Chronicles and characters of the stock exchange

by of the Bank of England John Francis

Few trials, which were not for life, have excited so much interest in the city, as that in which Benjamin Walsh—a member of the senate, a member of the Stock Exchange, and a confessed felon—stood at the bar of the Old Bailey, on the charge of defrauding Sir Thomas Plomer. The bench was crowded with the rank and respectability of the city. The melancholy appearance of the prisoner, his grave bearing, and dejected countenance, excited the interest of the spectators, and spoke the regret of the culprit.

In 1811, Sir Thomas informed his broker, Mr. Benjamin Walsh, M. P., that, having bought an estate, it would be necessary to sell out a large amount of stock to complete the purchase. Mr. Walsh advised Sir Thomas not to sell directly, as there was every prospect of the funds rising; and, the title of the estate not being complete, this advice was complied with. About the middle of November, however, Mr. Walsh changed his opinion, and repeatedly urged Sir Thomas to sell his stock, alleging his belief that the price would fall. Again the broker’s suggestion was complied with; but, as it was sold before the money was required for the estate, it was recommended by the prisoner that, to prevent it from lying idle, exchequer-bills should be purchased with the proceeds. Sir Thomas again consented, and gave a check amounting to £22,000 to Mr. Walsh, who promised to lodge the notes at Goslings’, the bankers to Sir Thomas, and hand the latter their receipt. In the evening, however, he presented their acknowledgment for only £6,000, and making some excuse for not having paid in the remaining exchequer-bills, promised to deliver them on the following day; adding that, as he had not settled for them, he had repaid the difference to the account of Sir Thomas. The latter, on his way home, called at his bankers’, and found that, though the £6,000 in exchequer-bills had been deposited, the check of Mr. Walsh for the £16,000 had been received too late for presentation. No suspicion was, however, attached to the transaction until next day, when the check was refused payment. Sir Thomas was immediately informed, and an inquiry instituted. It was soon found that the money thus iniquitously gained, had been disposed of in paying his brother £1,000, in purchasing £11,000 American stock, and in investing £500 in Portuguese doubloons. The prisoner was found guilty; but certain points, reserved for the judges, being interpreted favorably, he was discharged from Newgate, and expelled from the House of Commons.

In 1813, Mr. Vansittart introduced a modification of Mr. Pitt’s sinking fund; and, among other objects, proposed to rescind the alterations of 1786 and 1792, and to restore them to the position in which they would have stood if no such alteration had taken place. By this Mr. Vansittart designed to provide that relief which the public would have obtained from the original plan, to restrain the excessive increase of the sinking fund, and to secure the redemption of each loan within a period of forty-five years from its commencement. For these purposes it was proposed,—

1st. That, as a sum equal to the debt of 1786, bearing an interest nearly equal to the interest of that debt, is now vested in the hands of the commissioners, so soon as the interest of the redeemed debt shall be equal to that of the debt of 1786, that debt shall be declared discharged; and the sums hitherto appropriated for the interest and sinking fund shall be appropriated to bear the charge of future wars; and that no new taxes shall be imposed for new loans till the same amount to a sum equal to the interest of that released.

2d. That, as loans to the extent of £86,796,375 were charged on the consolidated fund in 1802, without any sinking fund attached to them, it is proposed, in order to place the public creditors in a position equal to that they held in 1792, that the one per cent. sinking fund on the above sums be replaced to it.

3d. That, as the amount of exchequer-bills has much increased, a sinking fund of one per cent. shall be annually provided for any addition to the exchequer-bills in circulation, for the discharge of which no funds are provided.

4th. That, instead of allotting the sinking fund of one per cent. to discharge each separate loan, the whole funds shall be united, and applied to discharge the first contracted loan; and that each successive loan shall be redeemed, and its charge released, in the order of its contraction, by the united produce of the sinking funds appropriated for the redemption of the loans contracted since 1792; but the whole sinking fund created by the act of 1786 to be continued, and applied until the total redemption of the debt.

During the latter part of Bonaparte’s career, the price of the funds varied enormously. In the course of an hour, a difference of eight and ten per cent. was not unknown. The loans were as eagerly sought as they were frequently made; nor is this surprising, when it is remembered that eighteen and twenty per cent. occasionally rewarded the scrip-holder.

The pulse of the people was feverish, and easily excited; and the papers of the day display the intense anxiety which hung over the public mind during the eventful years of 1814 and 1815. The prices of the funds dropped and rose like a barometer. It is scarcely an exaggeration to say, that they were regarded as an oracle; and, while the public professed to disbelieve all Stock Exchange rumors, simply because they were so, they continued to inquire the variations in the price, and almost regarded them as a cause rather than a consequence. The annals of the world contain no more exciting period. For years, the English had seen battle after battle won by the great conqueror. They had seen disciplined armies vanquished by raw levies; veteran troops cut to pieces by young conscripts; and the prestige of his name had haunted them for the fourth part of a century. To destroy his power, they had submitted to painful privations; they had borne with taxation which almost amounted to tyranny; they had levied loans which enriched the few and impoverished the many.

The national debt had increased to 800 millions; and now the reward had come, and the people read with undisguised and unlimited pleasure, of field after field yielding to British prowess; of towns stormed; of achievements which made them proud of the name they bore; until that prophecy, which had been derided for years, became a lasting fact; British troops paraded in triumph through the streets of Paris; and men felt that their sufferings and their sorrows had not been vain, but that the treasure they had lavished had reaped its reward.