Chapter XII.

The nation had passed through the years of exhaustion and depression that follow a long war; its health had returned, and its elastic vigor was already reviving, when two remarkable harvests in succession, and an increased trade with the American continent, raised it to prosperity. One sign of vigor, the roll of capital, was wanting; speculation was fast asleep. The government of the day seems to have observed this with regret. A writer of authority on the subject says that, to stir stagnant enterprise, they directed "the Bank of England to issue about four millions in advances to the state and in enlarged discounts." I give you the man's words; they doubtless carry a signification to you, though they are jargon in a fog to me. Some months later the government took a step upon very different motives, which incidentally had a powerful effect in loosening capital and setting it in agitation. They reduced to four per cent the Navy Five per Cents, a favorite national investment, which represented a capital of two hundred millions. Now, when men have got used to five per cent from a certain quarter, they cannot be content with four, particularly the small holders; so this reduction of the Navy Five per Cents unsettled several thousand capitalists, and disposed them to search for an investment. A flattering one offered itself in the nick of time. Considerable attention had been drawn of late to the mineral wealth of South America, and one or two mining companies existed, but languished in the hands of professed speculators. The public now broke like a sudden flood into these hitherto sluggish channels of enterprise, and up went the shares to a high premium.

Almost contemporaneously, numerous joint-stock companies were formed, and directed toward schemes of internal industry. The small capitalists that had sold out of the Navy Five per Cents threw themselves into them all, and being bona fide speculators, drew hundreds in their train. Adventure, however, was at first restrained in some degree by the state of the currency. It was low, and rested on a singularly sound basis. Mr. Peel's Currency Bill had been some months in operation; by its principal provision the Bank of England was compelled on and after a certain date to pay gold for its notes on demand. The bank, anticipating a consequent rush for gold, had collected vast quantities of sovereigns, the new coin; but the rush never came, for a mighty simple reason. Gold is convenient in small sums, but a burden and a nuisance in large ones. It betrays its presence and invites robbers; it is a bore to lug it about, and a fearful waste of golden time to count it. Men run upon gold only when they have reason to distrust paper. But Mr. Peel's Bill, instead of damaging Bank of England paper, solidified it, and gave the nation a just and novel confidence in it. Thus, then, the large hoard of gold, fourteen to twenty millions, that the caution of the bank directors had accumulated in their coffers, remained uncalled for. But so large an abstraction from the specie of the realm contracted the provincial circulation. The small business of the country moved in fetters, so low was the metal currency. The country bankers petitioned government for relief, and government, listening to representations that were no doubt supported by facts, and backed by other interests, tampered with the principle of Mr. Peel's Bill, and allowed the country bankers to issue 1 pound and 2 pound notes for eleven years to come.

To this step there were but six dissentients in the House of Commons, so little was its importance seen or its consequences foreseen. This piece of inconsistent legislation removed one restraint, irksome but salutary, from commercial enterprise at a moment when capital was showing some signs of a feverish agitation. Its immediate consequences were very encouraging to the legislator; the country bankers sowed the land broadcast with their small paper, and this, for the cause above adverted to, took pro tem. the place of gold, and was seldom cashed at all except where silver was wanted. On this enlargement of the currency the arms of the nation seemed freed, enterprise shot ahead unshackled, and unwonted energy and activity thrilled in the veins of the kingdom. The rise in the prices of all commodities which followed, inevitable consequence of every increase in the currency, whether real or fictitious, was in itself adverse to the working classes; but the vast and numerous enterprises that were undertaken, some in the country itself, some in foreign parts, to which English workmen were conveyed, raised the price of labor higher still in proportion; so no class was out of the sun.

Men's faces shone with excitement and hope. The dormant hordes of misers crept out of their napkins and sepulchral strong-boxes into the warm air of the golden time. The mason's chisel chirped all over the kingdom, and the shipbuilders'* hammers rang all round the coast; corn was plenty, money became a drug, labor wealth, and poverty and discontent vanished from the face of the land. Adventure seemed all wings, and no lumbering carcass to clog it. New joint-stock companies were started in crowds as larks rise and darken the air in winter;** hundreds came to nothing, but hundreds stood, and of these nearly all reached a premium, small in some cases, high in most, fabulous in some; and the ease with which the first calls for cash on the multitudinous shares were met argued the vast resources that had hitherto slumbered in the nation for want of promising investments suited to the variety of human likings and judgments. The mind can hardly conceive any species of earthly enterprise that was not fitted with a company, oftener with a dozen, and with fifty or sixty where the proposed road to metal was direct. Of these the mines of Mexico still kept the front rank, but not to the exclusion of European, Australian and African ore.

* Two hundred new vessels are said to have been laid on the stocks in one year.

** In two years 624 new companies were projected.

That masterpiece of fiction, "the Prospectus,"* diffused its gorgeous light far and near, lit up the dark mine, and showed the minerals shining and the jewels peeping; shone broad over the smiling fields, soon to be plowed, reaped, and mowed by machinery; and even illumined the depths of the sea, whence the buried treasures of ancient and modern times were about to be recovered by the Diving-bell Company.

* There is a little unlicked anonymuncule going scribbling about, whose creed seems to be that a little camel, to be known, must be examined and compared with other quadrupeds, but that the great arts can be judged out of the depths of a penny-a-liner's inner consciousness, and to be rated and ranked need not be compared inter se. Applying the microscope to the method of the novelist, but diverting the glass from the learned judge's method in Biography, the learned historian's method in History, and the daily chronicler's method in dressing res gestoe for a journal, this little addle-pate has jumped to a comparative estimate, not based on comparison, so that all his blindfold vituperation of a noble art is chimera, not reasoning; it is, in fact, a retrograde step in science and logic. This is to evade the Baconian method, humble and wise, and crawl back to the lazy and self-confident system of the ancients, that kept the world dark so many centuries. It is [Greek] versus Induction. "[Greek]," ladies, is "divination by means of an ass's skull." A pettifogger's skull, however, will serve the turn, provided that pettifogger has been bitten with an insane itch for scribbling about things so infinitely above his capacity as the fine arts. Avoid this sordid dreamer, and follow, in letters as in science, the Baconian method! Then you will find that all uninspired narratives are more or less inexact, and that one, and one only, Fiction proper, has the honesty to antidote its errors by professing inexactitude. You will find that the Historian, Biographer, Novelist, and Chronicler are all obliged to paint upon their data with colors the imagination alone can supply, and all do it--alive or dead. You will find that Fiction, as distinguished from neat mendacity, has not one form upon earth, but a dozen. You will find the most habitually, willfully, and inexcusably inaccurate, with the means of accuracy under its nose, that form of fiction called "anonymous criticism," political and literary; the most equivocating, perhaps, is the "imaginavit," better known at Lincoln's Inn as the "affidavit." In the article of exaggeration, the mildest and tamest are perhaps History and the Novel, the boldest and most sparkling is the Advertisement, but the grandest, ablest, most gorgeous and plausibly exaggerating is surely the grave commercial prospectus, drawn up and signed by potent, grave and reverend seniors, who fear God, worship Mammon, revere big wigs right or wrong, and never read romances.

