CHAPTER XIV.
Monetary Excitement.—Approaches to the Stock Exchange.—Gold Company.—Equitable Loan Company.—Frauds in Companies.—Loan to Foreign States.—Poyais Bubble.
Monetary Excitement.—Approaches to the Stock Exchange.—Gold Company.—Equitable Loan Company.—Frauds in Companies.—Loan to Foreign States.—Poyais Bubble.
The excitement of 1824 and 1825 has usually been considered in reference to banking and the Bank of England. It is the writer’s present purpose to draw attention to the social and moral evils of the period; and, by a simple detail of some curious incidents and dangerous adventures arising out of it, to draw attention to the great and crying iniquities which obtained.
The readiness with which shares were attainable first created a class of speculators that has ever since formed a marked feature in periods of excitement, in the dabblers in shares and loans with which the courts and crannies of the parent establishment were crowded. The scene was worthy the pencil of an artist. With huge pocketbook containing worthless scrip; with crafty countenance and cunning eye; with showy jewelry and threadbare coat; with well-greased locks and unpolished boots; with knavery in every curl of the lip, and villany in every thought of the heart; the stag, as he was afterwards termed, was a prominent portraitin the foreground. Grouped together in one corner might be seen a knot of boys eagerly buying and selling at a profit which bore no comparison to the loss of honesty they each day experienced. Day after day were elderly men, with shabby faces and huge umbrellas, witnessed in the same spot, doing business with those whose characters might be judged from their company. At another point, the youth, just rising into manhood, conscious of a few guineas in his purse, with a resolute determination to increase them at any price, gathered a group around, while he delivered his invention to the listening throng, who regarded him as a superior spirit. In every corner, and in every vacant space, might be seen men eagerly discussing the premium of a new company, the rate of a new loan, the rumored profit of some lucky speculator, the rumored failure of some great financier, or wrangling with savage eagerness over the fate of a shilling. The scene has been appropriated by a novelist as not unworthy his pen. “There I found myself,” he writes, “in such company as I had never seen before. Gay sparks, with their hats placed on one side, and their hands in their breeches pockets, walked up and down with a magnificent strut, whistling most harmoniously, or occasionally humming an Italian air. Several grave personages stood in close consultation, scowling on all who approached, and seeming to reprehend my intrusion. Some lads, whose faces announced their Hebrew origin, and whose miscellaneous finery was finely emblematical of Rag-fair, passed in and out; and besides these, there attended a strangely varied rabble, exhibiting, in all sorts of forms and ages, dirty habiliments, calamitous poverty, and grim-visaged villany. It was curious to me to hear with what apparent intelligence they discussed all the concerns of the nation. Every wretch was a statesman; and each could explain, not only all that had been hinted at in Parliament, but all that was at that moment passing in the bosom of the Chancellor of the Exchequer.”
The entrance to the Stock Exchange became at last so choked up, that nothing but a fine of £5 on those who stopped the way had any effect in dispersing the nuisance.
Among the companies which sprung up daily was one to make gold; and success was declared to be undoubted. The shares were all greedily taken; and it was then advertised, that, as the expense of producing one ounce of gold would cost double the value of the produce, the company would be dissolved, and the deposits kept to pay expenses.
The capital of a mining company was divided between fifty proprietors, whose advertisements and puffs were disgraceful. The meanest utensils of the peasantry were declared to be silver; and, although there were but ninety-nine mines in the whole district, the company professed to have purchased 360. In a place containing 5,000 inhabitants, it was affirmed the projector possessed 3,000 mines; and, although they had been previously abandoned after a loss of £170,000, they were purchased at a high price, and puffed to an enormous premium.
The Equitable Loan Company was another specimen. In paragraphs calculated to excite the sympathy of the public, the directors denounced the profits of the pawnbroker, arraigned his evil practices, and delicatelyconcluded by hinting that a company formed upon the most philanthropic principles, and paying forty per cent., would soon be formed. The philanthropy might have been proclaimed for centuries, but forty per cent. was irresistible. The Duke of York good-naturedly lent his name; members of Parliament were bribed with shares; and when it was honestly said by one, that the bill would never pass the House, the triumphant reply given was, “O, we have so many on the ministerial, and so many on the opposition side, andwe are sure of the saints!” The shares, however, went to a discount; both opposition and ministerial members lost all interest in the nefarious doings of the pawnbrokers, and the philanthropy of the saints faded with the fading vision of forty per cent.
The Bolivar Mining Company boasted of “mountains, not mines,” of metals. A railroad was projected to cross from Dover to Calais. A loan of £225,000 was proposed for Patagonia; another in derision advertised for the Lilliputians and Houyhnhnms of Swift’s political satire; and, to assist them all, a parliamentary steam company announced to pass more rapidly the bills before the House.
