We invariably find that the success, whether real or pretended, of any one scheme, gives rise to a host of imitations. If any new company, whatever be its object, is started, and the shares are selling at a premium, we may look with perfect confidence for the announcement of six or seven others before as many days have elapsed. This is, of course, partly owing to the cupidity of the public; but that cupidity could not manifest itself so soon in a tangible form, but for the machinations of certain parties, who see their way to a profit whatever may be the result of the speculation. Amidst the ruin and desolation which invariably follow those seasons of infuriated and infatuated gambling, to which we are now almost habituated, such men preserve a tranquil and a calm demeanour. And no wonder: they have reaped the harvest which the folly of others has sown. At the hottest and most exciting period of the game, they have their senses as completely under control as the sharper who has deliberately dined on chicken and lemonade, with the prospect of encountering afterwards an inebriated victim at Crockford's. They may play largely, but they only do so while their hand is safe; the moment luck changes, they sell out, and leave the whole loss to be borne by the unfortunate dupes, who, believing in their deliberate falsehoods, still continue to hold on, trusting to the advent of those fabulous better times which, in their case, never can arrive. It has been so in our own times, and it was so when the South Sea bubble was expanding on its visionary basis. Multitudes of minor schemes were projected, subscribed for, and driven up to an exorbitant premium. The shares of really solid companies participated in the rise, and mounted correspondingly in the market. The nominal value of all the sorts of stock then afloat was computed at no less than five hundred millions; being exactly double the estimated value of the whole lands, houses, and real property in the kingdom!
The collapse came, and brought ruin to thousands who thought that they held fortune within their grasp. The history of the downfall is not less suggestive than that of the rapid rise. It has had its parallel in our days, when the most rotten and unsubstantial of companies have brazened out their frauds to the last, doctored accounts, declared fictitious dividends, and threatened with legal prosecution those who had the courage and the honesty to expose them.
"The minor bubbles burst first, when the South Sea schemers were foolish enough to apply for a scire facias against their projectors, on the ground that their schemes injured the credit of the grand scheme. This turned quondam allies into furious enemies. The scire facias was issued on 13th August 1720, when the downfall began; and Mr Hutchison saw his predictions completely fulfilled. The South Sea villains, in sheer desperation, declared a half-yearly dividend of thirty per cent due at Christmas, and offered to guarantee fifty per cent per annum for twelve years! They might as well have declared it for the thirtieth of February. Everything was done to prop the reputation of the directors, but all was in vain; and when the stock fell at last to one hundred and seventy-five, a panic ensued, and all went to the ground together, totally ruining thousands, and nearly dragging the Bank and East India Company along with it."
Mr Francis gives us some interesting anecdotes of the casualties arising from this gigantic scheme of imposture. Gay, the author of the Beggar's Opera, was a holder of stock, and at one time might have sold out with a profit of twenty thousand pounds—an opportunity very rarely vouchsafed to a poet. In spite of shrewd advice, he neglected his chance, and lost every penny. One Hudson, a native of Yorkshire, who had succeeded to a large fortune, went deeply into the scheme. From a millionnaire he became a beggar and insane, and wandered through the streets of London a pitiable object of charity. But it would be work, of supererogation to multiply instances of similar calamity. They are reproduced over and over again at the conclusion of every fit of wild and reckless speculation; and yet the warning, terrible as it is, seems to have no effect in restraining the morbid appetite.
It would, we apprehend, be impossible to find any one who will advocate gambling upon principle; though a multitude of excellent persons, who would shrink with horror were the odious epithet applied to them, are, nevertheless, as much gamblers as if they were staking their money at rouge-et-noir or roulette. The man who buys into a public stock with the intention of selling in a week or a fortnight, in the expectation of doing so at an advanced price, or the other who sells shares which he does not possess, in the confident belief of a speedy fall, is, in everything save decency of appearance, on a par with the haunter of the casino. He may, if he so pleases, designate himself an investor, but, in reality, he is a common gamester. This may be a hard truth, but it is a wholesome one, and it cannot be too often repeated, at a time when general usage, and yielding to temptation, have perverted words from their ordinary significance, and led many of us to justify transactions which, when tried by the standard of morality, and stripped of their disguise, ought to be unhesitatingly condemned. "He that loveth gold shall not be justified," said the son of Sirach. "Many have sinned for a small matter; and he that seeketh for abundance will turn his eyes away. As a nail sticketh fast between the joinings of the stones, so doth sin stick close between buying and selling." This spirit, when it becomes general in the nation, cannot be otherwise than most hurtful to its welfare, since it diverts the thoughts of many from those industrial pursuits which are profitable to themselves and others, and leads them astray from that honourable and upright course which is the sure and only road to wealth, happiness, and esteem. This has been, to a certain extent, acknowledged by government, even within our own time. The pernicious effect of the lotteries, originally, a state device, upon the morals and condition of the lower classes, as testified by the vast increase of crime, became at length so glaring, that these detestable engines of fraud were suppressed by act of parliament. They still linger on the Continent, as most of us have reason to know from the annual receipt of documents, copiously circulated by the Jews of Hamburg and Frankfort, offering us, in exchange for a few florins, the chance of becoming proprietors of several chateaux on the Rhine, with boar-forests, mineral springs, vineyards, and other appurtenances. We presume, from the continuity of the circulars, that Israel still finds its dupes; but we never happened, save in one of Charles Lever's novels, to hear of any person lucky enough to stumble on the ticket which secured the right to Henkersberg, Bettlersbad, or Narrenstein. The extent to which lottery gambling was carried in this country seems to us absolutely incredible. Derby sweeps were nothing to it.
