To the amazement and mystification of old Skinner, he laid out ten thousand pounds in Exchequer bills, and followed this up by other large purchases of paper, paper, nothing but paper.
Hardie senior was nervous.
“Are you true to your own theory, Richard?”
The youth explained to him that blind confidence always ends in blind distrust, and then all paper becomes depreciated alike, but good paper is sure to recover. “Sixty-two shillings discount, sir, is a ridiculous decline of Exchequer bills. We are at peace, and elastic, and the government is strong. My other purchases all rest upon certain information, carefully and laboriously amassed while the world was so busy blowing bubbles. I am now buying paper that is unjustly depreciated in Panic, i.e., in the second act of that mania of which Bubble is the first act.” He added: “When the herd buy, the price rises; when they sell, it falls. To buy with them and sell with them is therefore to buy dear and sell cheap. My game—and it is a game that reduces speculation to a certainty—is threefold:
“First, never, at any price or under any temptation, buy anything that is not as good as gold.
“Secondly, buy that sound article when the herd sells it.
“Thirdly, sell it when the herd buys it.”
“Richard,” said the old man, “I see what it is—you are a genius.”
“No.”
“It is no use your denying it, Richard.”