Stock Exchange.]

ROTHSCHILD OVERREACHED.

483

As soon as Rothschild was gone,

Lucas began to recover, and by degrees was able to get up, though distracted, as he said, "with a violent headache," and insisted, in spite of the housekeeper's expostulations, upon going home. But Lucas went to his broker, and instructed him to buy up all the stock he could get by ten o'clock the following morning. About eleven o'clock Lucas met Rothschild, and inquired satirically how he, Rothschild, was off for stock. Lucas won the day, and Rothschild is said never to have forgiven "the base, dishonest, and nefarious stratagem."

knew Rothschild well, will illustrate the above go himself.
statement. When the Hebrew financier lived at
Stamford Hill, there resided opposite to him another
very wealthy dealer in the Stock Exchange, Lucas
by name. The latter returning home one night
at a late hour from a convivial party, observed a
carriage and four standing before Rothschild's gate,
upon which he ordered his own carriage out of
the way, and commanded his coachman to await
in readiness his return. Lucas went stealthily and
watched, unobserved, the movements at Rothschild's
gate. He did not lie long in ambush before he
heard some one leaving the Hebrew millionnaire's
mansion, and going towards the carriage. He saw
Rothschild, accompanied by two muffled figures,
step into the carriage, and heard the word of com-
mand, "To the City." He followed Rothschild's
carriage very closely, but when he reached the top
of the street in which Rothschild's office was
situated, Lucas ordered his carriage to stop, from
which he stepped out, and proceeded, reeling to
and fro through the street, feigning to be mortally
drunk. He made his way in the same mood as
far as Rothschild's office, and sans cérémonie opened
the door, to the great consternation and terror of
the housekeeper, uttering sundry ejaculations in
the broken accents of Bacchus' votaries. Heed-
less of the affrighted housekeeper's remonstrances,
he opened Rothschild's private office, in the same
staggering attitude, and fell down flat on the floor.
Rothschild and his friends became very much
alarmed. Efforts were made to restore and remove
the would-be drunkard, but Lucas was too good an
actor, and was therefore in such a fit as to be unable
to be moved hither or thither. "Should a physician
be sent for?" asked Rothschild. But the house-
keeper threw some cold water into Lucas's face,
and the patient began to breathe a little more natu-
rally, and fell into a sound snoring sleep. He was
covered over, and Rothschild and the strangers pro-
ceeded unsuspectingly to business. The strangers
brought the good intelligence that the affairs in
Spain were all right, respecting which the members
of the Exchange were, for a few days previous, very
apprehensive, and the funds were therefore in a
rapidly sinking condition. The good news could
not, however, in the common course of despatch,
be publicly known for another day. Rothschild
therefore planned to order his brokers to buy up,
cautiously, all the stock that should be in the
market by twelve o'clock the following day. He
sent for his principal broker thus early, in order to
entrust him with the important instruction.

The broker was rather tardier than Rothschild's patience could brook; he therefore determined to

Yet, with all his hoardings, says Mr. Margoliouth, Rothschild was by no means a happy man. Dangers and assassinations seemed to haunt his ima gination by day and by night, and not without grounds. Many a time, as he himself said, just before he sat down to dinner, a note would be put into his hand, running thus :-" "If you do not send me immediately the sum of five hundred pounds, I will blow your brains out." He affected to despise such threats; they, nevertheless, exercised a direful effect upon the millionnaire. He loaded his pistols every night before he went to bed, and put them beside him. He did not think himself more secure in his country house than he did in town. One day, while busily engaged in his golden occupation, two foreign gentlemen were announced as desirous to see Baron Rothschild in propriâ personâ. The strangers had not the foresight to have the letters of introduction in readiness. They stood, therefore, before the Baron in the ludicrous attitude of having their eyes fixed upon the Hebrew Croesus, and with their hands rummaging in large European coatpockets. The fervid and excited imagination of the Baron conjured up a multitudinous array of conspiracies. Fancy eclipsed his reason, and, in a fit of excitement, he seized a huge ledger, which he aimed and hurled at the mustachioed strangers, calling out, at the same time, for additional physical force. The astonished Italians, however, were not long, after that, in finding the important documents they looked for, which explained all. The Baron begged the strangers' pardon for the unintentional insult, and was heard to articulate to himself, "Poor unhappy me! a victim to nervousness and fancy's terrors! and all because of my money!"

