Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849

"It is one great evil of the present age, that it persists in regarding the debt as perpetual. Immediately the expenditure is exceeded by the revenue, there is a demand for the reduction of taxation. We, a commercial people, brought up at the feet of M'Culloch, with the books of national debt as a constant study, with the interest on the national debt as a constant remembrancer, persist in scoffing at any idea of decreasing the encumbrance: and when a Chancellor of the Exchequer proposes a loan of eight millions, we growl and grumble, call it charitable, trust for better times, and read the Opposition papers with renewed zest.

There is no doubt that the resources of the nation are equal to far more than is now imposed; but it can only be done by an efficient revision of our taxation, and this will never be effected till the wolf is at the door. A war which greatly increased our yearly imposts would, with the present system, crush the artisan, paralyse the middle class, and scarcely leave the landed proprietor unscathed. The convertibility of the note of the Bank of England would cease; and it would be impossible to preserve the charter of Sir Robert Peel in its entirety, while twenty-eight millions were claimable yearly in specie, and the gold of the country went abroad in subsidies.

In an earlier portion of the volume, the writer briefly advocated annuities as one mode of treating the national debt. There would in this be no breach of faith to the present public; there would be no dread of a general bankruptcy; there would be no need of loans; and, had this principle been carried out, the national debt would be yearly diminishing. In ten years, nearly two millions of terminable annuities will expire, and it behoves the government to inquire into the effect which the conversion of the interminable debt into terminable annuities would have on the money market.

It is absolutely idle for the Financial Reform Association to think of effectually lowering the taxation of the country, while twenty-eight millions are paid for interest; and it is to be feared that great evil will accompany whatever good they may achieve. That there are many offices which might be abolished; that it is a rule in England that the least worked should be best paid; that an extravagant system of barbaric grandeur exists; that the army and the navy, the pulpit and the bar, are conducted unwisely; and that great men are paid great salaries for doing nothing, – is indisputable; but it is equally so that great savings have been effected, and that greater efforts are making to economise further. There is a faith pledged to the public servant as much as to the public creditor; and, whether he be a colonel or a clerk, a man of peace or a man of war, it is impracticable, imprudent, and unjust to attempt that which would as much break faith with him, as to cease to pay the dividends on the national debt would be to break faith with the national creditor.

These things are paltry and puerile compared with that which, excepting a total revision of taxation, can alone materially meet the difficulties of England; and the gentlemen of the Reform Association are aware of this. They may cut down salaries; lower the defences of the country; abolish expensive forms and ceremonies; amalgamate a few boards of direction; reduce the civil list; and do away with all sinecures. But the evil is too vast, and the difficulties are too gigantic, to be met in so simple a manner. Nor will these gentlemen be satisfied with it while there are eight hundred millions at which to level their Quixotic spear. Repudiation was darkly alluded to at one meeting of the Association, and, though it has since been denied, it is to be feared that time only is required to ripen the attempt."

Turn we now from the national debt to its eldest offspring, the Exchange. Marvellous indeed are the scenes to which we are introduced, whether we read its history as in the time of William of Orange, enter it at the period when the South Sea bubble had reached its utmost width of distension, or tread its precincts at a more recent date, when railway speculation was at its height, and the Glenmutchkin at a noble premium. John Bunyan could not have had a glimpse of it, for he died in 1688: nevertheless his Vanity Fair is no inaccurate prototype of its doings. No stranger, indeed, may enter the secret place where its prime mysteries are enacted: if any uninitiated wight should by chance or accident set foot within that charmed circle, the alarm is given as rapidly as in Alsatia when a bailiff trespassed upon the sanctuary. With a shout of "Fourteen hundred fives!" the slogan of their clan, Jew, Gentile, and proselyte precipitate themselves upon the rash intruder. In the twinkling of an eye, his hat is battered down, and amidst kicks, cuffs, and bustling, he is ejected from the temple of Mammon. But, lingering in the outer court and vestibule, we can gain some glimpses of the interior worship; imperfect, indeed, but such as may well deter us from aspiring to form part of the congregation.

