CHAPTER VI.
It is a true saying, that when mothers begin to talk of their children they never know when to stop; and the children, who might otherwise have found favour, are thereby made to appear as uninteresting and vexatious bores.
I will try to avoid falling into this error, and only tell you enough to enable you to understand the peculiarities of mine.
You may have noticed how great a variety exists in the characters and dispositions of the members of every large family, and will not be surprised to hear that the same individuality of character shows itself in the family of Funds and Stocks.
In introducing you to the steadiest and most reliable of my children, I feel that I am putting you in the way of deriving real advantage. If, however, you prefer the less worthy, the more daring and speculative, I shall feel that no blame attaches to me.
Have you ever remarked, in your round of visits among your friends, that it is almost possible to tell the character of host and hostess by the people you meet there, and even by the servants who wait upon you—all seem to take the tone of the house? I notice this specially among my children. For example, my “Three per Cent. Consols” and my “New Three’s,” whom I select as specially suited to be your friends, have the most courteous, kindly, sober and religious class of visitors; on the faces of all, old and young, clergy and laity, there is an expression of repose and security and “well-to-doism” which is charming; while, on the other hand, the faces and manners of those who visit some of my other children are so wild, so haggard, so restless, that you cannot help wishing that some good fairy would give them a soothing syrup, or else insist on their choosing safer friends; but if you ever pay me a visit, and use your eyes, you will see more of this than, as a mother, I can tell you.
Against one thing, however, I am, as your friend, bound to warn you. Listen to no one who proposes to let you have money at a very cheap rate, while at the same time he offers to pay you large interest on it. More I cannot say at present.
Closely connected with me, and in my neighbourhood, stands a most mysterious building, known as the Stock Exchange. Its chief entrance is in Capel-court, Bartholomew-lane.
None may pass within its portals but those specially privileged, still I may tell you something about it without breaking through any of the barriers which the inhabitants have set up between the public and themselves.
This Stock Exchange is an association of about two thousand persons, all men, of course, who meet together in Capel-court, and who agree to be governed by a committee of thirty, chosen from among themselves.
To the outside world, all the members are known by the name of “stockbrokers,” but inside the mysterious building they divide themselves into two classes—“stockjobbers” and “stockbrokers.”
Whether they be one or the other, their lives, occupations, fortunes and reputations are bound up with the Stocks and Funds. They live for them and they live on them. They determine their value, they study every shade of temper exhibited by the family, they decide their rise and fall, they are their interpreters and mouthpieces, they act also as their bodyguard: none can approach but through them.
These two classes, jobbers and brokers, have a distinct work, which I will try to make clear to you.
To start with, the stockjobber does not deal with the public, but the stockbroker does.
You see stocks and shares are marketable commodities; you can buy them, sell them, or transfer them, and the stockjobber is, as it were, the wholesale merchant, and the stockbroker the retail dealer. Let me explain. If you required twenty yards of black silk, you would probably go to Marshall and Snelgrove or to Peter Robinson for it. You certainly would not think of going to a wholesale house in the City for it; and if you did, the article would not be supplied to you in this way—it is contrary to the etiquette of trade.
Just in the same manner, if you wanted to buy some stock, you would go to a stockbroker for it, and not to a stockjobber—the stockbroker occupying the same position as Marshall and Snelgrove, while the stockjobber stands in the place of the wholesale house in the City.
The stockjobber, or wholesale merchant, is always ready both to buy and sell with the broker. If you give an order to the latter, he darts into the Stock Exchange, and without disclosing the nature of his order to the jobber, inquires of him the price of the particular stock which you wish to deal in. The jobber names two prices: one at which he is prepared to buy (the lowest price, of course), the other at which he is willing to sell (the highest price).
Thus, if the price of Consols was given by him as 100¼ to 100½, it would mean that if you wanted him to take some stock of you he would give you £100 5s. for each £100 of stock; and that if you desired to buy some stock of him, you must pay him £100 10s. for each £100.