At the formation of another mining company, the utmost magnanimity was evinced. Rules were passed that none of the directors should hold more than 200 shares, that all which remained should be brought honestly into the market, and that every thing should be fair. But this moderation waxed weaker as their power increased. Thousands of shares were allotted among the managers, and locked carefully up. A resolution was passed, that no director or officer should be required to pay deposits; and then, employing the most respectable brokers to purchase 1,000 shares with the money of the company, they created a sensation in the market, and sent them to a premium. The person who sold the mines to the company was employed to report upon their value. Opinions the most flattering were given of property absolutely worthless; and, as a proof of the greediness of one party and the incapacity of the other, it may be mentioned that a mine, the full value of which was £400, was purchased at £11,000; and that £121,000 were paid for some which, in almost every instance, were exhausted.
When the Lower Rhine Steam-Navigation Company was announced, it became a great favorite. Large quantities were sold for the account; and, as the settling time approached, the premium rose to 28. The sellers were unable to deliver the shares, and their difficulties became serious. To meet them, new receipts were printed, closely imitating the old, the name only of the banker being changed. The deceit was discovered. A committee sat to elucidate the fraud, and the supposed concoctor was expelled from the Stock Exchange. The circumstance excited great attention at the time; and many more were said to be implicated than it was in the power of the committee to reach.
Another peculiar feature of the period was to be found in the loans which preceded and accompanied the memorable era when the public was wild to lend its capital to foreign states, and the resources of the borrowers were scarcely regarded. The dividends of the English funds were scoffed at; the general rate of percentage was increased in theeyes of the many; Patagonian or Lilliputian securities, which promised eight per cent., were eagerly looked for; and solid loans were followed by visionary dividends.
It is a somewhat curious fact, that directly the Navy five per cents were reduced, the people rushed wildly into new securities to retrieve their loss, and missed in the promises of the one the certainty of the other. In 1822, foreign states which, in some cases, had not even attained the freedom for which they fought, became creditors to the English public to the amount of £10,150,000.
Chili, after a protracted resistance to the mother country, found success followed its efforts. Lord Cochrane gave his powerful support to the navy; and, in 1818, a large tract of coast was declared by him in a state of blockade. The vigor of his Lordship proved too much for the royalists; and in a short period a free constitution, with a popular government, was appointed. But neither the free constitution nor the popular government could do without money. The Chilian republic, therefore, borrowed one million of the English people, at six per cent., and, having received the cash, thought it unnecessary to pay the interest after 1826.
Peru, a place so interesting to the historic reader, from its early discovery, its connection with the Spaniards, and the cruelties of Pizarro, exhibited another specimen of loan-contracting. After years of violent commotion and of resolute resistance, her independence was proclaimed; but independence did not produce quiet, and the name of Bolivar became known in a sanguinary and protracted war. The Spaniards refused quietly to yield their territory; Lima surrendered to Spanish troops; and though they were dispossessed by Bolivar, and Peru became safe from subjugation, doubt, distrust, and anarchy remained. During this period, the opinion of the English people may be guessed from the fact, that they lent, in 1822, £450,000 at six per cent., and that it was contracted for at eighty-eight per cent.
Colombia, which only dates its history as a nation from 1819, followed. During the contest which preceded its independence, the insurgents were supplied with implements of war and ammunition from this country, on the security of debentures bearing ten per cent. interest; and when the great battle, in which Bolivar the hero of American independence obtained a complete victory, and consummated the freedom of Colombia, was fought, the new state borrowed two millions at eighty-four per cent.
Poyais was another instance of English liberality. £200,000 were lent on a security so visionary, that not one dividend was ever paid; while sadder and more sorrowful effects than this followed. Adventures which commercial history has rarely paralleled marked its progress; and sufferings, which make us shudder at the recital were the result of the delusion. But little known out of a particular circle, the name of the Poyais settlement is never mentioned there but with feelings of unmitigated detestation.