The creation and transferable character of public funds, necessarily involved the existence of a class of men who deal in such securities. That class multiplied apace, and multiplied so much that, after a time, the commissions exigible for each boná fide transaction could not afford a decent subsistence for all who were engaged in the business. People who buy into the stocks with a view to permanent investment, are not usually in a hurry to sell; and this branch of the profession, though, strictly speaking, the only legitimate one, could not be very lucrative. Gambling was soon introduced. The fluctuations in the price of the funds, which were frequent in those unsettled times, presented an irresistible temptation to buying and selling for the account – a process by means of which a small capital may be made to represent fictitiously an enormous amount of stock: no transfers being required, and in fact no sales created, the real stake being the difference between the buying and the selling prices. But, the natural fluctuations of the stocks not affording a sufficient margin for the avarice of the speculators, all sorts of deep-laid schemes were hatched to elevate or depress them unnaturally. In other words, fraud was resorted to, from a very early period, for the purpose of promoting gain. The following may serve as an example: – "The first political hoax on record occurred in the reign of Anne. Down the Queen's road, riding at a furious rate, ordering turnpikes to be thrown open, and loudly proclaiming the sudden death of the Queen, rode a well-dressed man, sparing neither spur nor steed. From west to east, and from north to south, the news spread. Like wildfire it passed through the desolate fields where palaces now abound, till it reached the City. The train-bands desisted from their exercise, furled their colours, and returned home with their arms reversed. The funds fell with a suddenness which marked the importance of the intelligence; and it was remarked that, while the Christian jobbers stood aloof, almost paralysed with the information, Manasseh Lopez and the Jew interest bought eagerly at the reduced price." The whole thing was a lie, coined by the astute Hebrews, who then, as now, accumulated the greater part of their money in this disgraceful and infamous manner, and doubtless had the audacity even to glory in their shame. A more ingenious trick was played off in 1715, when a sham capture was made in Scotland of a carriage and six, supposed to contain the unfortunate Chevalier St George. The news, being despatched to London, instantly elevated the funds, "and the inventors of the trick laughed in their sleeves as they divided the profit." Modern jobbers will doubtless read these records with a sigh for the glory of departed times, just as a schoolboy bitterly regrets that he was not born in the days of chivalry. Universal rapidity of communication, and the power of the press, have rendered such operations on a large scale almost impossible. The electric telegraph has injured the breed of carrier pigeons, and more than half the poetry of fraudulent stock-jobbing has disappeared.

The range of the jobbers speedily extended itself beyond the comparatively narrow field presented by the funds. Exchequer bills with a variable premium were invented and brought into the market, a large and lucrative business was done in lottery tickets, and even seats in parliament were negotiated on the Stock Exchange. Joint-stock companies next came into play, and these have ever since proved an inexhaustible mine of wealth to the jobbers. Nor were they in the least particular as to the nature of the commodity in which they dealt. Thomas Guy, founder of the hospital called after his name, acquired his fortune by means similar to those which are now made matter of reproach to the Jews of Portsmouth and Plymouth. It is a curious feature in the history of mankind, that money questionably amassed is more often destined to pious uses than the savings of honest industry. The conscience of the usurer becomes alarmed as the hour of dissolution draws nigh. "His principal dealings were in those tickets with which, from the time of the second Charles, the seamen had been remunerated. After years of great endurance, and of greater labour, the defenders of the land were paid with inconvertible paper; and the seamen, too often improvident, were compelled to part with their wages at any discount, which the conscience of the usurer would offer. Men who had gone the round of the world like Drake, or had fought hand to hand with Tromp, were unable to compete with the keen agent of the usurer, who, decoying them into the low haunts of Rotherhithe, purchased their tickets at the lowest possible price; and skilled seamen, the glory of England's navy, were thus robbed, and ruined, and compelled to transfer their services to foreign states. In these tickets did Thomas Guy deal, and on the savings of these men was the vast superstructure of his fortune reared. But jobbing in them was as frequent in the high places of England as in 'Change Alley. The seaman was poor and uninfluential, and the orders which were refused payment to him were paid to the wealthy jobber, who parted with some of his plunder as a premium to the treasury to disgorge the remainder." But frauds and injustice, even when countenanced by governments, have rarely other than a disastrous issue to the state. So in the case of those seamen's tickets. That the wages due to the sailor should have fallen into arrears during the reigns of Charles and of James, need excite little surprise, when we remember that the revenue in their day never exceeded two millions annually. But that the abuse should have been continued after the revolutionary government had discovered its easy method of raising subsidies – more especially when ample proof had been given of the danger of such a system, by the want of alacrity displayed by the English seamen when the Dutch fleet burned our vessels in the Thames and threatened Chatham – is indeed matter of marvel, and speaks volumes as to the gross corruption of the times. So infamous was the neglect, that at length the sailors' tickets had accumulated to the amount of nine millions sterling of arrears. Not one farthing had been provided to meet this huge demand; and in order to stay the clamours of the holders – not now mariners, but men of the stamp of Thomas Guy, – parliament erected them into that body known as the South Sea Company, the transactions of which will ever be memorable in the commercial history of Great Britain.

The existence of this company dates from the reign of Queen Anne; but for some years its operations were conducted on a small scale, and it only assumed importance in 1719, when exclusive privileges of trading within certain latitudes were assured to it. We quote from Mr Doubleday the following particulars, which utterly eclipse the grandeur of modern gambling and duplicity.