One mine was announced with a "vein of ore as pure and solid as a tin flagon."

In another the prospectus offered mixed advantages. The ore lay in so romantic a situation, and so thick, that the eye could be regaled with a heavenly landscape, while the foot struck against neglected lumps of gold weighing from two pounds to fifty.

This put the Bolanos mine on its mettle, and it announced, "not mines, but mountains of silver." Here, then, men might chip metal instead of painfully digging it. With this, up went the shares till they reached 500 premium.

Tialpuxahua was done at 199 premium.
Anglo Mexican  10 pounds paid, went to 158 pounds premium.
United Mexican 10   "      " ,     "   155 pounds   "
Columbian      10   "      " ,     "    82 pounds   "

But the Real del Monte, a mine of longer standing, on which 70 pounds was paid up, went to 550 premium, and at a later period, for I am not following the actual sequence of events, reached the enormous height of 1350 premium.

The Prospectus of the Equitable Loan Company lamented in paragraph one the imposition practiced on the poor, and denounced the pawnbrokers' 15 per cent. In paragraph four it promised 40 per cent to its shareholders.

Philanthropy smiled in the heading, and Avarice stung in the tail. No wonder a royal duke and other good names figured in this concern. Another eloquent sheet appealed to the national dignity. Should a nation that was just now being intersected by forty canal companies, and lighted by thirty gas companies, and every life in it worth a button insured by a score of insurance companies, dwell in hovels? Here was a country that, after long ruling the sea, was now mining the earth, and employing her spoils nobly, lending money to every nation and tribe that would fight for constitutional liberty. Should the principal city of so sovereign a nation be a collection of dingy dwellings made with burned clay? No; let these perishable and ignoble, materials give way, and London be granite, or at least wear a granite front--with which up went the Red Granite Company.

A railway was projected from Dover to Calais, but the shares never came into the market.

The Rhine Navigation shares were snapped up directly. The original holders, having no faith in their own paper, sold large quantities directly for the account. But they had underrated the ardor of the public. At settling day the shares were at 28 premium, and the sellers found they had made a most original hedge; for "the hedge" is not a daring operation that grasps at large gains; it is a timid and cautious maneuver, whose humble aim is to lower the figures of possible loss or gain. To be ruined by a stroke of caution so shocked the directors' sense of justice that they forged new coupons in imitation of the old, and tried to pass them off. The fraud was discovered; a committee sat on it. Respectables quaked. Finally, a scapegoat was put forward and expelled the Stock Exchange, and with that the inquiry was hushed. It would have let too much daylight in on a host of "good names" in the City and on 'Change.

At the same time, the country threw itself with ardor into Transatlantic loans. This, however, was an existing speculation vastly dilated at the period we are treating, but created about five years earlier. Its antecedent history can be dispatched in a few words.

England is said to be governed by a limited monarchy; but in case of a struggle between the two, her heart goes more with unlimited republic than with genuine monarchy. The Spanish colonies in South America found this out, and in their long battle for independence came to us for sympathy and cash. They often obtained both, and in one case something more; we lent Chili a million at six per cent, but we lent her ships, bayonets, and Cochrane gratis. This last, a gallant and amphibious dragoon, went to work in a style the slow Spaniard was unprepared for; blockaded the coast, overawed the Royalist party, and wrenched the state from the mother country, and settled it a republic. One of the first public acts of this Chilian republic was to borrow a million of us to go on with. Peru took only half a million at this period. Colombia, during the protracted struggle her independence cost her, obtained a sort of carte blanche loan from us at ten per cent. We were to deliver the stock in munitions of war, as called for, which, you will 'observe, was selling our loan; for at the bottom of all our romance lies business, business, business. Her freedom secured, the new state accommodated us by taking two millions of 5 per cent stock at 84. In all, about ten millions nominal capital, eight millions cash, crossed the Atlantic while we were cool; but now that we were heated by three hundred joint-stock companies, and the fire fanned by seven hundred prospectuses, fresh loans were effected with a wider range of territory and on a more important scale.

Brazil now got . . . 3,200,000 l. in two loans;
Colombia . . . . . . 4,750,000 l.;
Peru . . . . . . . . 1,366,000 l. in two loans;
Mexico . . . . . . . 6,400,000 l. in two loans;
Buenos Ayres . . . . 1,000,000 l.;

and Guatemala, a state we never heard of till she wanted money, took a million and a half. Besides these there were smaller loans, lent, not to nations, but to tribes. So hot was our money in our pockets that we tried 200,000 pounds on Patagonia. But the savages could not be got to nail us, which was the more to be regretted, as we might have done a good stroke with them; could have sent the stock out in fisherman's boots, cocked hats, beads, Bibles, and army misfits.

Europe found out there existed an island overflowing with faith and overburdened with money; she ran at us for a slice of the latter. We lent Naples two millions and a half at 5 per cent stock 92 1/2. Portugal a million and a half at 87. Austria three millions and a half at 82 1/2. Denmark three millions and a half at 3 per cent stock 75 1/2. Then came a bonne bouche. The subtle Greek had gathered from his western visitors a notion of the contents of Thucydides, and he came to us for sympathy and money to help him shake off the barbarians and their yoke, and save the wreck of the ancient temples. The appeal was shrewdly planned. England reads Thucydides, and skims Demosthenes, though Greece, it is presumed, does not. The impressions of our boyhood fasten upon our hearts, and our mature reason judges them like a father, not like a judge. To sweep the Tartar out of the Peloponnese, and put in his place a free press that should recall from the tomb that soul of freedom, and revive by degrees that tongue of music--who can play Solomon when such a proposal comes up for judgment?

"Give yourself no further concern about the matter," said the lofty Burdett, with a gentlemanlike wave of the hand; "your country shall be saved."

"In a few weeks," said another statesman, "Cochrane will be at Constantinople, and burn the port and its vessels. Having thus disarmed invasion, he will land in the Morea and clear it of the Turks."

Greece borrowed in two loans 2,800,000 pounds at 5 per cent. Russia (droll juxtaposition!) drew up the rear. She borrowed three millions and a half, but upon far more favorable terms than, with all our romance, we accorded to "Graeculus esuriens." The Greek stock ruled * from 56 1/2 to 59.

* A corruption from the French verb "rouler."