A Scotchman, named Gregor MacGregor, claiming to be chief of the clan which bears his name, formed the idea of creating a settlement on the shores of the Black River. The first appearance of this man in a public character was in the service of the patriots of Spanish America.Under the florid title of “General of Brigade of the Armies of the United Provinces of New Granada and Venezuela, and General-in-chief of the Armies destined against the Floridas,” he succeeded in seizing a place known as Amelia Island, which he proposed to use for purposes of aggrandizement. His views proving fallacious, he vacated it, and was next heard of as carrying, with a trifling force, the rich town of Portobello. Here he addressed to his men a manifesto, in which gold and glory, plunder and patriotism, equally occupied its periods. Scarcely was it issued, however, ere the force of MacGregor was surrounded, and the great general could only save his life by leaving his followers, leaping out of the window in his shirt, and swimming on board his ship. It is probable that, during these campaigns, the idea of a settlement first occurred to MacGregor, as, not long after their conclusion, he proposed a plan of emigration about to be related; a plan by which colonization was to extend to that part of America known as the Mosquito country. The more pleasing title of Poyais was given; the Stock Exchange was employed to circulate some bonds for a loan of £200,000, at eighty per cent., on the security of the country; and a land renowned for its inhospitable climate was puffed into a most undeserving celebrity. Every device of human ingenuity was practised. Books were published in which the climate of paradise seemed uncongenial by that of Poyais. The air was soft and balmy; the sun and sky were alike fructifying; the soil yearned to yield its fruits; the water ran over sands of gold. Grain was to grow without sowing. Tortoise-shell, diamonds, and pearls were plentifully promised; and, to the least imaginative, the most glowing realms of the Pacific grew pale in comparison with a region where the sun was ever bright, and the soil ever yielding. Labor would be superseded, life commenced in hardship would end in luxury; while gorgeous pictures of “the finest climate and most fertile place in the world,” excited the undisciplined imagination of those who had the money necessary to convey them thither. A song, to be paid for by a company of Poyais lancers, was chanted in the streets; and the attention of the passing crowd was attracted by hired ballad-singers. The new home was to be graced with a knight of the Green Cross, a colonel to command, three legislative houses to guide its affairs, and a sovereign in the person of Gregor MacGregor, under the romantic title of Cacique of Poyais. An agent was employed to make sales of land, and, unhappily, the applicants were numerous.
Nor was this all. An engraving was published, in which a church attracted the religious sympathies of some, and a bank the mercenary thoughts of others; while a theatre gave an air of civilization and luxury the scene.
Tempted by such descriptions, two hundred and fifty persons embarked for the land of promise; their lives, their fortunes, and their families engaged in a scheme which led to destruction. The mere adventurer was drawn by the beauty of the settlement, the fineness of the climate, and the hope of making a fortune. The son of the soil, who had amassed a capital which in Great Britain was unable to save him from a poor-house, but promised in Poyais a sufficiency for life, gathered his family together, sold his little furniture, reserving, with Scottish piety, theBible which had often consoled his Scottish hearth, and sought an unknown clime, and a new home for his household deities. Notes, payable at the Bank of Poyais, were given in exchange for notes of the Bank of Scotland, under the plea that the latter would not circulate in the Mosquito country. At length, the barks which were to conduct the settlers were entered at Leith harbour; and under different auspices, but with similar results to those which marked the Darien expedition from the same port, they left the spot which many were destined to see no more.
Their arrival at the Black River was ominous. As their vessel neared the new country, a gun was fired, and colors hoisted, to announce the coming of the emigrants. Every moment they looked anxiously out for some symptoms of the settlement. Every eye was strained to see the spire of the church which, in all their dreams, had decorated their home. Every heart beat with a strange, unwonted anxiety as they came near the place which had been pictured in such vivid colors. No great powers of imagination are necessary to conceive their watchful expectation, as hour after hour passed, and their signals remained disregarded; or with what a bounding joy they must have seen the first boat, conveying three white people, approach the ship. The delusion was brief; and a few words damped their hopes and destroyed their visions, by the information that it was a savage, sterile, and desolate spot. Greatly dispirited, they commenced a sad and sullen journey up the creek. With a burning sun and sky above, no traces of civilization around, exhausted by the climate, and galled by insects which the heat of the air nourished in great size, they proceeded with an almost funereal melancholy to their city of refuge. The young and ardent asked for gold and gems; the old and cautious looked at the situation, as, with an anxiety they could not conceal, they questioned of the soil, its capabilities, and its cultivation. “Lo!” wrote one who suffered greatly in this disastrous expedition. “Lo! they said it was all swampy.” By the shades of evening they landed, and eagerly looked for their future home. It was too dark to see where the old town of St. Joseph’s formerly stood, as its site was covered with bushes; and new town there was none, save a couple of huts, scarcely worthy the name. The next day, the terrible heat of the climate demanded shelter; but, with every possible exertion, it occupied three days in clearing sufficient ground for their habitation. Some wept at sight of the desolate spot; others gnashed their teeth; while many, yielding to despair, threw themselves on the ground, and declared themselves abandoned of God and man. The more hopeful were employed in pitching tents, and had scarcely commenced landing the goods, on which their safety depended, when a great gale arose, and the vessel was blown away; nor did they hear of her until a month had elapsed. Their situation was not only painful and perilous, but almost hopeless. Hardy as they were, and fit to battle with any fate, they bore with them those for whose safety they would gladly have perilled their lives.