"As soon as the act had fairly passed the Houses, the stock of the company at once rose to three hundred and nineteen per cent; and a mad epidemic of speculative gambling seemed, at once, to seize the whole nation, with the exception of Mr Hutchison, and a few others, who not only preserved their sanity, but energetically warned the public of the ultimate fate of the scheme and its dupes. The public, however, was deaf. The first sales of stock by the Court of Directors were made at three hundred per cent. Two millions and a quarter were taken, and the market price at one reached three hundred and forty– double the first instalment according to the terms of payment. To set out handsomely, the Court voted a dividend of ten per cent upon South Sea Stock, being only a half-yearly dividend, payable at midsummer 1720. To enable persons to hold, they also offered to lend half a million on security of their own stock; and afterwards increased the amount to a million, or nearly so. These bold steps gained the whole affair such an increase of credit, that, upon a bare notice that certain irredeemable annuities would be received for stock, upon terms hereafter to be settled, numbers of annuitants deposited their securities at the South Sea House, without knowing the terms! About June, when the first half-yearly dividend was becoming due, the frenzy rose to such a pitch, that the stock was sold at eight hundred and ninety per cent. This extravagance, however, made so many sellers, that the price suddenly fell, and uneasiness began to be manifested; when the Directors had the inconceivable audacity to propose to create new stock at one thousand per cent, to be paid in ten instalments of one hundred pounds each. Strange to relate, this desperate villany turned the tide again, and, to use the words of Anderson, 'in a few days the hundred pound instalment was worth four hundred!'"

We invariably find that the success, whether real or pretended, of any one scheme, gives rise to a host of imitations. If any new company, whatever be its object, is started, and the shares are selling at a premium, we may look with perfect confidence for the announcement of six or seven others before as many days have elapsed. This is, of course, partly owing to the cupidity of the public; but that cupidity could not manifest itself so soon in a tangible form, but for the machinations of certain parties, who see their way to a profit whatever may be the result of the speculation. Amidst the ruin and desolation which invariably follow those seasons of infuriated and infatuated gambling, to which we are now almost habituated, such men preserve a tranquil and a calm demeanour. And no wonder: they have reaped the harvest which the folly of others has sown. At the hottest and most exciting period of the game, they have their senses as completely under control as the sharper who has deliberately dined on chicken and lemonade, with the prospect of encountering afterwards an inebriated victim at Crockford's. They may play largely, but they only do so while their hand is safe; the moment luck changes, they sell out, and leave the whole loss to be borne by the unfortunate dupes, who, believing in their deliberate falsehoods, still continue to hold on, trusting to the advent of those fabulous better times which, in their case, never can arrive. It has been so in our own times, and it was so when the South Sea bubble was expanding on its visionary basis. Multitudes of minor schemes were projected, subscribed for, and driven up to an exorbitant premium. The shares of really solid companies participated in the rise, and mounted correspondingly in the market. The nominal value of all the sorts of stock then afloat was computed at no less than five hundred millions; being exactly double the estimated value of the whole lands, houses, and real property in the kingdom!

The collapse came, and brought ruin to thousands who thought that they held fortune within their grasp. The history of the downfall is not less suggestive than that of the rapid rise. It has had its parallel in our days, when the most rotten and unsubstantial of companies have brazened out their frauds to the last, doctored accounts, declared fictitious dividends, and threatened with legal prosecution those who had the courage and the honesty to expose them.

"The minor bubbles burst first, when the South Sea schemers were foolish enough to apply for a scire facias against their projectors, on the ground that their schemes injured the credit of the grand scheme. This turned quondam allies into furious enemies. The scire facias was issued on 13th August 1720, when the downfall began; and Mr Hutchison saw his predictions completely fulfilled. The South Sea villains, in sheer desperation, declared a half-yearly dividend of thirty per cent due at Christmas, and offered to guarantee fifty per cent per annum for twelve years! They might as well have declared it for the thirtieth of February. Everything was done to prop the reputation of the directors, but all was in vain; and when the stock fell at last to one hundred and seventy-five, a panic ensued, and all went to the ground together, totally ruining thousands, and nearly dragging the Bank and East India Company along with it."

Mr Francis gives us some interesting anecdotes of the casualties arising from this gigantic scheme of imposture. Gay, the author of the Beggar's Opera, was a holder of stock, and at one time might have sold out with a profit of twenty thousand pounds – an opportunity very rarely vouchsafed to a poet. In spite of shrewd advice, he neglected his chance, and lost every penny. One Hudson, a native of Yorkshire, who had succeeded to a large fortune, went deeply into the scheme. From a millionnaire he became a beggar and insane, and wandered through the streets of London a pitiable object of charity. But it would be work, of supererogation to multiply instances of similar calamity. They are reproduced over and over again at the conclusion of every fit of wild and reckless speculation; and yet the warning, terrible as it is, seems to have no effect in restraining the morbid appetite.