Into these loans, and the multitudinous mines and miscellaneous enterprises, gas, railroad, canal, steam, dock, provision, insurance, milk, water, building, washing, money-lending, fishing, lottery, annuities, herring-curing, poppy-oil, cattle, weaving, bog draining, street-cleaning, house-roofing, old clothes exporting, steel-making, starch, silk-worm, etc., etc., etc., companies, all classes of the community threw themselves, either for investment or temporary speculation, on the fluctuations of the share-market. One venture was ennobled by a prince of the blood figuring as a director; another was sanctified by an archbishop; hundreds were solidified by the best mercantile names in the cities of London, Liverpool, and Manchester. Princes, dukes, duchesses, stags, footmen, poets, philosophers, divines, lawyers, physicians, maids, wives, widows, tore into the market, and choked the Exchange up so tight that the brokers could not get in nor out, and a bare passage had to be cleared by force and fines through a mass of velvet, fustian, plush, silk, rags, lace, and broadcloth, that jostled and squeezed each other in the struggle for gain. The shop-keeper flung down his scales and off to the share-market; the merchant embarked his funds and his credit; the clerk risked his place and his humble respectability. High and low, rich and poor, all hurried round the Exchange, like midges round a flaring gas-light, and all were to be rich in a day.

And, strange to say, all seemed to win and none to lose; for nothing was at a discount except toil and self-denial, and the patient industry that makes men rich, but not in a day.

One cold misgiving fell. The vast quantities of gold and silver that Mexico, mined by English capital and machinery, was about to pour into our ports, would so lower the price of those metals that a heavy loss must fall on all who held them on a considerable scale at their present values in relation to corn, land, labor and other properties and commodities.

"We must convert our gold," was the cry. Others more rash said: "This is premature caution--timidity. There is no gold come over yet; wait till you learn the actual bulk of the first metallic imports." "No, thank you," replied the prudent ones, "it will be too late then; when once they have touched our shores, the fall will be rapid." So they turned their gold, whose value was so precarious, into that unfluctuating material, paper. This solitary fear was soon swallowed up in the general confidence. The king congratulated Parliament, and Parliament the king. Both houses rang with trumpet notes of triumph, a few of which still linger in the memories of living men.

1. "The cotton trade and iron trade were never so flourishing."

2. "The exports surpassed by millions the highest figure recorded in' history."

3. "The hum of industry was heard throughout the fields."

4. "Joy beamed in every face."

5. "The country now reaped in honor and repose all it had sown in courage, constancy and wisdom."

6. "Our prosperity extended to all ranks of men, enhanced by those arts which minister to human comfort, and those inventions by which man seems to have obtained a mastery over Nature through the application of her own powers."

But one honorable gentleman informed the Commons that "distress had vanished from the land,"* and in addressing the throne acknowledged a novel embarrassment: "Such," said he, "is the general prosperity of the country, that I feel at a loss how to proceed; whether to give precedence to our agriculture, which is the main support of the country, to our manufactures, which have increased to an unexampled extent, or to our commerce, which distributes them to the ends of the earth, finds daily new outlets for their distribution, and new sources of national wealth and prosperity."

* "The poor ye shall have always with you."--Chimerical Evangelist.

Our old bank did not profit by the golden shower. Mr. Hardie was old, too, and the cautious and steady habits of forty years were not to be shaken readily. He declined shares, refused innumerable discounts, and loans upon scrip and invoices, and, in short, was behind the time. His bank came to be denounced as a clog on commerce. Two new banks were set up in the town to oil the wheels of adventure, on which he was a drag, and Hardie fell out of the game.

He was not so old or cold as to be beyond the reach of mortification, and these things stung him. One day he said fretfully to old Skinner, "It is hardly worth our while to take down the shutters now, for anything we do."

One afternoon two of his best customers, who were now up to their chins in shares, came and solicited a heavy loan on their joint personal security. Hardie declined. The gentlemen went out. Young Skinner watched them, and told his father they went into the new bank, stayed there a considerable time, and came out looking joyous. Old Skinner told Mr. Hardie. The old gentleman began at last to doubt himself and his system.

"The bank would last my time," said he, "but I must think of my son. I have seen many a good business die out because the merchant could not keep up with the times; and here they are inviting me to be director in two of their companies--good mercantile names below me. It is very flattering. I'll write to Dick. It is just he should have a voice; but, dear heart! at his age we know beforehand he will be for galloping faster than the rest. Well, his old father is alive to curb him."

It was always the ambition of Mr. Richard Hardie to be an accomplished financier. For some years past he had studied money at home and abroad--scientifically. His father's connection had gained him a footing in several large establishments abroad, and there he sat and worked en amateur as hard as a clerk. This zeal and diligence in a young man of independent means soon established him in the confidence of the chiefs, who told him many a secret. He was now in a great London bank, pursuing similar studies, practical and theoretical.

He received his father's letters sketching the rapid decline of the bank, and finally a short missive inviting him down to consider an enlarged plan of business. During the four days that preceded the young man's visit, more than one application came to Hardie senior for advances on scrip, cargoes coming from Mexico, and joint personal securities of good merchants that were in the current ventures. Old Hardie now, instead of refusing, detained the proposals for consideration. Meantime, he ordered five journals daily instead of one, sought information from every quarter, and looked into passing events with a favorable eye. The result was that he blamed himself, and called his past caution timidity. Mr. Richard Hardie arrived and was ushered into the bank parlor. After the first affectionate greetings old Skinner was called in, and, in a little pompous, good-hearted speech, invited to make one in a solemn conference. The compliment brought the tears into the old man's eyes. Mr. Hardie senior opened, showed by the books the rapid decline of business, pointed to the rise of two new banks owing to the tight hand he had held unseasonably, then invited the other two to say whether an enlarged system was not necessary to meet the times, and submitted the last, proposals for loans and discounts. "Now, sir, let me have your judgment."

"After my betters, sir," was old Skinner's reply.

"Well, Dick, have you formed any opinion on this matter?"

"I have, sir."

"I am extremely glad of it," said the old gentleman, very sincerely, but with a shade of surprise; "out with it, Dick."

The young man thus addressed by his father would not have conveyed to us the idea of "Dick." His hair was brown; there were no wrinkles under his eyes or lines in his cheek, but in his manner there was no youth whatever. He was tall, commanding, grave, quiet, cold, and even at that age almost majestic. His first sentence, slow and firm, removed the paternal notion that a cipher or a juvenile had come to the council-table.

"First, sir, let me return to you my filial thanks for that caution which you seem to think has been excessive. There I beg respectfully to differ with you."

"I am glad of it, Dick; but now you see it is time to relax, eh?"

"No, sir."

The two old men stared at one another. The senile youth proceeded: "That some day or other our system will have to be relaxed is probable, but just now all it wants is--tightening."

"Why, Dick? Skinner, the boy is mad. You can't have watched the signs of the times."

"I have, sir; and looked below the varnish."

"To the point, then, Dick. There is a general proposal 'to relax our system.' The boy uses good words, Skinner, don't he? and here are six particulars over which you can cast your eye. Hand them to him, Skinner."

"I will take things in that order," said Richard, quietly running his eye over the papers. There was a moment's silence. "It is proposed to connect the bank with the speculations of the day."

"That is not fairly stated, Dick; it is too broad. We shall make a selection; we won't go in the stream above ankle deep."

