Chronicles and characters of the stock exchange

by of the Bank of England John Francis

For thirty years the public was filled with impressions of their wealth and crimes; and so late as twenty years ago, Lord Clive was described to the writer as keeping memorials of his guilt in a box beneath his bed, and as having destroyed himself because his past enormities were too great for his conscience to bear. The drama, the story, and the poem, were colored with their eccentricities; while newspapers occasionally recorded facts which marked that, in some at least, a fine generosity was mixed with their grossness.

The effect, however, of these things was to make money plentiful; to raise a spirit of emulation, and a thirst for gold. In addition to this, the banking-house of Douglas, Heron, & Co. circulated its paper with a freedom which had an effect upon the population of Scotland remembered to the present day. Discounts for a time were plentiful. Bills presented by farmers, and accepted by ploughmen, were readily cashed. As is usual in these cases, the dashing character attained by the bank attracted those who should have known better; and many, who boasted of their foresight, paid for their presumption.

In 1771, the result of reckless trading was apparent; and Douglas, Heron, & Co. failed. The shock was felt throughout the empire. The Royal Bank of Scotland tottered to its base; the banking-houses of England shook with a well-grounded fear; and the great corporation of the Bank of England was beset on all sides for assistance, but from none more vehemently than from Mr. Fordyce, of the house of Neale, Fordyce, & Co.,—a firm which, from its position, the importance assumed by its partners, and the known success of some of its speculations, was generally supposed to be beyond suspicion. The career of the man who thus craved assistance was somewhat out of the ordinary way of his craft, and may, perhaps, prove interesting, as the sketch of an adventurer in whose power it lay to make or mar the fortunes intrusted to him; and also as a specimen of the mode in which the Stock Exchange is sometimes resorted to by bankers with the balances of their customers.

Bred a hosier at Aberdeen, Alexander Fordyce found the North too confined for any extensive operations, and, repairing to London as the only place worthy his genius, obtained employment as clerk to a city banking-house. Here he displayed great facility for figures, with great attention to business, and rose to the post of junior partner in the firm of Roffey, Neale, & James. Scarcely was he thus established, ere he began to speculate in the Alley, and generally with marked good fortune.

“The Devil tempts young sinners with success”;—

and Mr. Fordyce, thinking his luck would be perpetual, ventured for sums which involved his own character and his partners’ fortune. The game was with him; the funds were constantly on the rise; and, fortunate as daring, he was enabled to purchase a large estate, to support a grand appearance, to surpass nabobs in extravagance, and parvenus in folly. He marked the “marble with his name” upon a church which he ostentatiously built. His ambition vied with his extravagance, and his extravagance kept pace with his ambition. The Aberdeen hosier spent thousands in attempting to become a senator, and openly avowed his hope of dying a peer. He married a woman of title; made a fine settlement on her Ladyship; purchased estates in Scotland at a fancy value; built a hospital; and founded charities in the place of which he hoped to become the representative. But a change came over his fortunes. Some political events first shook him. A sensible blow was given to his career by the affair of Falkland Island;[2] and he had recourse to his partners’ private funds to supply his deficiencies. Like many, who are tempted to appropriate the property of others, he trusted to replace it by some lucky stroke of good fortune, and redoubled his speculations on the Stock Exchange. Reports reached his partners, who grew alarmed. They had witnessed and partaken of his good fortune, and they had rejoiced in the far ken which had obtained the services of so clever a person; but when they saw that the chances were going against him, they remonstrated with all the energy of men whose fortunes hang on the success of their remonstrances. A cool and insolent contempt for their opinion, coupled with the remark, that he was quite disposed to leave them to manage a concern to which they were utterly incompetent, startled them; and when, with a cunning which provided for every thing, an enormous amount of bank-notes, which Fordyce had borrowed for the purpose, was shown them, their faith in his genius returned with the possession of the magic paper; and it is doubtful whether the plausibility of his manner or the rustle of the notes decided them.

But ill-fortune continued to pursue Mr. Fordyce. His combinations were as fine, his plans as skilful, as ever. His mind was as perceptive as when he first began; but unexpected facts upset his theories, and the price of the funds would not yield to his combinations. Every one said he deserved to win; but he still continued to lose. Speculation succeeded speculation; and it is remarkable, that, with all his great and continued losses, he retained to the last hour a cool and calm self-possession. After availing himself of every possible resource, his partners were surprised by his absenting himself from the banking-house. This, with other causes, occasioned an immediate stoppage, and a bankruptcy which spread far and wide. But Mr. Fordyce was not absent long. He returned at the risk of his life; the public feeling being so violent that it was necessary to guard him from the populace while he detailed a tissue of unsurpassed fraud and folly. He manfully took the blame upon himself, and exonerated his partners from all, save an undeserved confidence.

It need hardly be added, that the assistance earnestly begged by Mr. Fordyce of the Bank of England was refused. Whatever impression might be entertained by others of his house, the corporation to which he applied was equally aware of his speculative propensities, as of the sphere in which he indulged them; and they refused assistance, upon a well-founded principle, to the man who employed his customers’ capital and his own energies in incessant speculations on the Stock Exchange. Fordyce, however, only advanced the crash. The Scotch bankers were the cause; and the Bank of England saw the necessity of stopping the dangerous game commenced by the Bank of Ayr. The failures continued in the commercial world. He broke half the people in town. Glyn and Halifax were gazetted as bankrupts;[3] Drummonds were only saved by General Smith, a nabob,—the original of Foot’s Sir Matthew Mite,—supporting their house with £150,000. Two gentlemen, ruined by the extravagance of the city banker, shot themselves. Throughout London the panic, equal to any thing of a later date, but of shorter duration, spread with the velocity of wildfire, and part of the press attributed to the Bank the merit of supporting the credit of the city, while part assert that it caused the panic. The first families were in tears; nor is the consternation surprising, when it is known that bills to the amount of four millions were in circulation, with the name of Fordyce attached to them.

The attempts of the speculating banker to procure assistance were earnest and incessant. Among those to whom Mr. Fordyce went was a shrewd Quaker. “Friend Fordyce,” was the reply of the latter, “I have known many men ruined by two dice, but I will not be ruined by Four-dice.”

In 1774, the number of Hebrew brokers was limited to twelve; and the privilege was always purchased by a liberal gratuity to the Lord Mayor. During this year, the mayoralty of Wilks, one of the privileged being at the point of death, Wilks, with characteristic boldness, openly calculated on the advantage to be attained, and was very particular in his inquiries after the sick man. The rumor, that Wilks had openly expressed a wish for the death of the Hebrew, was spread by the wags of ’Change Alley, and the son of the broker sought his Lordship to reproach him with his cupidity. “My dear fellow,” replied Wilks, with the readiness peculiar to him, “you are greatly in error. I would sooner have seen all the Jew brokers dead than your father.”