Rothschild's mode of doing business when engaging in large transactions (says Mr. Grant) was this. Supposing he possessed exclusively, which he often did, a day or two before it could be generally known, intelligence of some event, which had occurred in any part of the Continent, sufficiently important to cause a rise in the French funds, and through them on the English funds, he would em

ferred to the name of the party advancing the money, Rothschild's object being to raise the price of Consols by carrying so large a quantity out of the market. The money was lent, and the conditions of the loan were these-that the interest on the sum advanced should be at the rate of 4 per cent., and that if the price of Consols should chance to go down to 74, Mr. should have the right of claiming the stock at 70. The Jew, no doubt, laughed at what he conceived his own commercial dexterity in the transaction; but, ere long, he had abundant reason to laugh on the wrong side of his mouth; for, no sooner was the stock poured into the hand of the banker, than the latter sold it, along with an immensely large sum which had been previously standing in his name, amounting altogether to little short of £3,000,000. But even this was not all. Mr. also held powers of attorney

from several of the leading Scotch and English banks, as well as from various private individuals, who had large property in the funds, to sell stock on their account. On these powers of attorney he acted, and at the same time advised his friends to follow his example. They at once did so, and the consequence was that the aggregate amount of stock sold by himself and his friends conjointly exceeded £10,000,000. So unusual an extent of sales, all effected in the shortest possible time, necessarily drove down the prices. In an incredibly short time they fell to 74; immediately on which, Mr. claimed of Rothschild his stock

power the brokers he usually employed to sell out time 84. This stock was, of course, to be transstock, say to the amount of £500,000. The news spread in a moment that Rothschild was selling out, and a general alarm followed. Every one apprehended that he had received intelligence from some foreign part of some important event which would produce a fall in prices. As might, under such circumstances, be expected, all became sellers at once. This, of necessity, caused the funds, to use Stock Exchange phraseology, "to tumble down at a fearful rate." Next day, when they had fallen, perhaps, one or two per cent., he would make purchases, say to the amount of £1,500,000, taking care, however, to employ a number of brokers whom he was not in the habit of employing, and commissioning each to purchase to a certain extent, and giving all of them strict orders to preserve secrecy in the matter. Each of the persons so employed was, by this means, ignorant of the commission given to the others. Had it been known the purchases were made by him, there would have been as great and sudden a rise in the prices as there had been in the fall, so that he could not purchase to the intended extent on such advantageous terms. On the third day, perhaps, the intelligence which had been expected by the jobbers to be unfavourable arrived, but, instead of being so, turned out to be highly favourable. Prices instantaneously rise again, and possibly they may get one and a-half or even two per cent. higher than they were when he sold out his £500,000. He now sells out, at the advanced price, the entire £1,500,000 he had purchased at the reduced prices. The gains by such extensive transactions, when so skilfully managed, will be at once seen to be By the supposed transaction, assuming the rise to be two per cent., the gain would be £35,000. But this is not the greatest gain which the late leviathian of modern capitalists made by such transactions. He, on more than one occasion, made upwards of £100,000 on one account. But though no person during the last twelve or fifteen years of Rothschild's life (says Grant) was ever able, for any length of time, to compete with him in the money market, he on several occasions was, in single transactions, outwitted by the superior tactics of others. The gentleman to whom I allude was then and is now the head of one of the largest private banking establishments in town. Abraham Montefiore, Rothschild's brother-in-law, was the principal broker to the great capitalist, and in that capacity was commissioned by the latter to negotiate with Mr. a loan of £1,500,000. The security offered by Rothschild was a proportionate amount of stock in Consols, which were at that

at 70.

The Jew could not refuse: it was in the bond. This climax being reached, the banker bought in again all the stock he had previously sold out, and advised his friends to re-purchase also. They did so; and the result was, that in a few weeks Consols reached 84 again, their original price, and from that to 86. Rothschild's losses were very great by this transaction; but they were by no means equal to the banker's gains, which could not have been less than £300,000 or £400,000.

The following grotesque sketch of the great Rothschild is from the pen of a clever anonymous writer:-"The thing before you," says the author quoted, "stands cold, motionless, and apparently speculationless, as the pillar of salt into which the avaricious spouse of the patriarch was turned ; and while you start with wonder at what it can be or mean, you pursue the association, and think upon the fire and brimstone that were rained down. It is a human being of no very Apollolike form or face: short, squat, with its shoulders drawn up to its ears, and its hands delved into its

Stock Exchange.]