"That is a resolution, sir, that has been often made but never kept--for this reason: you can't sit on dry land and calculate the force of the stream. It carries those who paddle in it off their feet, and then they must swim with it or--sink."

"Dick, for Heaven's sake, no poetry here."

"Nay, sir," said old Skinner, "remember, 'twas you brought the stream in."

"More fool I. 'Flow on, thou shining Dick'; only the more figures of arithmetic, and the fewer figures of speech, you can give old Skinner and me, the more weight you will carry with us."

The young man colored a moment, but never lost his ponderous calmness.

"I will give you figures in their turn, But we were to begin with the general view. Half-measures, then, are no measures; they imply a vacillating judgment; they are a vain attempt to make a pound of rashness and a pound of timidity into two pounds of prudence. You permit me that figure, sir; it comes from the summing-book. The able man of business fidgets. He keeps quiet, or carries something out."

Old Skinner rubbed his hands. "These are wise words, sir."

"No, only clever ones. This is book-learning. It is the sort of wisdom you and I have outgrown these forty years. Why, at his age I was choke-full of maxims. They are good things to read; but act proverbs, and into the Gazette you go. My faith in any general position has melted away with the snow of my seventy winters."

"What, then, if it was established that all adders bite, would you refuse to believe his adder would bite you, sir?"

"Dick, if a single adder bit me, it would go farther to convince me that the next adder would bite me too than if fifty young Buffons told me all adders bite."

The senile youth was disconcerted for a single moment. He hesitated. The keys that the old man had himself said would unlock his judgment lay beside him on the table. He could not help glancing slyly at them, but he would not use them before their turn. His mind was methodical. His will was strong in all things. He put his hand in his side-pocket, and drew out a quantity of papers neatly arranged, tied, and indorsed.

The old men instantly bestowed a more watchful sort of attention on him.

"This, gentlemen, is a list of the joint-stock companies created last year. What do you suppose is their number?"

"Fifty, I'll be bound, Mr. Richard."

"More than that, Skinner. Say eighty."

"Two hundred and forty-three, gentlemen. Of these some were stillborn, but the majority hold the market. The capital proposed to be subscribed on the sum total is two hundred and forty-eight millions."

"Pheugh! Skinner!"

"The amount actually paid at present (chiefly in bank-notes) is stated at 43,062,608 pounds, and the balance due at the end of the year on this set of ventures will be 204,937,392 pounds or thereabouts. The projects of this year have not been collected, but they are on a similar scale. Full a third of the general sum total is destined to foreign countries, either in loans or to work mines, etc., the return for which is uncertain and future. All these must come to nothing, and ruin the shareholders that way, or else must sooner or later be paid in specie, since no foreign nation can use our paper, but must sell it to the Bank of England. We stand, then, pledged to burst like a bladder, or to export in a few months thrice as much specie as we possess. To sum up, if the country could be sold to-morrow, with every brick that stands upon it, the proceeds would not meet the engagements into which these joint-stock companies have inveigled her in the course of twenty months. Viewed then, in gross, under the test, not of poetry and prospectus, but of arithmetic, the whole thing is a bubble."

"A bubble?" uttered both the seniors in one breath, and almost in a scream.

"But I am ready to test it in detail. Let us take three main features--the share-market, the foreign loans, and the inflated circulation caused by the provincial banks. Why do the public run after shares? Is it in the exercise of a healthy judgment? No; a cunning bait has been laid for human weakness. Transferable shares valued at 100 pounds can be secured and paid for by small instalments of 5 pounds or less. If, then, his 100 pound shares rise to 130 pounds each, the adventurer can sell at a nominal profit of 30 per cent, but a real profit of 600 per cent on his actual investment. This intoxicates rich and poor alike. It enables the small capitalist to operate on the scale that belongs, in healthy times, to the large capitalist; a beggar can now gamble like a prince; his farthings are accepted as counters for sovereigns; but this is a distinct feature of all the more gigantic bubbles recorded. Here, too, you see, is illusory credit on a vast scale, with its sure consequence, inflated and fictitious values; another bit of soap that goes to every bubble in history. Now for the Transatlantic loans. I submit them to a simple test. Judge nations like individuals. If you knew nothing of a man but that he had set up a new shop, would you lend him money? Then why lend money to new republics of whom you know nothing but that, born yesterday, they may die to-morrow, and that they are exhausted by recent wars, and that, where responsibility is divided, conscience is always subdivided?"

"Well said, Richard, well said."

"If a stranger offered you thirty per cent, would you lend him your money?"

"No; for I should know he didn't mean to pay."

"Well, these foreign negotiators offer nominally five per cent, but, looking at the price of the stock, thirty, forty, and even fifty per cent. Yet they are not so liberal as they appear; they could afford ninety per cent. You understand me, gentlemen. Would you lend to a man that came to you under an alias like a Newgate thief? Cast your eye over this prospectus. It is the Poyais loan. There is no such place as Poyais."

"Good heavens!"

"It is a loan to an anonymous swamp by the Mosquito River. But Mosquito suggests a bite. So the vagabonds that brought the proposal over put their heads together as they crossed the Atlantic, and christened the place Poyais; and now fools that are not fools enough to lend sixpence to Zahara, are going to lend 200,000 pounds to rushes and reeds."

"Why, Richard, what are you talking about? 'The air is soft and balmy; the climate fructifying; the soil is spontaneous'--what does that mean? mum! mum! 'The water runs over sands of gold.' Why, it is a description of Paradise. And, now I think of it, is not all this taken from John Milton?"

"Very likely. It is written by thieves."

"It seems there are tortoise-shell, diamonds, pearls--"

"In the prospectus, but not in the morass. It is a good, straightforward morass, with no pretensions but to great damp. But don't be alarmed, gentlemen, our countrymen's money will not be swamped there. It will all be sponged up in Threadneedle Street by the poetic swindlers whose names, or aliases, you hold in your hand. The Greek, Mexican, and Brazilian loans may be translated from Prospectish into English thus: At a date when every sovereign will be worth five to us in sustaining shriveling paper and collapsing credit, we are going to chuck a million sovereigns into the Hellespont, five million sovereigns into the Gulf of Mexico, and two millions into the Pacific Ocean. Against the loans to the old monarchies there is only this objection, that they are unreasonable; will drain out gold when gold will be life-blood; which brings me, by connection, to my third item--the provincial circulation. Pray, gentlemen, do you remember the year 1793?"

For some minutes past a dead silence and a deep, absorbed attention had received the young man's words; but that quiet question was like a great stone descending suddenly on a silent stream. Such a noise, agitation, and flutter. The old banker and his clerk both began to speak at once.

"Don't we?"

"Oh, Lord, Mr. Richard, don't talk of 1793."

"What do you know about 1793? You weren't born."

"Oh, Mr. Richard, such a to-do, sir! 1800 firms in the Gazette. Seventy banks stopped."

