of the Bank of England John Francis

“ We, a commercial people, brought up at the feet of McCulloch, with the books of the national debt as a constant study, with the interest on the national debt as a constant remembrancer, persist in scoffing at any idea of decreasing the encumbrance; and when a Chancellor of the Exchequer proposes a loan of eight millions, we growl and grumble, call it charitable, trust for better times, and read the opposition papers with renewed zest.
There is no doubt that the resources of the nation are equal to far more than is now imposed ”

“ The spirit of the citizens had long passed away, commerce had sheathed the sword of chivalry, and none grasped the gauntlet for the honour of London. Bankers, brokers, and underwriters gaped at one another aghast; and though the boldness of the speech pleased many, it was far from satisfactory to those who came with the hope of winning a wager, or claiming their assurance money. ”

“ It is absolutely idle for the Financial Reform Association to think of effectually lowering the taxation of the country while twenty-eight millions are paid for interest; and it is to be feared that great evil will accompany whatever good they may achieve. That there are many offices which might be abolished; that it is a rule in England that the least worked should be best paid; that an extravagant system of barbaric grandeur exists; that the army and the navy, the pulpit and the bar, are conducted unwisely; and that great men are paid great salaries for doing nothing,—are indisputable ”

“ The company became a theme of public conversation—the assurance offices rejoiced at the discovery of their rival’s infamy—and those who were insured were rudely startled from their dream of security.
In the mean time, Mr. Mackenzie pressed them closely in Glasgow. He defied them and the damages they sought to obtain. There was no word too bad to give them—no assertion which had its foundation in truth, which he was not bold enough to publish. Actions involving damages to the extent of 20,000l. were brought against him in vain—he was indomitable in determination and invincible in spirit. ”

“ For if the reprisal trade should adjourn from Exchange Alley to Birchin Lane, it may seem to be like the banishing usury from the city of Rome, which transferred it to a Jew at Genoa, a monk at Naples, and a banker at Venice, who, it was said, had no less than seven-and-twenty principalities in Italy mortgaged to them at a time, besides two kingdoms, seven duchies, and the jewels of the crown of France.
Having thus given the blazing characters of three capital sharpers of Great Britain, knaves of lesser magnitude can have no room to shine; the Alley throngs with Jews, jobbers, and brokers ”

“ There are no qualms of conscience in companies; and though a man might try to play upon the easy good nature of his landlord, such tricks would be vain against them. Determined habits of thrift are thus engendered, property becomes more valuable, the landlord receives his rents regularly, and business proceeds like a machine. It [289] may be said that the kindly feeling between landlord and tenant disappears beneath the iron sway of a public company; but however this may be regretted, it is only an inevitable consequence of the changes of capital and the consequent transfer of estates. ”

“ The more pleasing title of Poyais was given; the Stock Exchange was employed to circulate some bonds for a loan of £200,000, at eighty per cent., on the security of the country; and a land renowned for its inhospitable climate was puffed into a most undeserving celebrity. Every device of human ingenuity was practised. Books were published in which the climate of paradise seemed uncongenial by that of Poyais. The air was soft and balmy; the sun and sky were alike fructifying; the soil yearned to yield its fruits; the water ran over sands of gold. Grain was to grow without sowing. ”

“ As an example of the language that is sometimes indulged in, one modern office promises to set apart a portion of its future profits, whether such should amount to thousands or to tens of thousands, to hundreds of thousands or to millions, for the support and future provision of any person in decay who shall have once, for however brief a space of time, held a single share in such company. “To become a shareholder,” says the prospectus, “is as it were to effect at once and for ever a policy of assurance against want.” ”

“ If they meet with a cull, a young dealer that has money to lay out, they catch him at the door, whisper to him, “Sir, here is a great piece of news, it is not yet public, it is worth a thousand guineas but to mention it; I am heartily glad I met you, but it must be as secret as the black side of your soul, for they know nothing of it yet in the coffee-house; if they should, stock would rise ten per cent. in a moment, and I warrant you South Sea will be 130 in a week’s time after it is known.” ”

