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In modern times, among those na This system may be said to have betions that have arrived at a certain de- gan with the English revolution of 1689, gree of civilization, the art of printing, when the government of William disleading to the developements of credits covered, that instead of extracting the public and private, has opened a road whole sum of money wanted by the to the possession of great ineans, by go- government from the people by taxes, vernments and corporations, as well as a loan for a term of years could be had by individuals, far shorter and more of capitalists, by the annual payment agreeable to the successful than the old of a rent or interest for its use. At that beaten and irksome track of persever- time, the English debt was £660,000, ence and industry. It is a means greatly in the form of annuities, terminable in to be deprecated. It is subject to all a certain number of years, or with the the chances of a game of hazard, when life of the annuitant. In a few years, conducted in good faith, and susceptible the increase of the debt made this mode of endless varieties of fraud under the of borrowing no longer practicable, and guidance of persons destitute of princi- stocks payable in a longer term of ple, or whose sense of right has become years were issued ; but the greatest deadened by practice or too long an ap- irregularity prevailed in the payment of prenticeship in the operations by which the interest, and fluctuations in the vathey seek to enrich themselves at the lue of the promises were a necessary expense of others, without in any de- consequence. Gradually, however, the gree rendering an equivalent for the system became organized, and since property of which they possess them- that time, public credits have assumed selves. All the wealth of a nation must every shape of which they are capable. necessarily consist of the proceeds of They have emanated from authorized the industry of its inhabitants; and and responsible companies, and from whatever of genuine credit exists must governments irresponsible because of be a representative of some portion of their absolute power, and also because that accumulated property. Whoever of their inability to pay, on all descripbecomes possessed of those credits with- tions of security, and on no security. out the rendition of any valuable equi- Every variety of issue has been the valent, as is the case in gaming, either means of stupendous frauds, and every in cards or stocks, becomes unjustly pos- description of issuer has availed itself of sessed of that which cost the labor of the facility for fraud that the system many persons. Yet, during the last offers. 150 years, a stupendous system of gam The Bank of England was establishbling has sprung up, tolerated in all ed in 1697, on a capital loaned to the countries, and fraught with the greatest English government, at 8 per cent per political evils.
annum interest. The shadows of those
credits issued by the government to the the uses of paper money. The expeBank, were then put forth in the form rience of the 100 years that have since of bank-notes, or promises, to circulate elapsed has not sufficed to discover as money, and many disastrous fluctu- any mode by which what are called the ations attended the first use of this until benefits of the credit system may be sethen untried power. The government, cured, unmixed with the evils that atalso, urged by necessities growing out of teird it. The stock-jobbing that attendits wars, which have occupied one half ed the Mississippi Scheme convulsed the time that has elapsed since the revo- France, and Paris presented the speclution, used its new power of borrowing tacle of a mania that involved all classes, with an unsparing hand; and in 1711, and urged to ruin alike the opulent and at the close of a nine years war, it found the industrious. The distress which itself with £9,000,000 of outstanding followed the inevitable explosion was obligations of various forms, on which proportioned to the magnitude of the it had failed to pay interest, and which expansion, and the finances of the gowere at a heavy discount in conse vernment, from their connection with quence. The fainous South Sea Joint it, were so seriously compromised that Stock Company was then projected, they never recovered themselves. The chiefly as a means of absorbing, in the genius of a Colbert, a Turgot, and a payment of its capital, the depreciated Necker served only to stay the ruin government stock afloat. This was that finally burst in revolution. perhaps the first great stock bubble ; That revolution itself gave rise to the and to it succeeded many others, as the production of a stock -jobbing scheme existence of the stocks and the facility more magnificent than any
which for fraud they offered, soon attracted had gone before it. It was by the isthe attention of the speculative and sue of an immense amount of national knavish. Several bubble-banks were