"Nearer a hundred, Mr. Skinner. Seventy-one stopped in the provinces, and a score in London."

"Why, sir, Mr. Richard knows everything, whether he was born or not."

"No, he doesn't, you old goose; he doesn't know how you and I sat looking at one another, and pretending to fumble, and counting out slowly, waiting sick at heart for the sack of guineas that was to come down by coach. If it had not come we should not have broken, but we should have suspended payment for twenty-four hours, and I was young enough then to have cut my throat in the interval."

"But it came, sir--it came, and you cried, 'Keep the bank open till midnight!' and when the blackguards heard that, and saw the sackful of gold, they crept away; they were afraid of offending us. Nobody came anigh us next day. Banks smashed all round us like glass bottles, but Hardie & Co. stood, and shall stand for ever and ever. Amen."

"Who showed the white feather, Mr. Skinner? Who came creeping and sniveling, and took my hand under the counter, and pressed it to give me courage, and then was absurd enough to make apologies, as if sympathy was as common as dirt? Give me your hand directly, you old--Hallo!"

"God bless you, sir! God bless you! It is all right, sir. The bank is safe for another fifty years. We have got Master Richard, and he has got a head. O Gemini, what a head he has got, and the other day playing marbles!"

"Yes, and we are interrupting him with our nonsense. Go on, Richard."

Richard had secretly but fully appreciated the folly of the interruption. His was a great mind, and moved in a sort of pecuniary ether high above the little weaknesses my reader has observed in Hardie senior and old Skinner. Being, however, equally above the other little infirmities of fretfulness and fussiness, he waited calmly and proceeded coolly.

"What was the cause of the distress in 1793?"

"Ah! that was the puzzle--wasn't it, Skinner? We were never so prosperous as that year. The distress came over us like a thunder-storm all in a moment. Nobody knows the exact cause."

"I beg your pardon, sir, it is as well known as any point of history whatever. Some years of prosperity had created a spawn of country banks, most of them resting on no basis; these had inflated the circulation with their paper. A panic and a collapse of this fictitious currency was as inevitable as the fall of a stone forced against nature into the air."

"There were a great many petty banks, Richard, and, of course, plenty of bad paper. I believe you are right. The causes of things were not studied in those days as they are now."

"All that we know now, sir, is to be found in books written long before 1793."

"Books! books!"

"Yes, sir; a book is not dead paper except to sleepy minds. A book is a man giving you his best thoughts in his very best words. It is only the shallow reader that can't learn life from genuine books. I'll back him who studies them against the man who skims his fellow-creatures, and vice versa. A single page of Adam Smith, studied, understood, and acted on by the statesmen of your day, would have averted the panic of 1793. I have the paragraph in my note-book. He was a great man, sir; oblige me, Mr. Skinner."

"Certainly, sir, certainly. 'Should the circulation of paper exceed the value of the gold and silver of which it supplies the place, many people would immediately perceive they had more of this paper than was necessary for transacting their business at home; and, as they could not send it abroad, bank paper only passing current where it is issued, there would be a run upon the banks to the extent of this superfluous paper.'"

Richard Hardie resumed. "We were never so overrun with rotten banks as now. Shoemakers, cheesemongers, grocers, write up 'Bank' over one of their windows, and deal their rotten paper by the foolscap ream. The issue of their larger notes is colossal, and renders a panic inevitable soon or late; but, to make it doubly sure, they have been allowed to utter 1 pound and 2 pound notes. They have done it, and on a frightful scale. Then, to make it trebly sure, the just balance between paper and specie is disturbed in the other scale as well as by foreign loans to be paid in gold. In 1793 the candle was left unsnufled, but we have lighted it at both ends and put it down to roast. Before the year ends, every sovereign in the banks of this country may be called on to cash 30 pounds of paper--bank-paper, share-paper, foolscap-paper, waste-paper. In 1793, a small excess of paper over specie had the power to cause a panic and break some ninety banks; but our excess of paper is far larger, and with that fatal error we have combined foreign loans and three hundred bubble companies. Here, then, meet three bubbles, each of which, unaided, secures a panic. Events revolve, gentlemen, and reappear at intervals. The great French bubble of 1719 is here to-day with the addition of two English tom-fooleries, foreign loans and 1 pound notes. Mr. Law was a great financier. Mr. Law was the first banker and the greatest. All mortal bankers are his pupils, though they don't know it. Mr. Law was not a fool; his critics are. Mr. Law did not commit one error out of six that are attributed to him by those who judge him without reading, far less studying, his written works. He was too sound and sober a banker to admit small notes. They were excluded from his system. He found France on the eve of bankruptcy; in fact, the state had committed acts of virtual bankruptcy. He saved her with his bank.

"Then came his two errors, one remedial, the other fatal. No. 1, he created a paper company and blew it up to a bubble. When the shares had reached the skies, they began to come down, like stones, by an inevitable law. No. 2, to save them from their coming fate, he propped them with his bank. Overrating the power of governments, and underrating Nature's, he married the Mississippi shares (at forty times their value) to his banknotes by edict. What was the consequence? The bank paper, sound in itself, became rotten by marriage. Nothing could save the share-paper. The bank paper, making common cause with it, shared its fate. Had John Law let his two tubs each stand on its own bottom, the shares would have gone back to what they came from--nothing; the bank, based as it was on specie, backed stoutly by the government, and respected by the people for great national services, would have weathered the storm and lasted to this day. But he tied his rickety child to his healthy child, and flung them into a stormy sea, and told them to swim together: they sank together. Now observe, sir, the fatal error that ruined the great financier in 1720 is this day proposed to us. We are to connect our bank with bubble companies by the double tie of loans and liability. John Law was sore tempted. The Mississippi Company was his own child as well as the bank. Love of that popularity he had drunk so deeply, egotism, and parental partiality, combined to obscure that great man's judgment. But, with us, folly stands naked on one side, bubbles in hand--common sense and printed experience on the other. These six specimen bubbles here are not our children. Let me see whose they are, aliases excepted."

"Very good, young gentleman, very good. Now it is my turn. I have got a word or two to say on the other side. The journals, which are so seldom agreed, are all of one mind about these glorious times. Account for that!"

"How can you know their minds, sir?"

"By their leading columns."

"Those are no clue."

"What! Do they think one thing and print another? Why should the independent press do that? Nonsense."

"Why, sir? Because they are bribed to print it, but they are not bribed to think it."

"Bribed? The English press bribed?"

"Oh, not directly, like the English freeman. Oblige me with a journal or two, no matter which; they are all tarred with the same stick in time of bubble. Here, sir, are 50 pounds worth of bubble advertisements, yielding a profit of say 25 pounds on this single issue. In this one are nearer 100 pounds worth of such advertisements. Now is it in nature that a newspaper, which is a trade speculation, should say the word that would blight its own harvest? This is the oblique road by which the English press is bribed. These leaders are mere echoes of to-day's advertisement sheet, and bidders for to-morrow's."