It would, we apprehend, be impossible to find any one who will advocate gambling upon principle; though a multitude of excellent persons, who would shrink with horror were the odious epithet applied to them, are, nevertheless, as much gamblers as if they were staking their money at rouge-et-noir or roulette. The man who buys into a public stock with the intention of selling in a week or a fortnight, in the expectation of doing so at an advanced price, or the other who sells shares which he does not possess, in the confident belief of a speedy fall, is, in everything save decency of appearance, on a par with the haunter of the casino. He may, if he so pleases, designate himself an investor, but, in reality, he is a common gamester. This may be a hard truth, but it is a wholesome one, and it cannot be too often repeated, at a time when general usage, and yielding to temptation, have perverted words from their ordinary significance, and led many of us to justify transactions which, when tried by the standard of morality, and stripped of their disguise, ought to be unhesitatingly condemned. "He that loveth gold shall not be justified," said the son of Sirach. "Many have sinned for a small matter; and he that seeketh for abundance will turn his eyes away. As a nail sticketh fast between the joinings of the stones, so doth sin stick close between buying and selling." This spirit, when it becomes general in the nation, cannot be otherwise than most hurtful to its welfare, since it diverts the thoughts of many from those industrial pursuits which are profitable to themselves and others, and leads them astray from that honourable and upright course which is the sure and only road to wealth, happiness, and esteem. This has been, to a certain extent, acknowledged by government, even within our own time. The pernicious effect of the lotteries, originally, a state device, upon the morals and condition of the lower classes, as testified by the vast increase of crime, became at length so glaring, that these detestable engines of fraud were suppressed by act of parliament. They still linger on the Continent, as most of us have reason to know from the annual receipt of documents, copiously circulated by the Jews of Hamburg and Frankfort, offering us, in exchange for a few florins, the chance of becoming proprietors of several chateaux on the Rhine, with boar-forests, mineral springs, vineyards, and other appurtenances. We presume, from the continuity of the circulars, that Israel still finds its dupes; but we never happened, save in one of Charles Lever's novels, to hear of any person lucky enough to stumble on the ticket which secured the right to Henkersberg, Bettlersbad, or Narrenstein. The extent to which lottery gambling was carried in this country seems to us absolutely incredible. Derby sweeps were nothing to it.

"In 1772," says Mr Francis, "lottery magazine proprietors, lottery tailors, lottery staymakers, lottery glovers, lottery hatmakers, lottery tea merchants, lottery barbers – where a man, for being shaved and paying threepence, stood a chance of receiving £10; lottery shoeblacks, lottery eating-houses – where, for sixpence, a plate of meat and the chance of 60 guineas were given; lottery oyster-stalls – where threepence gave a supply of oysters, and a remote chance of five guineas, were plentiful; and, to complete a catalogue which speaks volumes, at a sausage-stall, in a narrow alley, was the important intimation written up, that, for one farthing's worth of sausages, the fortunate purchaser might realise a capital of five shillings. Quack doctors, a class which formed so peculiar a feature in village life of old, sold medicine at a high price, giving those who purchased it tickets in a lottery purporting to contain silver and other valuable prizes."

A new discovery was presently made, which had a serious effect upon trade. Money-prizes were discontinued, and shopkeepers, parcelling out their goods, disposed of them by lottery. As a matter of course, this business, commenced by disreputable adventurers, proved most injurious to the regular dealer. People refused to buy an article at the regular price, when it might be obtained for next to nothing. They were, however, utterly wrong, for the staple of the prize goods, when inspected, proved to be of the most flimsy description. Tickets in the state lotteries became the subject of pawn, and were so received by the brokers, and even by the bankers. Suicide was rife; forgery grew common; theft increased enormously. Husbands and fathers saw their wives and children reduced to absolute starvation, and weeping bitterly for bread, and yet pawned their last articles of household furniture for one more desperate chance in the lottery. Wives betrayed their husbands, and plundered them, for the same purpose. Servants robbed their masters; commissions and offices were sold. Insurance was resorted to, to accommodate all classes. Those who had not money to pay for tickets might insure a certain number for a small sum, and thus obtain a prize; and so lottery grew upon lottery, and the sphere was indefinitely extended. It was not until 1826 that this abominable system, was finally crushed. The image of the vans, placards, and handbills of Bish is still fresh in our memory; and we pray devoutly that succeeding generations may never behold a similar spectacle.

It would be in vain for us, within the limits of an article, to attempt even the faintest sketch of the speculative manias which, from time to time, have affected the prosperity of Great Britain. Some of these have been quite, as baseless as the South Sea bubble, and may be directly traced to the agency and instigation of the Stock Exchange. Others were founded upon schemes of manifest advantage to the public, and even to the proprietary, if cautiously and wisely carried out; but here again the passion for gambling has been insanely developed, and encouraged by those who sought to make fortunes at the expense of their dupes. There is at all times, in this country, a vast deal of unemployed capital, which, in the cant phrase, "is waiting for investment," and which cannot well be invested in any of the ordinary channels of business. The fact is, that within the area of Britain, it has been long difficult for a capitalist to select a proper field of operation; and the tendency of recent legislation has materially increased the difficulty. The country, in fact, may be considered as entirely made. Agricultural improvement, on a large scale, which implied the possession of a tract of unprofitable country, was considered, even before the repeal of the corn laws, as no hopeful speculation. Since that disastrous event, the chances have naturally diminished; and we suspect that, by this time, very few people have any faith in Sir Robert Peel's proposal for establishing new colonies in Connaught. When we find the Whig Lord Monteagle denouncing free trade as the bane of Ireland, we may be sure that few capitalists will sink their funds in the western bogs, hoping that they may appear again in the shape of golden grain which may defy the competition of the fertile valleys of America. We have quite enough of factories for all the demand which is likely to come for years: instead of building new ones, it is always easy, if any one has a fancy for it, to purchase abandoned mills at a very considerable discount; but we do not find such stock eagerly demanded in the market. Foreign competition has extinguished several branches of industry to which capital might be profitably applied, and materially injured others; so that moneyed men really are at a loss for eligible investment. This want has been felt for a long time; and the uncertain policy of our ministers, with regard to colonial affairs, has undoubtedly had an injurious effect upon the prosperity of these dependencies. We have annihilated much of the capital invested in the West Indies, and have withdrawn a great deal more. It is long since Adam Smith urged the propriety and the policy of identifying some of our more important colonies with Great Britain, by the simple process of incorporation, thus extending materially the field of the capitalist upon security equal to that which he can always command at home. Such an opportunity is at this moment afforded by Canada; but it seems that we will rather run the risk of seeing Canada merge in the United States than make any sacrifice of our pride, even where our interest is concerned. A considerable deal of capital has gone to Australia; but we suspect, from late events, that the future supply will be limited.