"In 1772," says Mr Francis, "lottery magazine proprietors, lottery tailors, lottery staymakers, lottery glovers, lottery hatmakers, lottery tea merchants, lottery barbers—where a man, for being shaved and paying threepence, stood a chance of receiving £10; lottery shoeblacks, lottery eating-houses—where, for sixpence, a plate of meat and the chance of 60 guineas were given; lottery oyster-stalls—where threepence gave a supply of oysters, and a remote chance of five guineas, were plentiful; and, to complete a catalogue which speaks volumes, at a sausage-stall, in a narrow alley, was the important intimation written up, that, for one farthing's worth of sausages, the fortunate purchaser might realise a capital of five shillings. Quack doctors, a class which formed so peculiar a feature in village life of old, sold medicine at a high price, giving those who purchased it tickets in a lottery purporting to contain silver and other valuable prizes."
A new discovery was presently made, which had a serious effect upon trade. Money-prizes were discontinued, and shopkeepers, parcelling out their goods, disposed of them by lottery. As a matter of course, this business, commenced by disreputable adventurers, proved most injurious to the regular dealer. People refused to buy an article at the regular price, when it might be obtained for next to nothing. They were, however, utterly wrong, for the staple of the prize goods, when inspected, proved to be of the most flimsy description. Tickets in the state lotteries became the subject of pawn, and were so received by the brokers, and even by the bankers. Suicide was rife; forgery grew common; theft increased enormously. Husbands and fathers saw their wives and children reduced to absolute starvation, and weeping bitterly for bread, and yet pawned their last articles of household furniture for one more desperate chance in the lottery. Wives betrayed their husbands, and plundered them, for the same purpose. Servants robbed their masters; commissions and offices were sold. Insurance was resorted to, to accommodate all classes. Those who had not money to pay for tickets might insure a certain number for a small sum, and thus obtain a prize; and so lottery grew upon lottery, and the sphere was indefinitely extended. It was not until 1826 that this abominable system, was finally crushed. The image of the vans, placards, and handbills of Bish is still fresh in our memory; and we pray devoutly that succeeding generations may never behold a similar spectacle.
It would be in vain for us, within the limits of an article, to attempt even the faintest sketch of the speculative manias which, from time to time, have affected the prosperity of Great Britain. Some of these have been quite, as baseless as the South Sea bubble, and may be directly traced to the agency and instigation of the Stock Exchange. Others were founded upon schemes of manifest advantage to the public, and even to the proprietary, if cautiously and wisely carried out; but here again the passion for gambling has been insanely developed, and encouraged by those who sought to make fortunes at the expense of their dupes. There is at all times, in this country, a vast deal of unemployed capital, which, in the cant phrase, "is waiting for investment," and which cannot well be invested in any of the ordinary channels of business. The fact is, that within the area of Britain, it has been long difficult for a capitalist to select a proper field of operation; and the tendency of recent legislation has materially increased the difficulty. The country, in fact, may be considered as entirely made. Agricultural improvement, on a large scale, which implied the possession of a tract of unprofitable country, was considered, even before the repeal of the corn laws, as no hopeful speculation. Since that disastrous event, the chances have naturally diminished; and we suspect that, by this time, very few people have any faith in Sir Robert Peel's proposal for establishing new colonies in Connaught. When we find the Whig Lord Monteagle denouncing free trade as the bane of Ireland, we may be sure that few capitalists will sink their funds in the western bogs, hoping that they may appear again in the shape of golden grain which may defy the competition of the fertile valleys of America. We have quite enough of factories for all the demand which is likely to come for years: instead of building new ones, it is always easy, if any one has a fancy for it, to purchase abandoned mills at a very considerable discount; but we do not find such stock eagerly demanded in the market. Foreign competition has extinguished several branches of industry to which capital might be profitably applied, and materially injured others; so that moneyed men really are at a loss for eligible investment. This want has been felt for a long time; and the uncertain policy of our ministers, with regard to colonial affairs, has undoubtedly had an injurious effect upon the prosperity of these dependencies. We have annihilated much of the capital invested in the West Indies, and have withdrawn a great deal more. It is long since Adam Smith urged the propriety and the policy of identifying some of our more important colonies with Great Britain, by the simple process of incorporation, thus extending materially the field of the capitalist upon security equal to that which he can always command at home. Such an opportunity is at this moment afforded by Canada; but it seems that we will rather run the risk of seeing Canada merge in the United States than make any sacrifice of our pride, even where our interest is concerned. A considerable deal of capital has gone to Australia; but we suspect, from late events, that the future supply will be limited.
Before the railways opened to capitalists a channel of investment which appeared exceedingly plausible, and which was, in a great measure, guaranteed by the result of experiment, vast masses of realised wealth accumulated from time to time. Upon these hoards the members, myrmidons, and jobbers of the Stock Exchange, cast a covetous eye: they whispered to each other, in the language of King John—
"Let them shake the bags
Of hoarding abbots; angels imprisoned
Set thou at liberty: the fat ribs of peace
Must by the hungry now be fed upon:
Use our commission in its utmost force."