"The world gets worse every day, Skinner."

"It gets no better," replied Richard, philosophically.

"But, Richard, here is our county member, and ----, staid, sober men both, and both have pledged their honor on the floor of the House of Commons to the sound character of some of these companies."

"They have, sir; but they will never redeem the said honor, for they are known to be bribed, and not obliquely, by those very companies." (The price current of M. P. honor, in time of bubble, ought to be added to the works of arithmetic.) "Those two Brutuses get 500 pounds apiece per annum for touting those companies down at Stephen's. ---- goes cheaper and more oblique. He touts, in the same place, for a gas company, and his house in the square flares from cellar to garret, gratis."

"Good gracious! and he talked of the light of conscience in his very last speech. But this cannot apply to all. There is the archbishop; he can't have sold his name to that company."

"Who knows? He is over head and ears in debt."

"But the duke, he can't have."

"Why not? He is over head and ears in debt. Princes deep in debt by misconduct, and bishops deep in ditto by ditto, are half-honest, needy men; and half-honest, needy men are all to be bought and sold like hogs in Smithfield, especially in time of bubble."

"What is the world come to!"

"What it was a hundred years ago."

"I have got one pill left for him, Skinner. Here is the Chancellor of the Exchequer, a man whose name stands for caution, has pronounced a panegyric on our situation. Here are his words quoted in this leader; now listen: 'We may safely venture to contemplate with instructive admiration the harmony of its proportions and the solidity of its basis.' What do you say to that?"

"I say it is one man's opinion versus the experience of a century. Besides, that is a quotation, and may be a fraudulent one."

"No, no. The speech was only delivered last Wednesday: we will refer to it. Mum! mum! Ah, here it is. 'The Chancellor of the Exchequer rose and--' mum! mum! ah--'I am of--o-pinion that--if, upon a fair review of our situation, there shall appear to be nothing hollow in its foundation, artificial in its superstructure, or flimsy in its general results, we may safely venture to contemplate with instructive admiration the harmony of its proportions and the solidity of its basis.'"

"Ha! ha! ha! I quite agree with cautious Bobby. If it is not hollow, it may be solid; if it is not a gigantic paper balloon, it may be a very fine globe, and vice versa, which vice versa he in his heart suspects to be the truth. You see, sir, the mangled quotation was a swindle, like the flimsy superstructures it was intended to prop. The genuine paragraph is a fair sample of Robinson, and of the art of withholding opinion by means of expression. But as quoted, by a fraudulent suppression of one half, the unbalanced half is palmed off as a whole, and an indecision perverted into a decision. I might just as fairly cite him as describing our situation to be 'hollow in its basis, artificial in its superstructure, flimsy in its general result.' Since you value names, I will cite you one man that has commented on the situation; not, like Mr. Robinson, by misty sentences, each neutralizing the other, but by consistent acts: a man, gentlemen, whose operations have always been numerous and courageous in less prosperous times, yet now he is out of everything but a single insurance company."

"Who is the gentleman?"

"It is not a gentleman; it is a blackguard," said the exact youth.

"You excite my curiosity. Who is the capitalist, then, that stands aloof?"

"Nathan Meyer Rothschild."

"The devil."

Old Skinner started sitting. "Rothschild hanging back. Oh, master, for Heavens sake don't let us try to be wiser than those devils of Jews. Mr. Richard, I bore up pretty well against your book-learning, but now you've hit me with a thunderbolt. Let us get in gold, and keep as snug as mice, and not lend one of them a farthing to save them from the gallows. Those Jews smell farther than a Christian can see. Don't let's have any more 1793's, sir, for Heaven's sake. Listen to Mr. Richard; he has been abroad, and come back with a head."

"Be quiet, Skinner. You seem to possess private information, Richard."

"I employ three myrmidons to hunt it; it will be useful by and by."

"It may be now. Remark on these proposals."

"Well, sir, two of them are based on gold mines, shares at a fabulous premium. Now no gold mine can be worked to a profit by a company. Primo: Gold is not found in veins like other metals. It is an abundant metal made scarce to man by distribution over a wide surface. The very phrase gold mine is delusive. Secundo: Gold is a metal that cannot be worked to a profit by a company for this reason: workmen will hunt it for others so long as the daily wages average higher than the amount of metal they find per diem; but, that Rubicon once passed, away they run to find gold for themselves in some spot with similar signs; if they stay, it is to murder your overseers and seize your mine. Gold digging is essentially an individual speculation. These shares sell at 700 pounds apiece; a dozen of them are not worth one Dutch tulip-root. Ah! here is a company of another class, in which you have been invited to be director; they would have given you shares and made you liable." Mr. Richard consulted his note-book. "This company, which 'commands the wealth of both Indies'--in perspective--dissolved yesterday afternoon for want of eight guineas. They had rented offices at eight guineas a week, and could not pay the first week. 'Turn out or pay,' said the landlord, a brute absorbed in the present, and with no faith in the glorious future. They offered him 1,500 pounds worth of shares instead of his paltry eight guineas cash. On this he swept his premises of them. What a godsend you would have been to these Jeremy Diddlers, you and the ten thousand they would have bled you of."

The old banker turned pale.

"Oh, that is nothing new, sir. 'To-morrow the first lord of the treasury calls at my house, and brings me 11,261 pounds 14s. 11 3/4d., which is due to me from the nation at twelve of the clock on that day; you couldn't lend me a shilling till then, could ye?' Now for the loans. Baynes upon Haggart want 2,000 pounds at 5 per cent."

"Good names, Richard, surely," said old Hardie, faintly.

"They were; but there are no good names in time of bubble. The operations are so enormous that in a few weeks a man is hollowed out and his frame left standing. In such times capitalists are like filberts; they look all nut, but half of them are dust inside the shell, and only known by breaking. Baynes upon Haggart, and Haggart upon Baynes, the city is full of their paper. I have brought some down to show it to you. A discounter, who is a friend of mine, did it for them on a considerable scale at thirty per cent discount (cast your eye over these bills, Haggart on Baynes). But he has burned his fingers even at that, and knows it. So I am authorized to offer all these to you at fifty per cent discount."

"Good heavens! Richard!"

"If, therefore, you think of doing rotten apple upon rotten pear, otherwise Haggart upon Baynes, why do it at five per cent when it is to be had by the quire at fifty?"

"Take them out of my sight," said old Hardie, starting up--"take them all out of my sight. Thank God I sent for you. No more discussion, no more doubt. Give me your hand, my son; you have saved the bank!"

The conference broke up with these eager words, and young Skinner retired swiftly from the keyhole.

The next day Mr. Hardie senior came to a resolution which saddened poor old Skinner. He called the clerks in and introduced them to Mr. Richard as his managing partner.

"Every dog has his day," said the old gentleman. "Mine has been a long one. Richard has saved the bank from a fatal error; Richard shall conduct it as Hardie & Son. Don't be disconsolate, Skinner; I'll look in on you now and then."