A SUCCESSFUL SPECULATION.

485

breeches'-pockets. The hue of its face is a mixture been arrested for a debt of £55, and that he was of brick-dust and saffron; and the texture seems thinking over the misery of his wife and five that of the skin of a dead frog. There is a rigidity children. Goldsmid instantly drew out his chequeand tension in the features, too, which would make book, and wrote a cheque for £100, the sight of you fancy, if you did not see that that were not which gladdened poor John's heart and brought the fact, that some one from behind was pinching tears into his eyes. On one occasion, after a it with a pair of hot tongs, and that it were either carriage accident in Somersetshire, Goldsmid was afraid or ashamed to tell. Eyes are usually de- carried to the house of a poor curate, and there nominated the windows of the soul; but here you attended for a fortnight with unremitting kindness. would conclude that the windows are false ones, or Six weeks after the millionnaire's departure a letter that there is no soul to look out at them. There came from Goldsmid to the curate, saying that, comes not one pencil of light from the interior, having contracted for a large Government loan, he neither is there one scintillation of that which (the writer) had put down the curate's name for comes from without reflected in any direction. £20,000 omnium. The poor curate, supposing The whole puts you in mind of a skin to let ;' some great outlay was expected from him for this and you wonder why it stands upright without at share in the loan, wrote back to say that he had least something within. By-and-by another figure not £20,000, or even £20, in the world. By the comes up to it. It then steps two paces aside, and next post came a letter enclosing the curate £1,500, the most inquisitive glance that ever you saw, and the profit on selling out the £20,000 omnium, the a glance more inquisitive than you would ever have premium having risen since the curate's name had thought of, is drawn out of the erewhile fixed and been put down. leaden eye, as if one were drawing a sword from a scabbard. The visiting figure, which has the appearance of coming by accident, and not by design, stops but a second or two, in the course of which looks are exchanged which, though you cannot translate, you feel must be of most important meaning. After these, the eyes are sheathed up again, and the figure resumes its stony posture. During the morning numbers of visitors come, all of whom meet with a similar reception, and vanish in a similar manner; and last of all the figure itself vanishes, leaving you utterly at a loss as to what can be its nature and functions."

Abraham Goldsmid, a liberal and honourable man, who almost rivalled Rothschild as a speculator, was ruined at last by a conspiracy. Goldsmid, in conjunction with a banking establishment, had taken a large Government loan. The leaguers contrived to produce from the collectors and receivers of the revenue so large an amount of floating securities-Exchequer Bills and India Bonds-that the omnium fell to 18 discount. The result was Goldsmid's failure, and eventually his suicide. The conspirators purchased omnium when at its greatest discount, and on the following day it went up to 3 premium, being then a profit of about £2,000,000.

Goldsmid was a most kind-hearted and generous man, not so wholly absorbed in speculation and self as some of the more greedy and vulgar members of the commercial world. One day Mr. Goldsmid observed his favourite waiter at the City of London Tavern very melancholy and abstracted. On being pressed, John confessed that he had just

Some terrible failures occurred in the Stock Exchange during the Spanish panic of 1835. A few facts connected with this disastrous time will serve excellently to illustrate the effects of such reactions among the speculators in stocks. A decline of 20 or 30 per cent. in the Peninsular securities within a week or ten days ruined many of the members. They, like card houses in a puff of wind, brought down others; so that in one short month the greater part of the Stock Exchange had fallen into difficulties. The failure of principals out of doors, who had large differences to pay, caused much of this trouble to the brokers. Men with limited means had plunged into what they considered a certain speculation, and when pay-day arrived and the account was against them, they were obliged to confess their inability to scrape together the required funds. For instance, at the time when Zumalacarregui was expected to die, a principal, a person who could not command more than £1,000,"stood," as the Stock Exchange phrase runs, to make a "pot of money" by the event. He speculated heavily, and had the Spanish partisan general good-naturedly died during the account, the commercial gambler would have certainly netted nearly £40,000. The general, however, obstinately delayed his death till the next week, and by that time the speculator was ruined, and all he had sold. Many of the dishonest speculators whose names figured on the black board in 1835 had been "bulls" of Spanish stock. When the market gave way and prices fell, the principals attempted to put off the evil day, says a writer of the period, by "carrying over instead of closing their accounts." The weather, however, grew only

connected with the Stock Exchange. Mr. Ricardo
is said to have amassed his immense fortune by a
scrupulous attention to his own golden rules :—
"Never refuse an option when you can get it;
Cut short your losses;

