pocket a good-sized parcel of dirty-backed letters, all arranged,

and tied round with string or red tape, which he sorts with as much care

and attention as if they were bank-notes. That parcel is his

stock-in-trade. Perhaps those letters may contain the allotment of

shares in various companies, to an amount, if the capital subscribed was

paid, of many hundreds of thousands of pounds.

To describe fairly the "Alley man," we must take him from the first of

his career. He is generally some broken-down clerk or tradesman, who,

having lost every prospect of life, chooses this description of business

as a _dernier ressort_. First started in his calling, he associates with

the loiterers at the Stock Exchange, where, by mixing with them, and

perhaps making the acquaintance through the introduction of Sir John

Barleycorn, at the tap of a tavern, he is initiated by degrees into the

secrets of the business, and, perhaps, before long, becomes as great an

adept in the sale or purchase of letters as the oldest man on the walk.

When he has acquired the necessary information respecting dealing, he

can commence letter-writing for shares. This is effected at the expense

of a penny only for postage, pen and ink being always attainable, either

in the tavern-parlour or coffee-house he frequents. When a new company

comes out, and is advertised, he immediately calls for a form of

application, fills it up, and dispatches it, with the moderate request

to be allotted one hundred or two hundred shares, the amount of call or

share being quite immaterial to him, as he never intends to pay upon or

keep them, his only aim being to increase his available stock of

letters, so that he can make a "deal," and pocket the profit, should

they have a price among the fraternity.

[Illustration: INNER COURT OF THE FIRST ROYAL EXCHANGE (_See page

495_).]

The purchase of stock is thus described by an _habitue_. "Suppose I

went," he says, "to buy L100 stock in the Four per Cents. I soon know

whether the funds are better, or worse, or steady; for this is the

language of the place. If they are _better_, they are on the rise from

the preceding day; if _worse_, they are lower than on that day; if

_steady_, they have not fluctuated at all, or very little. To render the

matter as intelligible as possible, we will suppose the price to be

80-1/8, that is, L80 2s. 6d. sterling for L100 stock. Upon my asking the

price of the Four per Cents., the answer probably is, "Buyers at an

eighth, and sellers at a quarter;" that is, the jobbers who either buy

or sell will have the _turn_, or 1/8. Now if I leave the purchase to a

broker, he probably gives, without the least hesitation, 80-3/8, because

he may have a friendly turn to make to his brother broker, for a similar

act of kindness the preceding day. Well, but I do _not_ leave the

purchase to a broker; I manage it myself. I direct my broker to buy me

L100 stock at 80-1/4. He takes my name, profession, and place of

residence; he then makes a purchase, and the seller of the stock

transfers it to me, my heirs, assigns, &c., and makes his signature. On

the same leaf of the same book in which the _transfer_ is made to me,

there is a form of acceptance of the stock transferred to me, and to

which I also put my signature; the clerk then witnesses the receipt, and

the whole business is done. The seller of the stock gives me the

receipt, with his signature to it, which I may keep till I receive a

dividend, when it is no longer any use. The payment of the dividend is

an acknowledgment of my right to the stock; and therefore the receipt

then becomes useless."

[Illustration: SIR THOMAS GRESHAM.]

The usual commission charged by a broker is one-eighth (2s. 6d.) per

cent. upon the stock sold or purchased; although of late years the

charge has often been reduced fifty per cent., especially in

speculators' charges, a reduction ascribed to the influx into the market

of a body of brokers who will "do business" almost for nothing, provided

they can procure customers. The broker deals with the "jobbers," a class

of members, or "middle-men," who remain stationary in the stock market,

ready to act upon the orders received from brokers.

There is, moreover, a fund subscribed by the members for their decayed

associates, the invested capital of which, exclusive of annual

contributions, amounts to upwards of L30,000.

The Stock Exchange has numbered amongst its subscribers some valuable

members of society, including David Ricardo and several of his

descendants, Francis Baily the astronomer, and many others, down to

Charles Stokes, F.R.S., not long ago deceased. Horace Smith and the

author of the "Last of the Plantagenets"--himself in his prosperity a

munificent patron of literature--also for a long time enlivened its

precincts. The writer of the successful play of "The Templar," and other

elegant productions, was one of the body.

The managers, in 1854, expended about L6,000 in securing additional

space for the Stock Exchange prior to the commencement of the works, and

the contract was taken at L10,400, some subsequent alterations

respecting ventilation having caused the amount to be already exceeded.

The fabric belongs to a private company, consisting of 400

shareholders, and the shares were originally of L50 each, but are now of

uncertain amount, the last addition being a call of L25 per share, made

for the construction of the new edifice. The affairs of this company are

conducted under a cumbersome and restrictive deed of settlement, by nine

"managers," elected for life by the shareholders, no election taking

place till there are four vacancies. The members or subscribers,

however, entirely conduct their own affairs by a committee of thirty of

their own body. Neither members nor committee are elected for more than

one year.

The number of members at present exceeds 1,700. The subscription is paid

to the "managers," who liquidate all expenses, and adopt alterations in

the building, upon the representations of the committee of the members,

or even on the application of the subscribers. Of the 400 shares

mentioned above, the whole, with scarcely an exception, are held by the

members themselves. No one person is allowed to hold, directly or

indirectly, more than four.

The present building stands in the centre of the block of buildings

fronting Bartholomew Lane, Threadneedle Street, Old Broad Street, and

Throgmorton Street. The principal entrance is from Bartholomew Lane

through Capel Court. There are also three entrances from Throgmorton

Street, and one from Threadneedle Street. The area of the new house is

about 75 square yards, and it would contain 1,100 or 1,200 members.

There are, however, seldom more than half that number present. The site

is very irregular, and has enforced some peculiar construction in

covering it, into which iron enters largely.