At this period the broker had a walk upon the Royal Exchange devoted to the funds of the East India and other great corporations; and many of the terms now in vogue among the initiated arose from their dealings with the stock of the East India Company. Jobbing in the great chartered corporations was thoroughly understood. Reports and rumors were as plentiful then as now. No sooner was it known that one of the fine vessels of the India Company, laden with gold and jewels from the East, was on its way, than every method was had recourse to. Men were employed to whisper of hurricanes which had sunk the well-stored ship; of quicksands which had swallowed her up; of war which had commenced when peace was unbroken; or of peace being concluded when the factories were in the utmost danger. Nor were the brains of the speculators less capable than now. If at the present day a banker condescends to raise a railway bubble 50 per cent., the broker of that day understood his craft sufficiently to cause a variation in the price of East India Stock of 263 per cent.; and complaints became frequent that the Royal Exchange was perverted from its legitimate purpose, and that the jobbers—the term was applied ignominiously—ought to be driven from a spot polluted by their presence. Mines of gold, silver, and copper were so temptingly promised, that the entire town pursued the deception. Tricks and stratagems were plentiful; the wary made fortunes, and the unwary were ruined.
In 1698, the dealers and jobbers in the funds and share market, annoyed by the objections made to their remaining in the Royal Exchange, and finding their numbers seriously increase, deemed it advisable to go to ’Change Alley, as a large and unoccupied space, where they might carry on their extensive operations.
“The centre of jobbing is in the kingdom of ’Change Alley and its adjacencies,” said a pamphleteer a few years after. “The limits are easily surrounded in about a minute and a half. Stepping out of Jonathan’s into the Alley, you turn your face full south; moving on a few paces, and then turning due east, you advance to Garraway’s; from thence, going out at the other door, you go on still east into Birchin Lane; and then, halting a little at the sword-blade bank, you immediately face to the north, enter Cornhill, visit two or three petty provinces there on your way to the west; and thus, having boxed your compass, and sailed round the stock-jobbing globe, you turn into Jonathan’s again.”
The English funds were assuming a greatness they have ever since maintained. The Hebrew capitalist, who came over with William, had increased the importance of the jobbers by joining them. The English merchant—even at this early period—found that money might be gained in the new operation; and ’Change Alley, so well known in Parliamentary debates and the correspondence of the time as “the Alley,” was for a century the centre of all dealings in the funds. Here assembled the sharper and the saint; here jostled one another the Jew and the Gentile; here met the courtier and the citizen; here the calmness of the gainer contrasted with the despair of the loser; and here might be seen the carriage of some minister, into which the head of his broker was anxiously stretched to gain the intelligence which was to raise or depress the market. In one corner might be witnessed the anxious, eager countenance of the occasional gambler, in strong contrast with the calm, cool demeanor of the man whose trade it was to deceive. In another the Hebrew measured his craft with that of the Quaker, and scarcely came off victorious in the contest; while in one place, appropriated to him, stood the founder of hospitals, impressing with eagerness upon his companion the bargain he was about to make in seamen’s tickets.
It was soon felt practically that the air of England is cold and its climate variable. The more respectable among the jobbers, therefore, gathered beneath the walls of one of those coffee-houses which formed so marked a feature of London life in the eighteenth century, until the chance became a customary visit, and the coffee-house known as Jonathan’s became the regular rendezvous of all the dealers in stock, and consequently the scene of transactions as extensive as any the world ever witnessed.
In 1701, the character of those who met in ’Change Alley was not very enviable. It was said, and said truly, that they undermined, impoverished, and destroyed all with whom they came in contact. “They can ruin men silently,” says a writer of the period, with great vehemence; “undermine and impoverish, fiddle them out of their money, by the strange, unheard-of engines of interest, discount, transfers, tallies, debentures, shares, projects, and the devil and all of figures and hard names.”
Every thing which could inflate the hopes of the schemer was brought into operation by the brokers. If shares were dull, they jobbed in the funds, or tried exchequer bills; and if these failed, rather than remain idle, they dealt in bank-notes at 40 per cent. discount. These new modes of gambling seized upon the town with a violence which sober citizens could scarcely understand. Their first impulse was to laugh at the stories currently circulated of fortunes lost and won; but when they saw men who were yesterday threadbare pass them to-day in their carriages,—when they saw wealth, which it took their plodding industry years of patient labor to acquire, won by others in a few weeks,—unable to resist the temptation, the greatest of the city merchants deserted their regular vocations and speculated in the newly-produced stocks. “The poor English nation,” says a writer, “run a madding after new inventions, whims, and projects; and this unhappy ingredient my dear countrymen have in their temper,—they are violent, and prosecute their projects eagerly.”
No sooner had the members of the jobbing community taken their quarter in ’Change Alley, than the city of London was seized with alarm, and tried to keep the brokers at the Royal Exchange. They grew indignant at their deserting so time-honored a place, and bound them in pains and penalties not to appear in ’Change Alley. Pocket, however, triumphed over prerogative; brokers resorted where bargains were plentiful; ’Change Alley grew famous throughout England; but it was not till nearly a century and a quarter after its first transaction, and a quarter of a century after ’Change Alley ceased to exist as a sphere for the stock-jobbers, that the ancient and useless provision not to assemble in ’Change Alley was expunged from the broker’s bond.
Among those who employed their great fortunes in the manner alluded to was Sir Henry Furnese, a Director of the Bank of England. Throughout Holland, Flanders, France, and Germany, he maintained a complete and perfect train of intelligence. The news of the many battles fought at this period was received first by him, and the fall of Namur added to his profits, owing to his early intelligence. On another occasion he was presented by William with a diamond ring, as a reward for some important information, and as a testimony of this monarch’s esteem. But the temptation to deceive was too great, even for this gentleman. He fabricated news; he insinuated false intelligence; he was the originator of some of those plans which at a later period were managed with so much effect by Rothschild. If Sir Henry wished to buy, his brokers were ordered to look gloomy and mysterious, hint at important news, and after a time sell. His movements were closely watched; the contagion would spread; the speculators grew alarmed; prices be lowered 4 or 5 per cent.,—for in those days the loss of a battle might be the loss of a crown,—and Sir Henry Furnese would reap the benefit by employing different brokers to purchase as much as possible at the reduced price. Large profits were thus made; but a demoralizing spirit was spread throughout the Stock Exchange. Bankrupts and beggars sought the same pleasure in which the millionnaire indulged, and often with similar success.
The wealthy Hebrew, Medina, accompanied Marlborough in all his campaigns; administered to the avarice of the great captain by an annuity of six thousand pounds per annum; repaid himself by expresses containing intelligence of those great battles which fire the English blood to hear them named; and Ramilies, Oudenarde, and Blenheim administered as much to the purse of the Hebrew as they did to the glory of England.