Chronicles and characters of the stock exchange

by of the Bank of England John Francis

If the increase to the debt last recorded was caused by a disgraceful war and a powerless ministry, that which followed was no less remarkable for the brilliancy of its operations and the greatness of its achievements. Since the treaty of Aix-la-Chapelle, the English and French East India Companies had been fighting for supremacy, and the animosity spread to the colonies. A British force was cut off in America, and some French vessels were taken on the West India seas. War seemed necessary, and, when commenced, proved at first sufficiently humiliating. Hanover was attacked by France, and petty German princes were subsidized to defend it. Minorca, commanded by Blakeney, a superannuated general, was taken by Richelieu, a superannuated fop. Braddock was defeated in America; Admiral Byng refused to engage the French fleet; and an outcry arose for his life, which appalled the men who governed the councils of the country. Shops were filled with libels; walls were covered with satires. The English people, rarely yielding to the thirst for blood, demanded that of the unpopular admiral; and the prime minister trembled for his neck. Our navy could scarcely keep the sea, and the army was commanded by men desirous only of seeking emolument and avoiding risk. Enterprise and energy were absent. In the West, our power was paralyzed; in the East it was endangered. From every county in the kingdom, from every town in the empire, vengeance was demanded. The Duke of Newcastle vacated the place of prime minister; a change was effected; and from that period a succession of conquests filled the kingdom with pride, and raised the fame of the country. The accession of Mr. Pitt to the post of prime minister was felt in every department. France, attacked on some, and menaced on all points, suffered disastrous defeats, retired from Germany, and saw her West and East Indian colonies wrested from her. In one action, thirty-six sail of the line, fifty frigates, and forty-five sloops were taken or destroyed, and the sea swept clear of the fleets that had insulted our coasts and our colonies. Triumph after triumph, conquest after conquest, and, it must be added, loan after loan, were witnessed. Goree and Guadaloupe were taken. The Heights of Abraham beheld the fall of Wolfe and of Quebec; Montreal was subdued; and the total cession of Canada followed. The fleet to which the French court had confided its American possessions was destroyed, and captured standards were borne through the streets amidst triumphant shouts, which deadened the roar of the cannon.

The accession of George III. did not interfere with the conduct of the war. Nineteen millions were voted the first year of his reign; and though Mr. Pitt retired from the councils of his Majesty, the contest was carried on with the same energy; while the system of subsidies was continued with a profusion which has been rarely paralleled. Triumphs such as these produced their effects on the opponents of England. Spain and Portugal were anxious for peace; France was impoverished, the plate of her monarch converted into money; and, in 1762, a just and honorable peace was concluded.

It is remarkable, also, that public distress was never less apparent than during this war; and the rare picture was presented of a people supporting without murmurs the trials and the taxes of a wide and costly contest. Prosperity and wealth at home hid the price at which the victories were purchased abroad. London was never more thriving; and the importance of several manufacturing districts dates from the success of the seven years’ war. During this period, the whole continent of America fell into our power. Twenty-five islands were captured; twelve great battles won; nine fortified cities, and forty forts and castles, taken. One hundred ships of war and twelve millions of specie acquired; sixty millions added to the national debt, and fifty-two millions raised by taxes.

To produce the peace which followed this contest, bribery was resorted to, and the public money wasted. “The peace of 1763,” said John Ross Mackay, private secretary to the Earl of Bute, and afterwards Treasurer to the Ordnance, “was carried through and approved by a pecuniary distribution. Nothing else could have surmounted the difficulty. I was myself the channel through which the money passed. With my own hand I secured above one hundred and twenty votes on that vital question. Eighty thousand pounds were set apart for the purpose. Forty members of the House of Commons received from me a thousand pounds each. To eighty others I paid five hundred pounds apiece.”

The continued corruptions produced continued irregularity. George II. said he was the only master who did not see his servants remunerated; adding, to Mr. Pelham, that if the civil list were not paid, he would find another minister. Remonstrances on the injury to the national and individual interest were so frequent, that the king declared he would inspect the accounts himself.

The Duke of Newcastle, then prime minister, bowed, and promised to send the papers; and the following morning, a cart loaded with official accounts was paraded in the court-yard of the palace. With much violence, the monarch demanded the cause of the display. “They form a portion of the accounts your Majesty desired to inspect,” was the reply; “there is another wagon-full on the road.”

One specimen of the accounts his Majesty had offered to investigate was, however, quite sufficient; and the public complaint remained unalleviated.

In 1742, £1,384,000 6s. 3d. was under the sole direction of the Earl of Orford for secret-service money, of which £50,077 18s. went to the newspapers; and the amount of this supply expended in the six weeks preceding the resignation of the Earl of Orford was more than during the three previous years.

In 1766, the House of Commons compelled the East India Company to rescind a vote which the excitement of the time had induced them to pass. The success of Lord Clive, the important commercial consequences to which it led, and the plunder which rewarded the victories of the soldier, had fired the brains of the East India proprietary. The most extravagant reports were promulgated, and half-yearly dividends of fifty per cent. were confidently promised. The value of the stock rose enormously; and the directors divided at the rate of thirteen per cent. per annum. When it was found that the corporation were enabled to divide thus liberally, Parliament, under the pretence that it might lead to a dangerous panic, interposed with a strong hand, directed that the annual dividend of the Company should be limited to ten per cent., and that all accumulations beyond should accrue to the state. Great opposition was evinced. The corporation, having paid liberally for their charter, would not quietly submit to an interference which so materially decreased its value; and, having formerly bribed with success, tried the same process, but without the same result. The changes in the opinion of the “independent” members, as they were bribed by the Company or awed by the minister, were somewhat curious; and the cause of Charles Townshend’s tergiversations was probably only a type of many. Having dealt largely in India Stock, he cried up the Company’s claims to serve himself. He then sold out at a profit, and cried them down to serve his friends. It was a complete South-Sea year. A third of the House of Commons was deeply engaged in the traffic; and jobbing was the thermometer by which patriots were made or marred. “From the Alley to the House,” said Walpole, “is like a path of ants.” Most of the members were in Mr. Townshend’s position, and the East India Company were, therefore, restricted in their dividends. The result was, that this corporation is worthy the study of others in the liberality with which it rewards the labors of its clerks. Acting on the fine Mosaic principle, that the ox shall not be muzzled which treadeth out the corn, the Company have made their servants’ interests their own; they have made them understand that their old age shall be liberally protected if they faithfully serve; they have made them know that their widows and orphans shall not be forsaken; and they have, therefore, made them feel that the service of such a company is a pleasure, and not a pain; a love, and not a labor.

It is the curse of English commerce, of English banking, and of English trading generally, that, while large fortunes are made by the principals, the clerks are often remunerated at a rate inferior to that which the merchant pays his favorite domestic. The small number necessary to produce a great income takes away all excuse for this penury; and as four or five are frequently sufficient to produce annual thousands, it is to be regretted that, while the principal seeks the most luxurious abode which wealth can produce, the clerk goes to some cheap suburban home, in which, with his family, he can scarcely unite respectability with life.