These prices are the limits which the jobber sets himself. He is often ready to give more or to sell for less than the prices he at first names, according to what is known as the state of the market.
The profits of the jobber and the broker are not of the same kind; the jobber makes his money out of the difference between the price at which he buys the stock of you and sells it to someone else.
The broker charges you a small percentage on the cost of the stock by way of commission for his services in the matter; this does not include stamp duty or fee, but otherwise he undertakes any incidental service which may be necessary to give you the full proprietorship of the stock.
Stockjobbers, or wholesale stock merchants, are, as you see, very necessary, for brokers could not at all times accommodate their customers; it might be that one would want to sell at a moment when there was no one to buy; as it is, however, all is made easy by the jobbers, who are at all times ready both to buy and sell, and to almost any amount.
It does sometimes happen that they promise to sell more than they possess, and then they have to borrow and pay for the use of it on their clearing day, which takes place once a month for Consols and similar securities, and once a fortnight for other stocks within the Exchange. It would never do for members of the Stock Exchange to fall short of their obligations.
The mystery that has always hung about this building has greatly increased since it has been in combination with the Exchange Telegraph Company of London, with all its scientific developments and its electric currents. Between this bureau and the Stock Exchange ghostly, silent messages pass the livelong day concerning the health, the value, the rise and the fall of the various stocks and funds, and in a few seconds these mysterious messages are wafted through the length and breadth of the land.
I am a curious, inquisitive old lady, and as there were many points in these mysterious proceedings I could not understand, I went to the bureau a short time back, and begged Mr. Wilfred King, the courteous and clever secretary of the company, to make them clear to me.
I was very interested in what he said about the rapidity with which the messages are transmitted. He assured me that the result of the last Derby was known all over London before the horses had had time to stop after they had passed the winning-post; and, again, that during the last Parliamentary session the debates, by means of this company, were known at the Crystal Palace before they reached the smoking-room of the House of Commons.
As I stood watching the clever instrument pouring out silently and persistently its yards of tape messages, I asked as a favour that Mr. King would cut off a piece, that I might show it to you. You will see that the language is conveyed by means of simple lines, over which he was so kind as to write the letters so represented—
The following little sketch will give you some idea of the instrument and its working:—
I should like you to know more of this wonderful place; but it belongs to my life only inasmuch as it carries my messages so silently and rapidly that people hundreds of miles away can do business with me in the same hour, and the result is that many thousands of pounds pass through my hands in a day, which might otherwise have remained idle.
You will possibly feel surprised to hear that on an average six millions of pounds[2] are daily passed in London, without a single coin being used, and without any inconvenience or fatigue; whereas such a sum as this, if paid in gold or silver, would necessitate the carrying backward and forward over many miles some hundred tons weight.
Like many other gigantic transactions, it is brought about in an insignificant building in a court leading out of Lombard-street, and therefore close to my residence.
It is not a mysterious place like the Stock Exchange, but its power of working is so wonderful as to be quite beyond the power of woman to take in.
It transfers more money in one week than the whole quantity of gold coin in the kingdom amounts to; and not the least wonderful thing about it is that the entire work is performed by about thirty well trained clerks, in the most exact, regular, and simple manner.
The place I am speaking of is the Bankers’ Clearing House—not to be confounded with that in the Stock Exchange. It was established in 1775 by bankers who desired a central place where they might conduct their clearing, or balancing, and their needs led them to the invention of a simple and ingenious method of economising the use of money. Almost all their payments are in the form of cheques upon bankers.
The system of clearing is quite as important in money matters as division of labour is in manufactures, and deserves a much more thorough explanation than I can give here; and my only excuse for mentioning it at all is to show you how wonderfully different my position is now, strengthened as it is by the development of science, knowledge, and experience, from what it was in my early days.
While my transactions have increased a thousandfold, money, labour, and time have in an equal degree been economised.