Before the railways opened to capitalists a channel of investment which appeared exceedingly plausible, and which was, in a great measure, guaranteed by the result of experiment, vast masses of realised wealth accumulated from time to time. Upon these hoards the members, myrmidons, and jobbers of the Stock Exchange, cast a covetous eye: they whispered to each other, in the language of King John —

"Let them shake the bags
Of hoarding abbots; angels imprisoned
Set thou at liberty: the fat ribs of peace
Must by the hungry now be fed upon:
Use our commission in its utmost force."

Acting upon this principle, they made their business to find out new channels of investment – an easier task than the discovery of a north-western passage in the arctic regions – and to represent these in all the glowing colours which are peculiar to the artists of 'Change Alley.

The year 1823 was remarkable for the commencement of an epidemic which proved, in its effects, even more disastrous than the South Sea delusion. It would be tedious to enumerate or discuss the causes which led to this sudden outburst; some of them have been indirectly traced to the operation of Sir Robert Peel's famous Currency Act of 1819, which fettered the Bank of England, whilst it left the country bankers free to issue unlimited paper, and to the respite of the smaller notes which had been previously doomed to extinction. Whatever may have been the cause, speculation began and increased at a rate which was quite unprecedented. All kinds of ridiculous schemes found favour in the public eye: nothing was too absurd or preposterous to scare away applicants for shares. Mining, building, shipping, insurance, railway, colonising, and washing companies were established: even an association for the making of gold was subscribed for to the full amount, and doubtless a balloon company for lunar purposes would have been equally popular. This period was marked by the apparition of an entirely new animal in the precincts of the Stock Exchange. Bulls, bears, and even lame ducks, were creatures coeval with its existence; but the "stag," in its humanised form, first appeared in 1823. The following sketch might pass for a view of Capel Court some two-and-twenty years later: —

"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 pocket-book containing worthless scrip; with crafty countenance and cunning eye; with showy jewellery 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 portrait in 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 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 rumoured profit of some lucky speculator, the rumoured 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 of 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 any 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 sketch is not over-coloured. No one can have forgotten the sudden swarm of flesh-flies, called from corruption into existence during the heat of the railway mania, and the ridiculous airs of importance which they assumed. A convulsion of this kind – for it can be styled nothing else – does infinite injury to society; for the common greed of gain too often breaks down the barriers which morality, education, and refinement have reared up, and proves that speculation, as well as poverty, has a tendency to make men acquainted with strange companions.

There were, however, features in the mania of 1823 which distinguish it from every other. The joint-stock companies established for domestic bubble purposes engrossed but a limited share of the public attention; though the extent of that limitation may be estimated by the fact, that five hundred and thirty-two new companies were projected, with a nominal subscribed capital of £441,649,600. Of course only a mere fraction of this money was actually put down; still the gambling in the shares was enormous. The greater part of the capital actually abstracted from the country went in the shape of foreign loans, of which there were no less than twenty-six contracted during that disastrous period, or very shortly before, to an amount of about fifty-six millions. On sixteen of these loans interest has ceased to be paid. We find among the borrowers such states as Chili, Buenos Ayres, Colombia, Guatemala, Gunduljava, Mexico, and Peru, not to mention Greece, Portugal, and Spain, countries which have set to Europe a scandalous example of repudiation. Most of these loans purported to bear interest at the rate of six per cent, and some of them were contracted for at so low a figure as 68; nevertheless, with all these seeming advantages, it appears marvellous that people should have lent their money on such slender security as the new republics could offer. We observe that Mr Francis has revived the antiquated scandal touching Joseph Hume's "mistake" with regard to the Greek bonds, a story which has been a sore thorn in the side of the veteran reformer. We think he might have let it alone. The real mistake lay on the part of those who assumed that Joseph's philanthropic interest in the Greek cause was so intense as to suffer him for one moment to lose sight of his own. His anxiety to back out of a bad bargain was perfectly natural. He never was an Epaminondas, and he felt justly irritated at the foolishness of the Greeks in persisting that he should sustain the heroic character, at the expense of his privy purse, when the stock had fallen to a discount. If, when it rose again to par, the Greek deputies were weak enough to repay him the amount of his loss, with the uttermost farthing of interest, that was their concern. When a senatorial sympathiser gives the aid of his lungs to the cause of suffering humanity, he has surely done enough. Why mulct him further from the pocket?