paper-money, made payable in the started and exploded in different parts lands of the clergy contiscated to the of the Kingdom, and the opinion gained uses of the state, to popularize the reground that the "general industry lan- volution, and to interest all holders of guished for want of paper money." those securities against the return of Following out this idea, a Mr. Law the Royal Government. The first is. inagined that a bank might issue pa- sue, in 1790, of this paper, was $250per money to the amount of the value 000,000, and finally increased to the of all the lands in the country. He astounding sum of $8,437,535,000, in proposed his plan to the Scottish Par- 1796, when it ceased to have value. liament, which, however, rejected it. These immense emissions, and their He then, on going over to France, suc continued decline in value, produced ceeded in inoculating the Duke of Or- jobbing to an incredible extent. Forleans, then Regent, with the scheme. tunes were realized and lost in a few The finances of France were in a months. The extent to which jobbing wretched condition, and the idea of is in the funds was then carried, called for suing money to an indefinite extent was the interposition and regulation of the too flattering to be overlooked, and the government of France, and many laws famous “ Mississippi Scheme" was es were enacted to check the great disortablished-a most extravagant project ders and manifest evils that grew of banking and stock-jobbing, which out of the unbridled gambling at the exhausted all the resources of paper, in “Bourse." all its shapes, and resulted in an explo When commerce in Europe began to sion which laid a train of evils that flourish and spread itself over many napowerfully aided in the bringing about tions engaged in a reciprocal trade, it of the revolution of 1789-90. The prin- became matter of necessity that the ciples on which the scheme was found- leading merchants, ship-masters, capied were explained by Mr. Law, in a talists, brokers, insurers, &c., should discourse concerning money and trade. occasionally meet, to confer and transThis work was pronounced, by M. act business with each other; and Thiers, in the French Chambers, on Venice had its Rialto, “ where merthe occasion of re-chartering the Bank chants most do congregate ;". Bruges of France, as having contained all that and Amsterdam had also their Exis known, even at the present day, of changes ;” but the first in France was
at Toulon, in 1549. The second at Rouen, for delivering a certain quantity of in 1556. That of London was opened in stock, at a fixed price, on a specified
1566, by Elizabeth in person. An or- day; the premium being abandoned der of Council, in 1724, first gave a le- unless it suited the payer of it to avail gal existence to the Parisian Bourse. himself of his privilege.
When evidences of public and company It may be remarked, that the violent debts began to be transferable and as- fluctuation in prices, caused by the vasume a marketable shape, they natu cillations in the quantity of assignats rally formed, with bills of exchange, an afloat, pervaded all merchandise, as important item of the business transact- well as stocks ; and as a consequence, ed on the exchanges of the leading ca this system of gambling was applicable pitals of Europe, and became of suf- to all commodities, and the civil code ficient importance to absorb the entire contained severe penalties against the attention of individuals for their sale practice. With a view further to reand transfer. This business grew to strain their proceedings, the stock exgreat magnitude under the action of the change was, in the year X. of the Rescheme of Law; but nearly again public, brought under the control of the ceased when the complete explosion of Minister of Finance, and then placed that scheme produced so great a horror under the immediate inspection of the of paper credits as to banish them from Prefect of Police, who keeps a register of the public markets. The events of the all transactions of the day, and the price French revolution again called into life of each. The stock transactions are the whole array of speculators, and confined to sixty brokers, or " agens
de opened a vast field for their operations. change," appointed by the minister of The members of the Directory shame- finance, and each of them gives security lessly and openly engaged in jobbing, in 125,000f. for the faithful performance and acquired large fortunes by immoral of his duties. He is never, directly or practices, that under such examples be- indirectly, on any pretext, to be concame very general. Under the Con- cerned in buying or selling on his own sulate, when symptoms of returning account, and never to divulge the busihealth were apparent in the state of the ness of his client. These regulations, public mind, it became necessary to with many others very stringent in their veil the turpitude in which the scanda- nature, have in some degree remedied lous fortunes originated. The strong the abuses of the market, but have failgovernment of the empire. seeking to ed to check gambling to any extent. restore a moral tone to society, as well The transactions on the Paris Bourse as social order in the body politic, enact- for one year, 1831, reached, according ed severe laws against the gambling of to the official returns, the incredible the stock exchange, and that shameful sum of f4,766,088,989, or $893,641,684 means of enriching individuals at the nearly $15,000,000 to each broker. expense of the public, and of good mo The value of these offices is very great, rals, was openly abandoned. The and they are sometimes bought and sold form which speculation for the most at prices measured in hundreds of thoupart assumed, was to sell the public sands of dollars. funds not possessed by the seller, de During the same period in which the liverable at a certain time, some days paper issues produced such demoralizor weeks a-head, and looking for a pro- ing