The young child and the aged grandsire, alike incapable of restraining their wants and wishes, were there. The mother and the infant, the maiden and the matron, had each her representative. “Bushes were around, and the moon above,” wrote one of the survivors. Night broughtits fearful malaria, day its yet more fearful sun; and who can imagine the first dig of the spade which, as it sunk deeply into a soil, half mud and half water, sunk more deeply into the heart of the unhappy agriculturist. They sowed corn, and the sun withered it as it rose from the ground. They planted potatoes, and as they sprung up, they perished from the great heat. A further danger appeared to the settlers. They were told by the king of the Mosquito nation, that no grant would be recognized by him, and that they must acknowledge allegiance or quit his territory. In these circumstances, it was deemed advisable for a deputation to wait upon his Majesty; and over sandy beaches they took their way. Weak from want of food, weary from want of rest, their journey proved one of toil and trouble. The rainy season was fast approaching; sickness and death decimated the wanderers; and vainly did they make desperate efforts to avert their impending fate. One party procured a boat, and started in search of aid; but, unhappily, forgetting to take water, died ere it could attain help. Others bought a canoe, and, with Indians to guide them, were scarcely at sea, ere their treacherous companions plundered and flung them overboard. Those who remained had yet to be acclimated; and sickness added to the sufferings they had already endured. Eating salt provisions, drinking impure water, burning by day and shivering by night, on the borders of a creek which bred disease, with a fatal malaria around, they were unable to resist the ague, which in its worst form seized upon them. Without help and without hope, far from home, in an inhospitable country, sickness seized upon one and all. It spared neither age nor sex, neither strength nor decrepitude. The most resolute fell beneath its power; the weakest felt its fatal influence; and so fearfully was the colony at one time situated, that not one could lift a finger to assist the other. Death ensued; and the only portion of the soil gained by many was that which gave a grave. The mortality was two thirds.
But these were not the only evils. In September, 1824, it was said, “Another thing, in the shape of a Poyais loan, has been brought into the market.” Great as the excitement was, there were not many disposed to risk their money; but those who did were persons who had saved a small amount, which, though insufficient to live upon, was sufficient to excite a desire for more. By this class a considerable sum was advanced; and the ruin which fell upon them was tremendous. Their despair was loud, but useless. The Poyais loan was an epoch from which many dated for the remainder of their lives; and the figure of one of these unhappy speculators must still be familiar to some readers, as she wandered daily through the offices of the Bank of England, and the purlieus of the Stock Exchange, exposed to all the annoyances which fall upon those who earn their bread in the public thoroughfares. The Poyais scrip was destined to a lower employment still. It was used during the mania for foreign loans in 1836, as a mode of jobbing, the turn in which, suited to the pockets of those who dealt in it, varied from a halfpenny to a penny, according to the demand.
Emigration received a great shock; and “to be served like the Poyais settlers” was a common excuse of the poor and unthinking. If, however,the Stock Exchange proved indirectly injurious to the great cause in this instance, one of its members has done more towards its assistance than is often effected by individual exertion. The efforts of Mr. Benjamin Boyd will form an important chapter in some future history of our Australian colonies; as, from his determined energy, an impulse has been given to emigration which no future official supineness can eradicate.
Steam-navigation to Australia is greatly desirable; and governments which, as the present volume proves, often lavish their money unworthily, should at least be ready to assist in achieving so great and beneficial a fact. All local objections are overcome. The difficulty of the “barrier reef” is proved to be an idle dream; and the time will yet arrive when men will wonder that a few thousand pounds should for years have retarded steam-navigation to colonies important alike to the commerce, the comfort, and the civilization of England. The writer gives the following, to show that the few words he has said are not unsupported:—
“We unhesitatingly and confidently reply, that for all this the colony has to thank Mr. Benjamin Boyd. With this gentleman solely the movement originated; by him and his family it has been maintained and supported. To this cause Mr. Boyd has devoted his individual labor; he has lavished his wealth on it; he has enlisted in it the activity and talent of his own relations, and that of their numerous and influential friends; he has supplied them with information and advice, and urged on their flagging zeal, when requisite, up to the formation of the Colonization Society, and the commencement of the Colonization Crusade now in progress. And in this course he has persevered, in spite of obstacles cast in his way by the colonists themselves, in spite of obloquy and ridicule from men who were to benefit by his exertions, but on whose ignorance and supineness his stirring activity was a bitter and ceaseless censure.”