Let your profits run on. By the second rule, which, like the rest, is strictly technical, Mr. Ricardo meant that purchasers of stock ought to re-sell immediately prices fell. By the third he meant that when a person held stock

the more stormy, and at last, when payment could there are few names of any literary distinction no longer be evaded, they coolly turned round, and with brazen faces refused, although some of them were able to adjust the balances which their luckless brokers exhibited against them. Now a broker is obliged either to make good his principal's losses from his own pocket, or be declared a defaulter, and expelled the Stock Exchange. This rule often presses heavily, says an authority on the subject, on honest but not over opulent brokers, who transact business for other persons, and become liable if they turn out either insolvent or rogues. Brokers and prices were rising, he ought not to sell until are in most cases careful in the choice of principals prices had reached their highest, and were beginning if they speculate largely, and often adopt the pru- to fall. dent and very justifiable plan of having a certain amount of stock deposited in their "strong box" as security before any important business is undertaken. Every principal who dabbles in rickety stock without a certain reserve as a security is set down by most men as little better than a swindler. During the rumours of war which prevailed in October, 1840, shortly before the fall of the Thiers administration in France, the fluctuations in Consols were as much as 4 per cent. The result was great ruin to speculators. The speculators for the rise the "bulls," in fact of £400,000 Consols sustained a loss of from £10,000 to £15,000, for which more than one broker found it necessary, for sustaining his credit, to pay.

The amount of business done at the Stock Exchange in a day is enormous. In a few hours property, including time bargains, to the amount of £10,000,000 has changed hands. Rothschild is known in one day to have made purchases to the extent of £4,000,000. This great speculator never appeared on the Stock Exchange himself, and on special occasions he always employed a new set of brokers to buy or sell. The boldest attempt ever made to overthrow the power of Rothschild in the money market was that made by a Mr. H. He was the son of a wealthy country banker, with money-stock in his own name, though it was really his father's, to the extent of £50,000. He began by buying as openly as possible, and selling out The railway mania produced many changes in again to a very large amount in a very short period the Stock Exchange. The share market, which of time. About this time Consols were as high as previously had been occupied by only four or five 96 or 97, and there were signs of a coming panic. brokers and a number of small jobbers, now became Mr. H. determined to depress the market, and a focus of vast business. Certain brokers, it is said, carry on war against Rothschild, the leader of made £3,000 to £4,000 a day by their business. the "bulls." He now struck out a bold game. One fortunate man outside the house, who held He bought £200,000 in Consols at 96, and at largely of Churnet Valley scrip before the sanction once offered any part of £100,000 at 94, and at of the Board of Trade was procured, sold at the once found purchasers. He then offered more at best price directly the announcement was made, 93, 92, and eventually as low as 90. The next and netted by that coup£27,000. The "Alley men" day he brought them down to 74; a run on the wrote letters for shares, and when the allotments Bank of England began, which almost exhausted it were obtained made some IOS. on each share. of its specie. He then purchased to a large extent, Some of these "dabblers" are known to have made so that when the reaction took place the daring only fifty farthings of fifty shares of a railway now adventurer found his gains had exceeded £100,000 the first in the kingdom. The sellers of letters Two years after he had another "operation," but used to meet in the Royal Exchange before business Rothschild, guessing his plan, laid a trap, into which hours, till the beadle had at last to drive them away he fell, and the day after his name was posted to make room for the merchants. There is a story on the black board. It was then discovered that told of an "Alley man" during the mania contriving to sell some rotten shares by bowing to Sir Isaac Goldsmid in the presence of his victim. Sir Isaac returned the bow, and the victim at once believed in the respectability of the gay deceiver.

With the single exception of Mr. David Ricardo, the celebrated political economist, says Mr. Grant,

the original £50,000 money-stock had been in reality his father's. A deputation from the committee waited upon Mr. H. immediately after his failure, and quietly suggested to him an immediate sale of his furniture, and the mortgage of an annuity settled on his wife. He, furious at this, rang the bell for his footman, and ordered him to show the