“ Audley, like many of our own day, was equally ready to lend money to the gay gallants of the town on annuities, as he was to receive it from the thrifty poor who took, on “the security of the great Audley,” the savings of their youth to secure an annuity for their age. But needy as the youngsters of that day might be, the usurer was as willing as they were needy. He lent them, however, with grave remonstrances on their extravagance, and took the cash they paid him, with an air of paternal regret. ”

“ Nor is Capel Court an exception. When the fate of a jobber depends on the turn which the market may take,—when sorrow or success hangs upon a word,—when family, friends, and fortune are in the balance, and a rumored falsehood may sink or save,—it is not in humanity to resist the temptation; and it has, unhappily, become too general a practice to stop at no invention, and to hesitate at no assertion, which may assist the inventor. From this cause the Stock Exchange is rarely mentioned with that respect which it merits, as the theatre of the most extensive money transactions in the world. ”

“ If mercantile or marine assurance were so common, it is difficult to imagine that some approximation to life assurance, however imperfect or normal it might be, was entirely unpractised. It must necessarily have occurred to the captain of a trading vessel, that the storm or the whirlwind, which might send his merchandise to the bottom of the sea, might also send himself with it; and the thought that, if his goods were worth insuring for the benefit of the owners, his own life was worth insuring for the benefit of his family, arose naturally from the risks he ran. ”

“ Who can answer that a scheme which oppresses the farmer, ruins the manufacturer, breaks the merchant, discourages industry, and reduces fraud to a system, which drains continually a portion of our national wealth away to foreigners, and draws most perniciously the rest of that immense property which was diffused among thousands into the pockets of the few,—who can answer that such a scheme will always endure? The whole art of stock-jobbing, the whole mystery of iniquity mentioned above, rises from this establishment, and is employed about the funds ”

“ If it be thought that life assurance offices should, for the sake of the public and of themselves, be interfered with by Government, the next step is to discover the simplest and the least vexatious mode of dealing with them. And here at once arises the question whether some difference should not be made between the mutual and the proprietary company. Assuming that the mutual system possesses every essential element of safety, it is equally true that there are hazards in the path of any company depending merely on its premiums, which do not attend a company with a respectable proprietary. ”

“ Minor capitalists, like parasitical plants, clung to him, and were always ready to advance their money in speculations at his bidding. Nothing seemed too gigantic for his grasp; nothing too minute for his notice. His mind was as capable of contracting a loan for millions, as of calculating the lowest possible amount on which a clerk could exist. Like too many great merchants, whose profits were counted by thousands, he paid his assistants the smallest amount for which he could procure them. ”

“ The actuaries, who are intelligent and accomplished gentlemen, must be propitiated, for they are in possession of a somewhat occult science, having justly the ear, the confidence, and the respect of their directors. And when it is borne in mind that these directors embrace, as a body, the first men in the city of London, that they possess a commercial, social, and, not seldom, a political consideration, it follows, that to conciliate them is as necessary to the well-being of any measure, as to conciliate the actuary is necessary to the co-operation of the directors. ”

“ The chance, however remote, of gaining a large sum by a small risk, with the feeling of anxious and not unpleasing excitement, rendered lotteries a favorite phase of English gambling; for the voice of the people had not spoken so peremptorily the great truth, that the state must not purchase a nation’s wealth at the price of a nation’s morals. That which a government employs as an instrument of wealth, is sure to be followed by the people to a lower extent, but in a more mischievous manner. ”

“ The Amicable, the Royal Exchange, the London [123] and the Equitable Assurance Companies numbered among their shareholders the greatest mercantile names of the day; they were the same men, or of the same generation, who as directors or as proprietors of the Bank of England resisted, a few years later, the just demand of William Pitt for the unclaimed dividends on the national debt; a demand so obviously sound that its opponents had not an argument to support their refusal. If, then, they were so vigorous when wrong, it may be imagined that they stood boldly forward when they were right. ”