Chronicles and characters of the stock exchange

by of the Bank of England John Francis

But a change of ministry brought a change of measures; and a Tory government refused to maintain a Whig policy. The ministers triumphed, and the treaty of Utrecht was concluded. Then arose that war of words which enlisted the pens of Steele, of Addison, of Swift, and of a host of other and lesser spirits. The Tories said the Whigs had sold us to the Dutch, to fill the pockets of Marlborough. The Whigs said the Tories had sold us to the French, to facilitate the return of the Pretender. The waste of life, the suspension of trade, the accumulation of debt, without an adequate return, were so terribly evident, that the Commons remonstrated, and told her Majesty that £35,302,107 of the supplies were not accounted for.

It must be evident that every fresh war, every new loan, and every public peculation, increased the importance of the members of the Stock Exchange; and when men saw the broker and jobber assuming a position the public was unwilling to grant, they mistook the effect for the cause; and a hundred voices were raised, and a hundred essays written, to prove that the brokers of ’Change Alley were the bane of the nation. A member could hardly make a financial speech, a pamphleteer write a political pamphlet, or a dramatist employ his pen for the public, without dragging in the jobber as an illustration and a cause of the misery of England. Those who had lost their money in the many speculations with which the ’Change abounded, deemed also they had earned a right to decry it. The following is a specimen of their opinion:—“It is a complete system of knavery, founded in fraud, born of deceit, and nourished by trick, cheat, wheedle, forgeries, falsehoods, and all sorts of delusions; coining false news, whispering imaginary terrors, and preying upon those they have elevated or depressed.” Archibald Hutcheson, whose life was afterwards endangered from the determined manner in which he opposed the South-Sea bubble, says that the jobbers vied with the first nobility in the kingdom. Pope wrote,—

“Statesmen and patriots ply alike the Stocks,

Peeress and butler share alike the box;

And judges job, and bishops bite the town;

And mighty dukes pack cards for half-a-crown.”

At any rate, it is certain that, if the national glory was aggrandized, the national debt increased in proportion. From 16 millions to 54 was fearfully felt,—thirty-seven millions and a half being raised by loan, besides thirty millions in taxes, during the war of the Spanish succession.

In 1716, great difficulty was experienced in procuring a loan of £600,000. The interest offered was four per cent.; and while the propriety of the loan was being debated on the second evening, Mr. Lechmere entered the House hastily, and told them that only £45,000 had been subscribed. Sir Robert Walpole instantly rose, and said, “I know that the members of the Stock Exchange have combined not to advance money on the loan. Every one is aware how the administration of this country has been distressed by stock-jobbers.” The interest of four per cent. appeared so low to men accustomed to the enormous premiums of a few years previous, that they treated the proposed terms with contempt, and enlisted the sympathy of the public by reporting that it was the first step towards the reduction of the interest on the national debt. When the same minister proposed a loan of £1,700,000, to supply a deficiency, the opposition was so great, that, had not Sir Robert appealed to an empty exchequer, and declared that the debt had been incurred by a previous government, he would have been refused. The feelings of the House were greatly incensed by the discovery that the money was jobbed away with unequalled recklessness; and public-spirited men were not wanting to resist, in the name of the country, such shameless expenditure. They protested, because—and the protest drawn in 1729 would do for 1849—“the national debt ought not to be increased when the taxes are heavily felt in all parts of the country; when our foreign trade is encumbered and diminished; when our manufactures decay; when our poor daily multiply; and when national calamities surround us.” The report of the commissioners appointed to inquire into public accounts sanctioned the opposition which such men as Sir John Barnard gave to unjust demands. They proved that colonels received large sums from clothing contractors, as premiums for their favor, and that £1,400 had been given for a single contract. “The practice,” said the report, “is so notorious and universal, that it wants no representation.” Some barefaced practices were related in the same document; nor can there be any wonder that, with such gross mismanagement, it was said,—“The army was in the field, no money in the treasury,—none of the remitters would contract again. The Bank refused to lend £100,000 on good security. The navy was 11 millions in debt, and the yearly income greatly deficient.”

In 1717 the Bank first undertook the payment of dividends to the national creditors, previous to which they were paid quarterly; when, however, they were undertaken by the Bank, this plan was found inconvenient, and since that period they have been paid half-yearly.

Sir John Blunt was the projector of the South-Sea bubble, which, in 1720, produced such extraordinary effects in England. As the scheme did not at first prove successful, rumors were spread that Gibraltar and Port Mahon would be exchanged for Peru. The stock soon rose to 1,000 per cent., and the excitement lasted till September, by which time it had sunk to 150. Several eminent goldsmiths and bankers were obliged to abscond; and every family in the kingdom felt the shock.