Old and New London, Volume I / A Narrative of Its History, Its People, and Its Places

by Walter Thornbury

If a member makes any bargains before or after the regular business hours—ten to four—the bargain is not recognised by the committee. No bonds can be returned as imperfect after three days' detention. If a member comes to private terms with his creditors, he is put upon the black board of the Exchange as a defaulter, and expelled. A further failure can be condoned for, after six months' exile, provided the member pays at least one-third of any loss that may have occurred on his speculations. For dishonourable conduct the committee can also chalk up a member's name.

It is said that a member of the Stock Exchange who fails and gives up his last farthing to his creditors is never thought as well of as the man who takes care to keep a reserve, in order to step back again into business. For instance, a stockbroker once lost on one account £10,000, and paid the whole without a murmur. Being, however, what is called on the Stock Exchange "a little man," he never again recovered his credit, it being suspected that his back was irretrievably broken.

But a still more striking and very interesting illustration of the estimation in which sterling integrity is held among a large proportion of the members was afforded (says Mr. Grant) in the case of the late Mr. L.A. de la Chaumette, a gentleman of foreign extraction. He had previously been in the Manchester trade, but had been unfortunate. Being a man much respected, and extensively known, his friends advised him to go on the Stock Exchange. He adopted their advice, and became a member. He at once established an excellent business as a broker. Not only did he make large sums, in the shape of commissions on the transactions in which he was employed by others, but one of the largest mercantile houses in London, having the highest possible opinion of his judgment and integrity, entrusted him with the sole disposal of an immense sum of money belonging to the French refugees, which was in their hands at the time. He contrived to employ this money so advantageously, both to his constituents and himself, that he acquired a handsome fortune. Before he had been a member three years, he invited his creditors to dine with him on a particular day at the London Tavern, but concealed from them the particular object he had in view in so doing. On entering the room, they severally found their own names on the different plates, which were reversed, and on turning them up, each found a cheque for the amount due to him, with interest. The entire sum which Mr. L.A. de la Chaumette paid away on this occasion, and in this manner, was upwards of £30,000. Next day, he went into the house as usual, and such was the feeling entertained of his conduct, that many members refused to do a bargain with him to the extent of a single thousand. They looked on his payment of the claims of his former creditors as a foolish affair, and fancied that he might have exhausted his resources, never dreaming that, even if he had, a man of such honourable feeling and upright principle was worthy of credit to any amount. He eventually died worth upwards of £500,000.

The locality of the Stock Exchange (says the author of "The Great Babylon," probably the Rev. Dr. Croly) is well chosen, being at a point where intelligence from the Bank of England, the Royal Exchange, and the different coffee-houses where private letters from abroad are received, may be obtained in a few minutes, and thus "news from all nations" may be very speedily manufactured with an air of authenticity. One wide portal gapes toward the Bank, in Bartholomew Lane; and there is a sally-port into Threadneedle Street, for those who do not wish to be seen entering or emerging the other way. From the dull and dingy aspect of these approaches, which, it seems, cannot be whitened, one could form no guess at the mighty deeds of the place; and when the hourly quotations of the price of stocks are the same, the place is silent, and only a few individuals, with faces which grin but cannot smile, are seen crawling in and out, or standing yawning in the court, with their hands in their breeches' pockets. If, however, the quotations fluctuate, and the Royal Exchange, where most of the leading men of the money market lounge, be full of bustling and rumours, and especially if characters, with eyes like basilisks, and faces lined and surfaced like an asparagus bed ere the plants come up, be ever and anon darting in at the north door of the Royal Exchange, bounding toward the chief priests of Mammon, like pith balls to the conductor of an electric machine, and, when they have "got their charge," bounding away again, then you may be sure that the Stock Exchange is worth seeing, if it could be seen with comfort, or even with safety. At those times, however, a stranger might as well jump into a den of lions, or throw himself into the midst of a herd of famishing wolves.

Among the various plans adopted for securing early intelligence for Stock Exchange purposes before the invention of the telegraph, none proved more successful than that of "pigeon expresses." Till about the beginning of the century the ordinary courier brought the news from the Continent; and it was only the Rothschilds, and one or two other important firms, that "ran" intelligence, in anticipation of the regular French mail. However, many years ago, the project was conceived of establishing a communication between London and Paris by means of pigeons, and in the course of two years it was in complete operation. The training of the birds took considerable time before they could be relied on; and the relays and organisation required to perfect the scheme not only involved a vast expenditure of time, but also of money. In the first place, to make the communication of use on both sides of the Channel, it was necessary to get two distinct establishments for the flight of the pigeons—one in England and another in France. It was then necessary that persons in whom reliance could be placed should be stationed in the two capitals, to be in readiness to receive or dispatch the birds that might bring or carry the intelligence, and make it available for the parties interested. Hence it became almost evident that one speculator, without he was a very wealthy man, could not hope to support a pigeon "express." The consequence was, that, the project being mooted, two or three of the speculators, including brokers of the house, themselves joined, and worked it for their own benefit. Through this medium several of the dealers rapidly made large sums of money; but the trade became less profitable, because the success of the first operators induced others to follow the example of establishing this species of communication. The cost of keeping a "pigeon express" has been estimated at £600 or £700 a year; but whether this amount was magnified, with the view of deterring others from venturing into the speculation, is a question which never seems to have been properly explained. It is stated that the daily papers availed themselves of the news brought by these "expresses;" but, in consideration of allowing the speculators to read the despatches first, the proprietors, it is said, bore but a minimum proportion of the expense. The birds generally used were of the Antwerp breed, strong in the wing, and fully feathered. The months in which they were chiefly worked were the latter end of May, June, July, August, and the beginning of September; and, though the news might not be always of importance, a communication was generally kept up daily between London and Paris in this manner.