Those foreign loans, and the drain of bullion which they occasioned, speedily brought on the crisis. It was a very fearful one, and for the second time, at least, the Bank of England was in danger. It was then that mighty establishment owed its safety to the discovery of a neglected box of one pound notes, which, according to the evidence of Mr Harman, one of the principal directors, saved the credit of the country. The coffers of the bank were exhausted, almost to the last sovereign; and but for that most fortunate box, cash payments must have been suspended in December 1825, a position of affairs the issue of which no human intelligence could predicate. Subsequent legislation has not been able to guard us against the possibility of a similar recurrence. All that has been done is to insure the certainty of an earlier and more frequent panic, and to clog the wheels of commerce by rendering discounts impracticable at periods when no speculation is on foot. But as far as regards the stability of the Bank of England, under our present monetary laws, no provision has been made, in any way commensurate to the additional risk occasioned by the absorption of the twenty millions and upwards lodged in the savings-banks, all which must, when required, be repaid in the precious metals; and in case of any convulsion, or violent alarm, it is clear that such a demand would be made. The experience of 1832 has clearly demonstrated how the fate of a ministry may be made to depend upon the position of the establishment in Threadneedle Street.

It is perhaps not to be wondered at that, in a commercial country like ours, wealth should command that respect and homage which, in other times, was accorded to the possessors of nobler attributes. We make every allowance for the altered circumstances of the age. High and heroic valour, as it existed before, and undoubtedly still does exist, has not the same field for its display as in the days when Christendom was leagued against the Infidel, or even in those, comparatively later, when contending factions made their appeal to arms. Our wars, when they do occur, are matters of tactics and generalship; and physical courage and daring has ceased to be the path to more than common renown. Where most are loyal, and no treason is at hand, loyalty is no conspicuous virtue. Those who are distinguished in the walks of literature and science need not covet adulation, and very seldom can command it. Their fame is of too noble and enduring a quality to be affected by ephemeral applause; and it is good for them to work on in patience and in silence, trusting for their reward hereafter. The substantiality of wealth, the power and patronage which it commands, will inevitably make its possessor more conspicuous in the eyes of the community, than if he were adorned with the highest mental attributes. All things are measured by money: and when money is acknowledged as the chief motive power, he who knows best how to amass it cannot fail to be the object of attention. But the marked and indiscriminate homage which is paid to wealth alone, without regard to the character of the possessor, or the means through which that wealth has been acquired, is, in our estimation, a feature disgraceful to the age, and, were it altogether new, would justify us in thinking that the spirit of independence had declined. We shall hold ourselves excused from illustrating our meaning by making special reference to a recent but striking instance, in which wealth suddenly acquired, though by most iniquitous means, raised its owner, for a time, to the pinnacle of public observation. We prefer selecting from the pages of Mr Francis the portrait of a man whose character displayed nothing that was great, generous, benevolent, or noble; whose whole life and whole energies were devoted to the acquisition of pelf; whose manners were coarse; whose person was unprepossessing; whose mind never ranged beyond its own contracted and money-making sphere; and who yet commanded, in this England of ours, a homage greater than was ever paid to virtue, intellect, or valour. Such a man was Nathan Meyer Rothschild, the famous Jew capitalist.

Originally from Frankfort, this remarkable man came over to England towards the close of last century, and commenced operations in Manchester, where he is said to have speedily trebled his first capital of £20,000: —

"This," says Mr Francis, "was the foundation of that colossal fortune which afterwards passed into a proverb; and in 1800, finding Manchester too small for the mind which could grapple with these profits, Rothschild came to London. It was the period when such a man was sure to make progress, as, clear and comprehensive in his commercial views, he was also rapid and decisive in working out the ideas which presented themselves. Business was plentiful; the entire Continent formed our customers; and Rothschild reaped a rich reward. From bargain to bargain, from profit to profit, the Hebrew financier went on and prospered. Gifted with a fine perception, he never hesitated in action. Having bought some bills of the Duke of Wellington at a discount – to the payment of which the faith of the state was pledged – his next operation was to buy the gold which was necessary to pay them, and, when he had purchased it, he was, as he expected, informed that the government required it. Government had it – but, doubtless, paid for the accommodation. 'It was the best business I ever did!' he exclaimed triumphantly; and he added that, when the government had got it, it was of no service to them until he had undertaken to convey it to Portugal."