I thought myself very rich formerly with a fortune of £1,200,000, and I considered that I and my household had a great deal to do in the management of it, and the work which fell to my lot. Dear me! I can call back the picture of even a hundred and twenty years ago. My own house was so small that passers-by could scarcely recognise it; the population of London was only half a million, and there was but one bridge over the Thames connecting my side of the City with Southwark; and as to that mysterious building, the Stock Exchange, it did not exist. You know, also, for I have told you, that my directors only employed fifty-four secretaries and clerks, and that their united salaries did not exceed £4,350. The contrast between then and now is marvellous even to me.
Only look at it. The proprietors’ capital is now fourteen millions and a half instead of £1,200,000; I am the Banker of the Government; I receive the Public Revenue; I pay the National Debt; I receive and register transfers of stock from one public creditor to another, and I make the quarterly payment of the dividends. I have undertaken also the management of the Indian Debt, as well as the Funded Debt of the Metropolitan Board of Works. What do you think of that for a woman old as I am in years? You must own that, notwithstanding my age, I am young and vigorous in thought, in action, and in organisation, otherwise how could I get through my work as I do?
“GHOSTLY, SILENT MESSAGES.”
My profits, too, are, when compared with those in my young days, enormous. You wanted to know, if I remember rightly, how I lived, and how I obtained the money to pay you your dividends; and whether, in this respect, I was worthy of your trust.
Well, I will tell you a few of the ways in which I make money. I obtain large sums by discounting Exchequer Bills; then there is the interest upon the capital stock in the hands of the Government; I receive, also, an allowance for managing the Public Debt. Up to 1786 I used to get £562 10s. for every million; it was then reduced to £450 a million; and since 1808 I get £300 per million up to 600 millions, and £150 per million beyond—a nice little sum for you to work out.
A further source of income is interest on loans, on mortgages, profit on purchase of bullion, and many other small matters. I am careful, you see, not to have all my eggs in one basket.
For help in all this work I employ between eight and nine hundred officers and servants, whose salaries exceed £210,000 a year.
I think I am a good mistress. I am sure I do my best to take care of all my people, and I am acquainted with every one of them, even with those who perform what is called menial service (I don’t like that word; every service is honourable, if well performed); but I do confess that I am extremely strict and particular and I am intolerant of mistakes, from whatever cause they arise, because they dim the lustre of my honour.
I think on the whole I have reason to be proud of my servants. Indeed, I have a firm belief that no lady in the land is served better or more faithfully.
I think you will like to hear a little about the way I manage my people.
First of all, I make every increase of salary to depend upon punctuality in the morning, knowing as I do its importance. I am equally particular that those living within the house shall keep good hours at night.
Then I do not mind giving occasional leave of absence, if urgently required; but I don’t allow anyone to take what is called “French leave” without paying a fine for each day’s absence.
When my people get too old for service, I like to feel that they will not suffer want; so I give them a pension in proportion to the salary they are receiving at the time they retire. I spend about £40,000 in this way—a spending which has nothing but pleasure in it for me.
I started a library some time ago for the younger members of my household, by giving them a large room and £500 for books. It has since been kept going by themselves, each subscriber paying eight shillings a year. Between three and eight on certain days in the week you may see numbers of them making their way thither for reading and recreation. Those who prefer it may have books to take home. One of my representatives is always present during these hours, just to show our interest in their recreation.
The kind feeling, however, is not at all one-sided, as I have had frequent opportunities of judging. Times of trouble, panic, and sickness never fail to show me the love and devotion of my people, and that they have not hesitated to sacrifice their lives for my safety is a matter of history.
During the hours of the night, when I take my well-earned sleep, I am watched over by my faithful servants, who take it in turn, two at the time, to keep watch, in which loving duty they are assisted by a company of Foot Guards.
So you see on the whole I am a happy woman, a very busy one, and I think a safe one for you to trust.
(To be continued.)