In 1837-38-39, and 1840, a great deal of money was made by the "pigeon men," as the speculators supposed to have possession of such intelligence were familiarly termed; and their appearance in the market was always indicative of a rise or fall, according to the tendency of their operations. Having the first chance of buying or selling, they, of course, had the market for a while in their own hands; but as time progressed, and it was found that the papers, by their "second editions," would communicate the news, the general brokers refused to do business till the papers reached the City. The pigeons bringing the news occasionally got shot on their passage; but, as a flock of some eight or a dozen were usually started at a time, miscarriage was not of frequent occurrence. At the time of the death of Mr. Rothschild, one was caught at Brighton, having been disabled by a gun-shot wound, and beneath the shoulder-feathers of the left wing was discovered a small note, with the words "Il est mort," followed by a number of hieroglyphics. Each pigeon had a method of communication entirely their own; and the conductors, if they fancied the key to it was in another person's power, immediately varied it. A case of this description occurred worth noting. The parties interested in the scheme fancied that, however soon they received intelligence, there were others in the market who were quite equal with them. In order to arrive at the real state of affairs, the chief proprietor consented, at the advice of a friend, to pay £10 for the early perusal of a supposed rival's "pigeon express." The "express" came to hand, he read it, and was not a little surprised to find that he was in reality paying for the perusal of his own news! The truth soon came out. Somebody had bribed the keepers of his pigeons, who were thus not only making a profit by the sale of his intelligence, but also on the speculations they in consequence conducted. The defect was soon remedied by changing the style of characters employed, and all went right as before.

When a defalcation takes place in the Stock Exchange (says a City writer of 1845), the course pursued is as follows:—At the commencement of the "settling day," should a broker or jobber—the one through the default of his principals, and the other in consequence of unsuccessful speculations—find a heavy balance on the wrong side of his accounts, which he is unfortunately unable to settle, and should an attempt to get the assistance from friends prove unavailing, he must fail. Excluded from the house, the scene of his past labours and speculations, he dispatches a short but unimportant communication to the committee of the Stock Exchange. The other members of the institution being all assembled in the market, busied in arranging and settling their accounts, some of them, interested parties, become nervous and fidgety at the non-appearance of Mr. —— (the defaulter in question). The doubt is soon explained, for the porter stationed at the door suddenly gives three loud and distinctly repeated knocks with a mallet, and announces that Mr. —— presents his respects to the house, and regrets to state that he is unable to comply with his "bargains"—Anglicè, to fulfil his engagements.

Visit Bartholomew Lane at any time of the year, says a City writer, and you will be sure to find several people of shabby exterior holding converse at the entrance of Capel Court, or on the steps of the auction mart. These are the "Alley men." You will see one, perhaps, take from his pocket a good-sized parcel of dirty-backed letters, all arranged, and tied round with string or red tape, which he sorts with as much care and attention as if they were bank-notes. That parcel is his stock-in-trade. Perhaps those letters may contain the allotment of shares in various companies, to an amount, if the capital subscribed was paid, of many hundreds of thousands of pounds.

To describe fairly the "Alley man," we must take him from the first of his career. He is generally some broken-down clerk or tradesman, who, having lost every prospect of life, chooses this description of business as a dernier ressort. First started in his calling, he associates with the loiterers at the Stock Exchange, where, by mixing with them, and perhaps making the acquaintance through the introduction of Sir John Barleycorn, at the tap of a tavern, he is initiated by degrees into the secrets of the business, and, perhaps, before long, becomes as great an adept in the sale or purchase of letters as the oldest man on the walk. When he has acquired the necessary information respecting dealing, he can commence letter-writing for shares. This is effected at the expense of a penny only for postage, pen and ink being always attainable, either in the tavern-parlour or coffee-house he frequents. When a new company comes out, and is advertised, he immediately calls for a form of application, fills it up, and dispatches it, with the moderate request to be allotted one hundred or two hundred shares, the amount of call or share being quite immaterial to him, as he never intends to pay upon or keep them, his only aim being to increase his available stock of letters, so that he can make a "deal," and pocket the profit, should they have a price among the fraternity.