Rothschild was, in fact, a usurer to the state, as greedy and unconscionable as the humbler Hebrew who discounts the bill of a spendthrift at forty per cent, and, instead of handing over the balance in cash to his victim, forces him to accept the moiety in coals, pictures, or cigars. His information was minute, exclusive, and ramified. All the arts which had been employed on the Stock Exchange in earlier times were revived by him, and new "dodges" introduced to depress or to raise the market.

"One cause of his 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 sank the price two or three per cent. This was the result expected; and 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 rose instantly; and Mr Rothschild reaped his reward."

The morality of the ring has sometimes been called in question; but we freely confess, that we would rather trust ourselves implicitly to the tender mercies of the veriest leg that ever bartered horse-flesh, than to those of such a man as "the first baron of Jewry" – a title which was given him by a foreign potentate, to the profanation of a noble Christian order.

Such were the doings of Rothschild: let us now see him in person. "He was a mark for the satirists of the day. His huge and somewhat slovenly appearance; the lounging attitude he assumed, as he leaned against his pillar in the Royal Exchange; his rough and rugged speech; his foreign accent and idiom, made caricature mark him as its own; while even caricature lost all power over a subject which defied its utmost skill. His person was made an object of ridicule; but his form and features were from God. His mind and manners were fashioned by circumstances; his acts alone were public property, and by these we have a right to judge him. No great benevolence lit up his path; no great charity is related of him. The press, ever ready to chronicle liberal deeds, was almost silent upon the point; and the fine feeling which marked the path of an Abraham Goldsmid, and which brightens the career of many of the same creed, is unrecorded by the power which alone could give it publicity."

Mr Disraeli, in some of his clever novels, has drawn the portrait of a great Jew financier in colours at once brilliant and pleasing. His Sidonia, whilst deeply engaged in money-making pursuits, is represented as a man of boundless accomplishment, expanded intellect, varied information, and princely generosity. He is the very Paladin of the Exchange – a compound of Orlando and Sir Moses Montefiore. The extravagance of the conception does not prevent us from admiring the consummate skill of the author, in adapting his materials so as to elevate our ideas and estimate of the Hebrew idiosyncrasy. Sidonia is as much at home in the palace as in the counting-room; his great wealth ceases to be the prominent feature, and becomes the mere accessory of the polished and intellectual man; avarice never for one moment is permitted to appear; on the contrary, the prodigality of the munificent Hebrew is something more than Oriental. We may refuse to believe in the reality of such a character, which implies a combination of the most antagonistic pursuits, and a union of mental attributes which could not possibly coexist; but, this difficulty once surmounted, we cannot challenge the right of so eminently gifted an individual to take his place among the true nobility of the earth. We fear, however, that such a phœnix of Palestine has no existence, save on paper. Certain it is, that Rothschild was not the man; and yet Rothschild, in his day, commanded as much homage as the novelist has claimed for Sidonia. Great is the power of money! Princes feasted with him; ambassadors attended him to the tomb; and yet, for all we can learn, he was not equal, in moral worth, to the meanest pauper in the workhouse. He would at times give a guinea to a street beggar, not for the object of relieving his wants, but to enjoy the joke of seeing him run away, under the apprehension that the donor had been mistaken in the coin! His wealth was gained by chicanery, and augmented by systematic deceit; and yet attend to the words of the chronicler: —

"Peers and princes of the blood sat at his table; clergymen and laymen bowed before him; and they who preached loudest against mammon, bent lowest before the mammon-worshipper. Gorgeous plate, fine furniture, an establishment such as many a noble of Norman descent would envy, graced his entertainments. Without social refinement, with manners which, offensive in the million, were but brusque in the millionnaire; he collected around him the fastidious members of the most fastidious aristocracy in the world. He saw the representatives of all the states in Europe proud of his friendship. By the democratic envoy of the New World, by the ambassador of the imperial Russ, was his hospitality alike accepted; while the man who warred with slavery in all its forms and phases, was himself slave to the golden reputation of the Hebrew. The language which Mr Rothschild could use when his anger overbalanced his discretion, was a license allowed to his wealth; and he who, when placed in a position which almost compelled him to subscribe to a pressing charity, could exclaim, "Here, write a cheque – I have made one – fool of myself!" was courted and caressed by the clergy, was fêted and followed by the peer, was treated as an equal by the first minister of the crown, and more than worshipped by those whose names stood foremost on the roll of a commercial aristocracy. His mode of dictating letters was characteristic of a mind entirely absorbed in money-making; and his ravings, when he found a bill unexpectedly protested, were translated into mercantile language before they were fit to meet a correspondent's eye. It is painful to write thus depreciatingly of a man who possessed so large a development of brain; but the golden gods of England have many idolaters, and the voice of truth rarely penetrates the private room of the English merchant."

Poor as Lazarus may be, let him not envy the position of Dives. Even in this world, riches cannot purchase happiness. Any pecuniary loss was enough to drive Rothschild to despair. His existence was further embittered by the dread of assassination – no uncommon symptom, when the mind is rarely at ease; and those who knew him best, said that he was often troubled with such thoughts, and that they haunted him at moments when he would willingly have forgotten them. "Happy!" he said, in reply to the compliment of a guest – "me happy! what! happy when, just as you are going to dine, you have a letter placed in your hands, saying, 'If you do not send me £500, I will blow your brains out?' Happy! – me happy!" We are not compassionate enough to wish that it had been otherwise. Such thoughts are the foreshadowing of the end of those who have prospered beyond their deserts, and have failed in making even that negative expiation, which conscience sometimes extorts from the apprehensions of unscrupulous men.

