THE PRESENT STOCK EXCHANGE
The journals of that day described the hotpursuit 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 manœuvres 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 bearaccount; 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 £20,000, 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 £60,000. 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 £600,000 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, hewas 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 £600,000 Consols, saying, 'As he always so abuses me, they will never suspect he isbearingthe 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 whoknew 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, andsans ceremonieopened 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 togo 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 Rothschildin propriâ personâ. 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 Crœsus, 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 £500,000. 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 £1,500,000, 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 £500,000. He now sells out, at the advanced price, the entire £1,500,000 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 £35,000. 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 £100,000 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 £1,500,000. The security offered by Rothschild was a proportionate amount of stock in Consols, which were at thattime 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 4½ 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 £3,000,000. 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 £10,000,000. 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 £300,000 or £400,000.
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 itsbreeches'-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 £2,000,000.
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 justbeen arrested for a debt of £55, 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 £100, 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 £20,000 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 £20,000, or even £20, in the world. By the next post came a letter enclosing the curate £1,500, the profit on selling out the £20,000 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. Mostunaccountably 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 £100,000. 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 £1,000, "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 £40,000. 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, onhonest 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 £400,000 Consols sustained a loss of from £10,000 to £15,000, 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 £3,000 or £4,000 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 thatcoup£27,000. 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 ofstock 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.
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 theCity 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 anhabitué, 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 £10,000,000, has changed hands. Rothschild is known in one day to have made purchases to the extent of £4,000,000. 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 £50,000. 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 £200,000 in Consols at 96, and at once offered any part of £100,000 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 £100,000. 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 £50,000 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 nicknameof 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 £10,000 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 £500 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 £300. 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 £10,000, 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 extensivelyknown, 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 £30,000. 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 £500,000.
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 handsin 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" hasbeen estimated at £600 or £700 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 £10 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 thespeculations 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"—Anglicè, 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 adernier 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 onthe 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.