process, which goes on in widening circles, eating away all that is sound in the social life. This happens to a great extent in all speculative periods, and each leaves behind a corrupt deposit which the next enlarges. Line between Commerce and Gambling. But all commerce is speculation. Where is the line to be drawn? The main principle is clear, though its detailed application is difficult. All that can be done is to show the point of divergence, and then leave each man to choose his own road at his peril. Whatever aids the distribution of goods is commerce. Any mode of operating upon prices that cannot have that tendency is gambling. But the simple holding over of stocks, such as grain, so far from being gambling, is often, in spite of the popular prejudice, one of the best services that commerce renders to society—the equable sharing out of short stores amongst a shipwrecked crew. All sorts of time bargains therefore, it need scarcely be said, whether of securities, railway shares, or produce, where no realities pass or are intended to pass, are as purely gambling as rouge et noir and roulette. As for " rigging the market," and similiar expedients, frequent enough in times of mania, they are not gambling, but fraud; and if the law could grasp delicately enough to seize the perpetrators, the proper place for them is the bar of the Old Bailey. 66 Whatever immediately or remotely brings about the condition in which these things are done-in which being done first by the shameless, they are done afterwards by others less degraded, until class after class is sucked into the vortex-is to be dreaded and guarded against as one of the greatest of national calamities. Speculation by the non-trading Classes. All that has been hitherto described of the machinery of the money market, shows its extraordinary tendency to favour speculation by ever-recurring and growing temptations. The abundance of the market furnishes the means, but the moving powers in every speculation must be those highly contagious passions of the human mind which prompt men to seek sudden accessions of wealth--which seem to have their times of afflux and reflux-and which, whenever they set in, go flooding even into the remote nooks and corners of society. The quiet maiden annuitant, the hard-worked country surgeon, the plodding clerk who has cut pens over the same desk for a quarter of a century, nay, the parson himself, when there is nothing to be done with a little hoard of savings, the product of much self-denial, but to buy consols at 100, feels his blood begin to mount, and the fever to set in, when the El Dorados of Capel Court and its neighbourhood are opened to his imagination. The temptation is strong, but the result, if he yields, is generally deplorable. The chances are a hundred to one that he is bit. For where there is really some great and sure gain to be made, the Argus-eyed capitalists on the spot have known and secured it before any simple rustic can come in for a share. Their intelligence, indeed, is not infallible. When the London and Birmingham Railway was yet but a thought, there were men in London familiar with the heights and depths of speculation, who could not easily see how prolific of wealth that thought was soon to be found. Stories are told of individuals, eminent for speculative foresight, who, being tempted to take some of the early shares in that great concern, timidly sold them not very long before the whole world awoke to a perception of their value. But if such men can miscalculate, what security can there ever be for the distant rural adventurer, who knows nothing but what is in the county newspaper1? The speculators during the Bank Restriction period were a favourite theme with Cobbett, and some of his sketches were thrown off with a vigour which he Speculation in the North. With respect to the railways, the truth was first seen and the lead taken by the sanguine, impetuous, over-mastering energy of Lancashire; an energy, the like of which is not to be found in the whole world, except in the kindred region of North America. It will appear in a succeeding page that the relation of Lancashire to all England is becoming more than ever a practical question. The men of Lancashire are not the wisest in England, but they have most WILL, and when they happen to be in the right, nothing can stand before them. Unquestionably, in the matter of the Corn Laws, Mr. Cobden and his Ironsides rode over the country gentlemen very much in the fashion of Cromwell over the Cavaliers at Marston Moor. Marston Moor and Free Trade are both worthy of national commemoration; but it is worthy of note, that a purely Cromwellian régime was not to the taste of the English people. They could not brook to have the stream of their rich and varied life compelled to flow in one exclusive channel. They chose rather that it should be free to spread abroad even into swamps and noisome pools under the harlots and sybarites of the Restoration. This is no digression, but only a winding in the road, which opens a glimpse into another part of the region under survey. alone possessed. Here is a short passage from the "Advice to Young Men." 66 The great temptation to this gambling is, as is the case in other gambling, the success of the few. As young men who crowd to the army, in search of rank and renown, never look into the ditch that holds their slaughtered companions, but have their eye constantly fixed on the General-in-chief; and as each of them belongs to the same profession, and is sure to be conscious that he has equal merit, every one deems himself the suitable successor of him who is surrounded with Aides des camps, and who moves battalions and columns by his nod; so with the rising generation of speculators: they see the great estates that have succeeded the pencil-box and the orange-basket; they see those whom nature and good laws made to black shoes, sweep chimneys or the streets, rolling in carriages, or sitting in saloons surrounded by gaudy footmen with napkins twisted round their thumbs; and they can see no earthly reason why they should not all do the same; forgetting the thousands and thousands who, in making the attempt, have reduced themselves to that beggary which, before their attempt, they would have regarded as a thing impossible." Amongst the manufacturing districts of England, the tendency to gambling speculation is probably more constantly ready to start into life than elsewhere, and when in movement to go greater lengths. In 1845 many provincial stock exchanges were established for the first time, and the persons who operated on those exchanges at Leeds, Manchester, and Liverpool, seemed to have made up their minds, that it should go hard with them, if they did not better every lesson that was set by the metropolis. Wherever the eye is turned, therefore, it would seem to find nothing but causes calculated to produce speculation. Radiating inwards to the great centres of commercial life, the several currents seem to flow as if under an irresistible impulse. Is this necessary? Is it our destiny? The question is terrible. All the fibres of the money power have been traced rudely, but accurately enough to show their lines of direction. Still there remains their point of highest concentration upon which we have said nothing. That point is the BANK OF ENGLAND. CHAPTER VIII. THE BANK OF ENGLAND. "And round about him lay on every side Bank Restriction Act. THE history of the Bank of England, if it could be truly written, would be more instructive than the history of most nations. Even a series of its weekly balance-sheets, as far back as they exist, with the contemporaneous price of consols, and short illustrative notes, showing any important events in the money market, would be a contribution to the statistics of this subject of very great value. This, however, is not the place to attempt any history of the Bank, even if the requisite ability existed; nor even to notice the many interesting facts which occurred under the Bank Restriction Act, more or less connected with the present subject; but this much may be remarked that whenever the light of a complete monetary science shall be cast back upon the transactions of that period, it will do more than even Mr. Tooke has already done to change the whole complexion of the bullion controversy. I am persuaded it will be found that in the whole of that matter, 1 I should be sorry to seem to cast any slight on the interesting work of Mr. Francis, which I have read with pleasure. But that work is literary, rather than scientific. The kind of history which, as it seems to me, would be so valuable, would be that of the monetary action of the Bank, including and expanding the matter contained in the chapters on the Circulation, in Mr. Tooke's "History of Prices." |