at three hundred per cent. Two millions and a quarter were taken, and the market price at one reached three hundred and forty– double the first instalment according to the terms of payment. To set out handsomely, the Court voted a dividend of ten per cent upon South Sea Stock, being only a half-yearly dividend, payable at midsummer 1720. To enable persons to hold, they also offered to lend half a million on security of their own stock; and afterwards increased the amount to a million, or nearly so. These bold steps gained the whole affair such an increase of credit, that, upon a bare notice that certain irredeemable annuities would be received for stock, upon terms hereafter to be settled, numbers of annuitants deposited their securities at the South Sea House, without knowing the terms! About June, when the first half-yearly dividend was becoming due, the frenzy rose to such a pitch, that the stock was sold at eight hundred and ninety per cent. This extravagance, however, made so many sellers, that the price suddenly fell, and uneasiness began to be manifested; when the Directors had the inconceivable audacity to propose to create new stock at one thousand per cent, to be paid in ten instalments of one hundred pounds each. Strange to relate, this desperate villany turned the tide again, and, to use the words of Anderson, 'in a few days the hundred pound instalment was worth four hundred!'"
We invariably find that the success, whether real or pretended, of any one scheme, gives rise to a host of imitations. If any new company, whatever be its object, is started, and the shares are selling at a premium, we may look with perfect confidence for the announcement of six or seven others before as many days have elapsed. This is, of course, partly owing to the cupidity of the public; but that cupidity could not manifest itself so soon in a tangible form, but for the machinations of certain parties, who see their way to a profit whatever may be the result of the speculation. Amidst the ruin and desolation which invariably follow those seasons of infuriated and infatuated gambling, to which we are now almost habituated, such men preserve a tranquil and a calm demeanour. And no wonder: they have reaped the harvest which the folly of others has sown. At the hottest and most exciting period of the game, they have their senses as completely under control as the sharper who has deliberately dined on chicken and lemonade, with the prospect of encountering afterwards an inebriated victim at Crockford's. They may play largely, but they only do so while their hand is safe; the moment luck changes, they sell out, and leave the whole loss to be borne by the unfortunate dupes, who, believing in their deliberate falsehoods, still continue to hold on, trusting to the advent of those fabulous better times which, in their case, never can arrive. It has been so in our own times, and it was so when the South Sea bubble was expanding on its visionary basis. Multitudes of minor schemes were projected, subscribed for, and driven up to an exorbitant premium. The shares of really solid companies participated in the rise, and mounted correspondingly in the market. The nominal value of all the sorts of stock then afloat was computed at no less than five hundred millions; being exactly double the estimated value of the whole lands, houses, and real property in the kingdom!
The collapse came, and brought ruin to thousands who thought that they held fortune within their grasp. The history of the downfall is not less suggestive than that of the rapid rise. It has had its parallel in our days, when the most rotten and unsubstantial of companies have brazened out their frauds to the last, doctored accounts, declared fictitious dividends, and threatened with legal prosecution those who had the courage and the honesty to expose them.
"The minor bubbles burst first, when the South Sea schemers were foolish enough to apply for a scire facias against their projectors, on the ground that their schemes injured the credit of the grand scheme. This turned quondam allies into furious enemies. The scire facias was issued on 13th August 1720, when the downfall began; and Mr Hutchison saw his predictions completely fulfilled. The South Sea villains, in sheer desperation, declared a half-yearly dividend of thirty per cent due at Christmas, and offered to guarantee fifty per cent per annum for twelve years! They might as well have declared it for the thirtieth of February. Everything was done to prop the reputation of the directors, but all was in vain; and when the stock fell at last to one hundred and seventy-five, a panic ensued, and all went to the ground together, totally ruining thousands, and nearly dragging the Bank and East India Company along with it."
Mr Francis gives us some interesting anecdotes of the casualties arising from this gigantic scheme of imposture. Gay, the author of the Beggar's Opera, was a holder of stock, and at one time might have sold out with a profit of twenty thousand pounds – an opportunity very rarely vouchsafed to a poet. In spite of shrewd advice, he neglected his chance, and lost every penny. One Hudson, a native of Yorkshire, who had succeeded to a large fortune, went deeply into the scheme. From a millionnaire he became a beggar and insane, and wandered through the streets of London a pitiable object of charity. But it would be work, of supererogation to multiply instances of similar calamity. They are reproduced over and over again at the conclusion of every fit of wild and reckless speculation; and yet the warning, terrible as it is, seems to have no effect in restraining the morbid appetite.
It would, we apprehend, be impossible to find any one who will advocate gambling upon principle; though a multitude of excellent persons, who would shrink with horror were the odious epithet applied to them, are, nevertheless, as much gamblers as if they were staking their money at rouge-et-noir or roulette. The man who buys into a public stock with the intention of selling in a week or a fortnight, in the expectation of doing so at an advanced price, or the other who sells shares which he does not possess, in the confident belief of a speedy fall, is, in everything save decency of appearance, on a par with the haunter of the casino. He may, if he so pleases, designate himself an investor, but, in reality, he is a common gamester. This may be a hard truth, but it is a wholesome one, and it cannot be too often repeated, at a time when general usage, and yielding to temptation, have perverted words from their ordinary significance, and led many of us to justify transactions which, when tried by the standard of morality, and stripped of their disguise, ought to be unhesitatingly condemned. "He that loveth gold shall not be justified," said the son of Sirach. "Many have sinned for a small matter; and he that seeketh for abundance will turn his eyes away. As a nail sticketh fast between the joinings of the stones, so doth sin stick close between buying and selling." This spirit, when it becomes general in the nation, cannot be otherwise than most hurtful to its welfare, since it diverts the thoughts of many from those industrial pursuits which are profitable to themselves and others, and leads them astray from that honourable and upright course which is the sure and only road to wealth, happiness, and esteem. This has been, to a certain extent, acknowledged by government, even within our own time. The pernicious effect of the lotteries, originally, a state device, upon the morals and condition of the lower classes, as testified by the vast increase of crime, became at length so glaring, that these detestable engines of fraud were suppressed by act of parliament. They still linger on the Continent, as most of us have reason to know from the annual receipt of documents, copiously circulated by the Jews of Hamburg and Frankfort, offering us, in exchange for a few florins, the chance of becoming proprietors of several chateaux on the Rhine, with boar-forests, mineral springs, vineyards, and other appurtenances. We presume, from the continuity of the circulars, that Israel still finds its dupes; but we never happened, save in one of Charles Lever's novels, to hear of any person lucky enough to stumble on the ticket which secured the right to Henkersberg, Bettlersbad, or Narrenstein. The extent to which lottery gambling was carried in this country seems to us absolutely incredible. Derby sweeps were nothing to it.
"In 1772," says Mr Francis, "lottery magazine proprietors, lottery tailors, lottery staymakers, lottery glovers, lottery hatmakers, lottery tea merchants, lottery barbers – where a man, for being shaved and paying threepence, stood a chance of receiving £10; lottery shoeblacks, lottery eating-houses – where, for sixpence, a plate of meat and the chance of 60 guineas were given; lottery oyster-stalls – where threepence gave a supply of oysters, and a remote chance of five guineas, were plentiful; and, to complete a catalogue which speaks volumes, at a sausage-stall, in a narrow alley, was the important intimation written up, that, for one farthing's worth of sausages, the fortunate purchaser might realise a capital of five shillings. Quack doctors, a class which formed so peculiar a feature in village life of old, sold medicine at a high price, giving those who purchased it tickets in a lottery purporting to contain