And here we shall close our remarks. There is still a fertile field before us, on which we might be tempted to enter; but that discussion would bring us too near our own days, and involve the resumption of topics which have already been handled in Maga. The time doubtless will come, when, after the cessation of some new fit of speculation, and when men are cursing their folly, and attempting by late industry to repair their shattered fortunes, some historian like Mr Francis shall take up the pen, and chronicle our weakness, as that of our fathers is already chronicled. In the meantime, it would be well for all of us seriously to lay to heart the lesson which may be drawn from this interesting record. Speculation, carried beyond due bounds, is neither more nor less than a repetition of the old game of Beggar my Neighbour, under another form. To fair and legitimate enterprise we owe much of our modern improvement; which has been further rendered necessary by the pressure which has increased, and is increasing upon us. To unfair and illegitimate enterprise, undertaken for the sole purpose of immediate gain, we owe nothing save periods of great misery and desolation. The game of Beggar my Neighbour may be played privately or publicly. Some of us have taken a hand in it privately, with what results we shall keep to ourselves. For several years back, our statesmen have played the public game, and played it well. They have succeeded in inflicting successively a blow upon each great interest of the country, by dealing with each separately, and by alienating the sympathy of the others. The game is now pretty well played out; and when we come to reckon our counters, it is evident from the result, that not one of the parties so dealt with has been a winner! Who, then, are the gainers? We think the answer is plain. They are the Capitalist and the Foreigner.

MY PENINSULAR MEDAL

BY AN OLD PENINSULAR

PART II

CHAPTER IV

We held our course, after parting with our friends in the boat, and were soon at the harbour's mouth. The breeze continued to freshen, and the swell to increase. Our little Wilhelmina now began to give us a specimen of her qualities as a sea-boat. Labouring through the curled and crested seas, creaking, groaning, vibrating from stem to stern; now balancing, with her keel half bare, on the summit of a lofty surge, now deep in a liquid trough; now kicking up behind, now running her nose bang into a bank of water; now pointing skywards, as if bound to the moon, and not to Lisbon; now pitching, now jig-jigging it, she simulated the paces of a Spanish genet – a great deal of action, very little progress.

By the time we were clear of the harbour, and in comparatively smooth water, the wind had shifted to the north-west; our course lay south, and, being sheltered by the land, we soon exchanged the jig-jigging of our exit from port for a far more agreeable, because more equable motion, as we drove over ocean's swell. It had already become palpably evident that none of our military friends were good sailors. Now, however, they were all able to stand without holding – all, I should say, but one unhappy individual, and that was Mr Commissary Capsicum, who had been reduced to a miserable state of disorder by the active movements of the brig, and whose actual symptoms were by no means those of convalescence.

Night closed in. It was past twilight, yet not wholly dark – in short, that interval between twilight and perfect night, for which in English we have no word, but which the richer language of Burns expressively designates as "the gloaming." Little more than enough of it to fill the sails and give the vessel way, the wind was soft, and at times scarcely perceptible. The waves heaved lazily; the ship surmounted them with measured rise and fall; and, though the heavens were overcast, a light, different from that of day, clear but faint, was equably diffused on all sides. The tremulous surface of the ocean, dark, but distinguishable to the horizon, was there sharply outlined against the pale but still luminous sky.

Since we left port in the morning, what with showers and spray, wind and sunshine, I had been more than once wet through and dry again. The consequences were now perceptible. I shivered inwardly. My mind, too, was ill at ease. After much reflection, and some self-examination, I came to this conclusion: that something was requisite, something was indispensable, in my actual condition both of mind and body. What that something was, did not instantly occur to me. I asked myself the question point-blank – I answered it. The problem was solved: I wanted – a nightcap. Down I rushed into the cabin. "Steward, bring me some hot water and a little brandy." – "Yes, sir; a glass of hot brandy and water, sir; coming directly, sir." – "No, no, steward; that's not what I called for. Bring the brandy and the hot water separate. I'll mix for myself."

"Quite right," growled a feeble voice. It was poor, unhappy, still-very-far-from-perfectly-recovered Mr Capsicum's. The falling of the wind had so far abated the ship's movements, that his worst symptoms were now relieved. Still, however, he was far, very far, from well. Most of the passengers had turned in; but there, by lamplight, sat poor Capsicum at the cabin table, from sheer listlessness, destitute of sufficient energies to put himself to bed, a lamentable spectacle.

"Suppose you join me, then," said I. "Do you good."

"Can't, can't," said he, plaintively. "Couldn't get it down, if I knew it would make me well this instant. Wish I could. I'll see you take yours, though. That'll be some comfort, anyhow."