Hardie junior sent back all the proposals with a polite negative. He then proceeded on a two-headed plan. Not to lose a shilling when the panic he expected should come, and to make 20,000 pounds upon its subsiding. Hardie & Son held Exchequer bills on rather a large scale. They were at half a crown premium. He sold every one and put gold in his coffers. He converted in the same way all his other securities except consols. These were low, and he calculated they would rise in any general depreciation of more pretentious investments. He drew out his balance, a large one, from his London correspondent, and put his gold in his coffers. He drew a large deposit from the Bank of England. Whenever his own notes came into the bank, he withdrew them from circulation. "They may hop upon Hardie & Son," said he, "but they shan't run upon us, for I'll cut off their legs and keep them in my safe."

One day he invited several large tradesmen in the town to dine with him at the bank. They came full of curiosity. He gave them a luxurious dinner, which pleased them. After dinner he exposed the real state of the nation, as he understood it. They listened politely, and sneered silently, but visibly. He then produced six large packets of his banknotes; each packet contained 3,000 pounds. Skinner, then present, enveloped these packets in cartridge-paper, and the guests were requested to seal them up. This was soon done. In those days a bunch of gigantic seals dangled and danced on the pit of every man's stomach. The sealed packets went back into the safe.

"Show us a sparkle o' gold, Mr. Richard," said Meredith, linen-draper and wag.

"Mr. Skinner, oblige me by showing Mr. Meredith a little of your specie--a few anti-bubble pills, eh! Mr. Meredith."

Omnes. "Ha! ha! ha!"

Presently a shout from Meredith: "Boys, he has got it here by the bushel. All new sovereigns. Don't any of ye be a linen-draper, if you have got a chance to be a banker. How much is there here, Mr. Richard?"

"We must consult the books to ascertain that, sir."

"Must you? Then just turn your head away, Mr. Richard, and I'll put in a claw."

Omnes. "Haw! haw! ho!"

Richard Hardie resumed. "My precautions seem extravagant to you now, but in a few months you will remember this conversation, and it will lead to business." The rest of the evening he talked of anything, everything, except banking. He was not the man to dilute an impression.

Hardie junior was so confident in his reading and his reasonings that he looked every day into the journals for the signs of a general collapse of paper and credit; instead of which, public confidence seemed to increase, not diminish, and the paper balloon, as he called it, dilated, not shrank; and this went on for months. His gold lay a dead and useless stock, while paper was breeding paper on every side of him. He suffered his share of those mortifications which every man must look to endure who takes a course of his own, and stems a human current. He sat somber and perplexed in his bank parlor, doing nothing; his clerks mended pens in the office. The national calamity so confidently predicted, and now so eagerly sighed for, came not.

In other words, Richard Hardie was a sagacious calculator, but not a prophet; no man is till afterward, and then nine out of ten are. At last he despaired of the national calamity ever coming at all. So then, one dark November day, an event happened that proved him a shrewd calculator of probabilities in the gross, and showed that the records, of the past, "studied" instead of "skimmed," may in some degree counterbalance youth and its narrow experience. Owing to the foreign loans, there were a great many bills out against this country. Some heavy ones were presented, and seven millions in gold taken out of the Bank of England and sent abroad. This would have trickled back by degrees; but the suddenness and magnitude of the drain alarmed the bank directors for the safety of the bank, subject as it was by Mr. Peel's bill to a vast demand for gold.

Up to this period, though they had amassed specie themselves, they had rather fed the paper fever in the country at large, but now they began to take a wide and serious view of the grave contingencies around them. They contracted their money operations, refused in two cases to discount corn, and, in a word, put the screw on as judiciously as they could. But time was up. Public confidence had reached its culminating point. The sudden caution of the bank could not be hidden; it awoke prudence, and prudence after imprudence drew terror at its heels. There was a tremendous run upon the country banks. The smaller ones "smashed all around like glass bottles," as in 1793; the larger ones made gigantic and prolonged efforts to stand, and generally fell at last.

Many, whose books showed assets 40s. in the pound, suspended payment; for in a violent panic the bank creditors can all draw their balances in a few hours or days, but the poor bank cannot put a similar screw on its debtors. Thus no establishment was safe. Honor and solvency bent before the storm, and were ranked with rottenness; and, as at the same time the market price of securities sank with frightful rapidity, scarcely any amount of invested capital was safe in the unequal conflict.

Exchequer bills went down to 60s. discount, and the funds rose and fell like waves in a storm.

London bankers were called out of church to answer dispatches from their country correspondents.

The Mint worked day and night, and coined a hundred and fifty thousand sovereigns per diem for the Bank of England; but this large supply went but a little way, since that firm had in reality to cash nearly all the country notes that were cashed.

Post-chaises and four stood like hackney-coaches in Lombard Street, and every now and then went rattling off at a gallop into the country with their golden freight. In London, at the end of a single week, not an old sovereign was to be seen, so fiercely was the old coinage swept into the provinces, so active were the Mint and the smashers; these last drove a roaring trade; for paper now was all suspected, and anything that looked like gold was taken recklessly in exchange.

Soon the storm burst on the London banks. A firm known to possess half a million in undeniable securities could not cash them fast enough to meet the checks drawn on their counter, and fell. Next day, a house whose very name was a rock suspended for four days. An hour or two later two more went hopelessly to destruction. The panic rose to madness. Confidence had no longer a clue, nor names a distinction. A man's enemies collected three or four vagabonds round his door, and in another hour there was a run upon him, that never ceased till he was emptied or broken. At last, as, in the ancient battles, armies rested on their arms to watch a duel in which both sides were represented, the whole town watched a run upon the great house of Pole, Thornton & Co. The Bank of England, from public motives, spiced of course with private interest, had determined to support Pole, Thornton & Co., and so perhaps stem the general fury, for all things have their turning-point. Three hundred thousand pounds were advanced to Pole & Co., who with this aid and their own resources battled through the week, but on Saturday night were drained so low that their fate once more depended on the Bank of England. Another large sum was advanced them. They went on; but, ere the next week ended, they succumbed, and universal panic gained the day.

Climax of all, the Bank of England notes lost the confidence of the public, and a frightful run was made on it. The struggle had been prepared for, and was gigantic on both sides. Here the great hall of the bank, full of panic-stricken citizens jostling one another to get gold for the notes of the bank; there, foreign nations sending over ingots and coin to the bank, and the Mint working night and day, Sunday and week-day, to turn them into sovereigns to meet the run. Sovereigns or else half-sovereigns were promptly delivered on demand. No hesitation or sign of weakness peeped out; but under this bold and prudent surface, dismay, sickness of heart, and the dread of a great humiliation. At last, one dismal evening, this establishment, which at the beginning of the panic had twenty millions specie, left off with about five hundred thousand pounds in coin, and a similar amount in bullion. A large freight of gold was on the seas, coming to their aid, and due, but not arrived; the wind was high; and in a few hours the people would be howling round their doors again. They sent a hasty message to the government, and implored them to suspend, by order in council, the operation of Mr. Peel's bill for a few days. A plump negative from Mr. Canning.

