Chronicles and characters of the stock exchange

by of the Bank of England John Francis

“It is the nature of colonies, as of children, at a certain period in their history, to cease to be dependent upon their parents. By judicious counsel and control they may be retained, but they must eventually separate; and, with the one as with the other, the future influence of the parent depends upon that parent’s behaviour during the nonage of the child.” Such was the opinion of William Pitt, first Earl of Chatham; and it is to be lamented that the behaviour of England to her American children was not likely to be remembered with kindness, when the tie was violently broken. The story of that disastrous war, when men of the same ancestry and the same habits were arrayed in hostility, when they who spake the same tongue spake it only in unkindness, is pitiable and humiliating. From the time when the inhabitants of Boston refused to be taxed, to the signing of the treaty with the young republic on terms of equality, the measures adopted were as severe as they were injudicious; and to the obstinacy of George III. may be traced the cause and the continuation of the contest, and the increase of the national debt. The first blow was struck at Boston. On the evening of December 16th, 1773, a number of citizens, disguised as Mohawk Indians, boarded the vessels containing the tea which they would not allow to be taxed, and discharged it into the water, while other cargoes were not only refused a landing, but were sent back with contempt.

When the news reached London, various restraining measures were passed. The place which had witnessed the outrage was declared closed for all exports and imports; and though the bold stand of the provincials astonished the mother country, it was supposed to be but temporary. It was soon found, however, that Boston was not alone; other provinces joined; and British America called a general congress. Magazines were formed; ammunition was provided; plans were drawn up for the defence of the country; and a large body enrolled, termed minute-men, engaged to turn out at a minute’s notice. Every contingency was prepared for; and an aspect called rebellious by the mother country was boldly presented. The first blood was shed at Lexington, where British soldiers fled before American militia. Emboldened by success, they reduced two forts, took Montreal, and attempted Quebec. Nor was England idle in the struggle. An addition to the land and sea force was voted; loans were raised; reinforcements were ordered to Boston; and the military ardor which had seized the Americans found fuel on which to expend itself.

With fire-arms formed by themselves; with weapons wrought from the plough; with artillery so clumsily fashioned that it burst more often than it discharged; with men who had only the determination to die free rather than live bond,—the American generals beat the veteran troops of England. Her forts were taken, her forces surrounded, her armies destroyed, and her officers made prisoners. The principal powers of Europe looked with delight upon a struggle between the soldiers of the mother country and the raw recruits of the colony; between discipline on the one side and patriotism on the other; on the entire power of England baffled by men from the pen and from the plough, from the shop and from the counting-house. The loans of this disastrous period were most unpopular. The increased taxation which followed was drawn with the utmost difficulty from the pockets of the people.

Political misfortunes and military disasters made the subjugation of America chimerical. Earl Cornwallis surrendered himself and his army as prisoners of war; and when the contest was extended to Europe,—when England stood alone against Holland, France, Spain, and America,—when our navy was defeated,—when the English coast and harbors were insulted, our West India Islands ravaged, and our trade swept away,—the discontents of the country increased, and the debates in the House grew violent and acrimonious. “You sheathe your sword, not in its scabbard, but in the bowels of your countrymen,” said one; and on some unhappy boast of driving the Americans into the sea,—“I might as well,” said Lord Chatham, “think of driving them with my crutch.” The people grumbled at defeat following defeat, at trade crippled, at taxes augmented, and debts enlarged.

Loan succeeded loan; a cry arose about the corruption of contracts; and the feeling of discontent increased so strongly, that the stubborn obstinacy of the king, who said he would sooner lose his right arm than his colonies, was compelled to yield to a unanimous resolution of the Commons, that the House would consider as enemies all those who advised the continuance of the war. Had any other monarch sat upon the throne, the large accumulation of debt would, probably, have been avoided; and England would now be spared the painful task of looking back upon “a nation convulsed by faction; a throne assailed by the fiercest invective; a House of Commons hated and despised; a rival legislature sitting beyond the Atlantic; English blood shed by English bayonets; our armies capitulating; our conquests wrested from us; our enemies hastening to take vengeance upon us for past humiliations; and our flag scarcely able to maintain itself in our own seas.”

Such was the aspect of public affairs during a war which cost thirty-two millions in taxes, and added one hundred and four millions to the national debt.

In 1778, when a loan was proposed, the usual number of applications was delivered from the bankers, merchants, and members of the Stock Exchange. To their surprise the answers were not received so soon as usual; and, as political events were threatening, the applicants grew anxious. The funds fell greatly; and, when the replies came, it was found that the whole of this unfortunate loan was fixed upon them. Had the funds risen, the members and the minister’s friends would have had a good portion; but, as the scrip was sure to be at a discount of three per cent., the whole was divided among those who were either without interest or were opposed to the government. In 1781, on a new loan being proposed, the same houses applied; but as the scrip went to a premium, it was divided with due regard to senatorial interests; and many who had lost on the last loan had no opportunity of retrieving on the present.

Prior to the allotment, one firm was waited on by a stranger, and told, that, if they would add his name to their list, they would be favorably considered. The house declined the proposal, and sent in a tender for two millions; when, to their surprise, they received, with an allotment of £560,000, an intimation that the odd £60,000 was for the gentleman who had waited on them, and of whom they knew nothing.

£240,000 was nominally given to another house; but of this £200,000 was for members whose votes were desirable. Mr. Dent, the head of the house of Child, and a senator, received £500,000, being two thirds of his tender; while Drummonds and other bankers, not members, received only tenths and sixteenths of the sums they requested. Some applicants, without Parliamentary interest, though as good as any in the city, were totally neglected, while “to a number of mendicants,” said Mr. Fox, “obscure persons, and nominal people, were given large amounts.”

The mendicants and obscure people, thus politely alluded to by the great gambler, were the Treasury and Bank clerks, to whom a portion of the loan was usually presented as a compliment for their services.