scenes in the French capital, the fit by buying at a price less than that suspension of the Bank of England and of the contract deliver it. the consequent depreciation of and flucThese transactions, when undertaken tuations in its value. produced similar by persons of influence in the govern- scenes, but to a far less extent, in Lonment, who can themselves et ihe de- don. The mercantile interest there cline they seek, for their own profit agreed to receive the inconvertible pawere a palpable fraud at the expense per of the Bank as usual, in the way of the public credit; others, sold at a of business, and by so doing, contributed certain price, deliverable within a spe- powerfully to the support and steadicified time, either at the option of the ness of its value. buyer or seller. This general principle In the United States, stock-gambling is susceptible of endless combinations. owes its origin to a train of events simiAnother mode was to pay a premium lar to those which gave it an impulse in
France, viz., to the issues of govern- banks was 308, with $137, 210,611 of ment paper-money during the revolu- capital. In four years, 60 banks were tion. The expense of the revolutionary established in Kentucky, and 20 in war was about $130,000,000, of which Ohio. In the five years from 1815 to one half was paid by direct taxation 1820, near $40,000,000 of bank capital during its continuance. The disburse- failed, and $80,000,000 came into opements of the government were mostly ration. The whole country was filled in paper issues, known as Continental with depreciated paper, and bank stocks money; and during the six years, end- of equivocal value. Stock-jobbing, thereing with 1781, about $359,000,000 of fore, could not but flourish in such a this paper was put afloat-nearly equal state of affairs, and the “ New-York to $100 for each inhabitant. The de- Stock and Exchange Board” received preciation was, of course, very great, its constitution in 1820; since which and the fluctuating value of the money time it has become the scene of the naturally produced jobbing, and laid most stupendous gambling operations, the foundation for the - Stock Market” unchecked by public opinion, and unin the United States. Tradition in- bridled by legislative restrictions. It is forms us that one of the leading Wall- true, that the legislature of New York street stock houses of the present day has made attempts, by invalidating owes its origin to the skill of a stage- gambling or time contracts, to restrain driver, in availing himself of the vacil- such operations ; but the effect seems lations of continental money to amass rather to have been to aggravate than a fortune. To gamble in stocks, how- remedy the evil. ever, requires the existence of stocks, The material for stock speculations, and with the funding and retirement of from the year 1820 up to 1830, rather the old paper money of the government, decreased than otherwise. The bubble and the issues of the old states, there re banks that had grown up at the south mained in the market but the stock of and west in the few years prior to the federal government, which, from 1820, were extinguished by the state $76,000,000, in 1795, was gradually re- laws compelling a resumption of speduced by payments to $39,135,000, in cie payments. The currency of the 1812, including Louisiana 6 per cent. country became comparatively steady, stock. Of bank and company stocks and the national debt annually diminfew existed, and the transfers in a year ished, and was finally discharged in amounted to but a small sum. The 1835. About the year 1830, however, war of 1812, with its issues of Trea- the late National Bank began a course sury notes, and increase of stock loans of action in relation to the currency by the federal government, called into that stimulated an immense speculation life large stock operations. The amount in stocks, corporate and state. The of debt outstanding at the close of the quantity of stocks created from 1830 war was $16,205,101 of treasury notes, up to 1838 may be approximated as and $109,279,000 of stock debt. The follows: Banks in the several states, treasury notes were depreciated, and $100,000,000; Rail-roads, $70,000,centering in New-York, where the 000; State stocks, $202,000,000, and business and capital of the country na- City stocks, $30,000,000—making toturally concentrates, gave rise to great gether some $412,000,000 worth of jobbing, as did also the stocks of numer stocks that, to a greater or less extent, ous banks that had been called into be- passed through the New-York stock ing under the belief that their presence market. So vast an amount crowding was necessary to supply. the vacancy upon a market of comparatively limitcaused by the dissolution of the old Na- ed capital, in a few years, could not tional Bank, in 1811. In 1811, there but produce jobbing-more particularly were 88 banks in the United States, as that the creation of the stocks was with an aggregate capital of $12,610,- stimulated by the facility of procuring 601. In 1816, the number reached 208, paper credits. The loans of the late having a capital of $82,259,590. Nearly National Bank, and the swelling credits all these new banks failed soon after the of the new institution, afforded, in the peace; and in 1817, the new National hands of speculators, the means of enBank was established, with a capital of terprises. The mania seized also upon $35,000,000. In 1820, the number of the mercantile community. Large