Then, being driven to expedients, they bethought them of a chest of 1 pound notes that they had luckily omitted to burn.

Another message to the government, "May we use these?"

"As a temporary expedient, yes."

The one-pound notes were whirling all over the country before daybreak, and, marvelous anomaly, which took Richard Hardie by surprise, they oiled the waves, the panic abated from that hour. The holders of country notes took the 1 pound B. E. notes as cash with avidity. The very sight of them piled on a counter stopped a run in more than one city.

The demand for gold at the Bank of England continued, but less fiercely; and as the ingots still came tumbling in, and the Mint hailed sovereigns on them, their stock of specie rose as the demand declined, and they came out of their fiercest battle with honor. But, ere the tide turned, things in general came to a pass scarcely known in the history of civilized nations. Ladies and gentlemen took heirlooms to the pawnbrokers', and swept their tills of the last coin. Not only was wild speculation, hitherto so universal and ardent, snuffed out like a candle, but investment ceased and commerce came to a stand-still. Bank stock, East India stock, and, some days, consols themselves, did not go down; they went out, were blotted from the book of business. No man would give them gratis; no man would take them on any other terms. The brokers closed their books; there were no buyers nor sellers. Trade was coming to the same pass, except the retail business in eatables; and an observant statesman and economist, that watched the phenomenon, pronounced that in forty-eight hours more all dealings would have ceased between man and man, or returned to the rude and primitive form of barter, or direct exchange of men's several commodities, labor included.

Finally, things crept into their places; shades of distinction were drawn between good securities and bad. Shares were forfeited, companies dissolved, bladders punctured, balloons flattened, bubbles burst, and thousands of families ruined--thousands of people beggared--and the nation itself, its paper fever reduced by a severe bleeding, lay sick, panting, exhausted, and discouraged for a year or two to await the eternal cycle--torpor, prudence, health, plethora, blood-letting; torpor, prudence, health, plethora, bloodletting, etc., etc., etc., etc., in secula seculorum.

The journals pitched into "speculation."

Three banks lay in the dust in the town of ----, and Hardie & Son stood looking calmly down upon the ruins.

Richard Hardie had carried out his double-headed plan.

There was no run upon him--could not be one in the course of nature, his balances were so low, and his notes were all at home. He created artificially a run of a very different kind. He dined the same party of tradesmen--all but one, who could not come, being at supper after Polonius his fashion. After dinner he showed the packets still sealed, and six more unsealed. "Here, gentlemen, is our whole issue." There was a huge wood fire in the old-fashioned room. He threw a packet of notes into it. A most respectable grocer yelled and lost color: victim of his senses, he thought sacred money was here destroyed, and his host a well-bred, and oh! how plausible, maniac. The others derided him, and packet after packet fed the flames. When two only were left, containing about five thousand pounds between them, Hardie junior made a proposal that they should advertise in their shop windows to receive Hardie's five-pound notes as five guineas in payment for their goods. Observing a natural hesitation, he explained that they would by this means, crush their competitors, and could easily clap a price on their goods to cover the odd shillings. The bargain was soon struck. Mr. Richard was a great man. All his guests felt in their secret souls and pockets--excuse the tautology--that some day or other they should want to borrow money of him. Besides, "crush their competitors!"

Next day Mr. Richard loosed his hand and let a flock of his own bank-notes fly (they were asked for earnestly every day). Some soon found their way to the shops in question. The next day still more took wing and buzzed about the shops. Presently other tradesmen, finding people rushed to the shops in question, began to bid against them for Hardie's notes, a result the long-headed youth had expected; and said notes went up to ten shillings premium. Too calm and cold to be betrayed into deserting his principles, he confined the issue within the bounds he had prescribed, and when they were all out seldom saw one of them again. By this means he actually lowered the Bank of England notes in public estimation, and set his own high above them in the town of ----. Deposits came in. Confidence unparalleled took the place of fear so far as he was concerned, and he was left free to work the other part of his plan.

To the amazement and mystification of old Skinner, he laid out ten thousand pounds in Exchequer bills, and followed this up by other large purchases of paper, paper, nothing but paper.

Hardie senior was nervous.

"Are you true to your own theory, Richard?"

The youth explained to him that blind confidence always ends in blind distrust. and then all paper becomes depreciated alike, but good paper is sure to recover. "Sixty-two shillings discount, sir, is a ridiculous decline of Exchequer bills. We are at peace, and elastic, and the government is strong. My other purchases all rest upon certain information, carefully and laboriously amassed while the world was so busy blowing bubbles. I am now buying paper that is unjustly depreciated in Panic, i.e., in the second act of that mania of which Bubble is the first act." He added: "When the herd buy, the price rises; when they sell, it falls. To buy with them and sell with them is therefore to buy dear and sell cheap. My game--and it is a game that reduces speculation to a certainty--is threefold:

"First, never, at any price or under any temptation, buy anything that is not as good as gold.

"Secondly, buy that sound article when the herd sells it.

"Thirdly, sell it when the herd buys it."

"Richard," said the old man, "I see what it is--you are a genius."


"It is no use your denying it, Richard."

"Common sense, sir, common sense."

"Yes, but common sense carried to such a height as you do is genius."

"Well, sir, then I own to the genius of common sense."

"I admire you, Richard--I am proud of you; but the bank has stood one hundred and forty years, and never a genius in it;" the old man sighed.

Hardie senior, having relieved his mind of this vague misgiving, never returned to it--probably never felt it again. It was one of those strange flashes that cross a mind as a meteor the sky.

The old gentleman, having little to do, talked more than heretofore, and, like fathers, talked about his son, and, unlike sons, cried him up at his own expense. The world is not very incredulous; above all, it never disbelieves a man who calls himself a fool. Having then gained the public ear by the artifice of self-depreciation, he poured into it the praises of Hardie junior. He went about telling how he, an old man, was all but bubbled till this young Daniel came down and foretold all. Thus paternal garrulity combined for once with a man's own ability to place Richard Hardie on the pinnacle of provincial grandeur.

A few years more and Hardie senior died. (His old clerk, Skinner, followed him a month later.)

Richard Hardie, now sole partner and proprietor, assumed a mode of living unknown to his predecessors. He built a large, commodious house, and entertained in the first style. The best families in the neighborhood visited a man whose manner was quiet and stately, his income larger than their own, and his house and table luxurious without vulgar pretensions, and the red-hot gilding and glare with which the injudicious parvenu brands himself and furniture.

The bank itself put on a new face. Twice as much glass fronted the street, and a skylight was let into the ceiling: there were five clerks instead of three; the new ones at much smaller salaries than the pair that had come down from antiquity.