Victorian London - Publications - Social Investigation/Journalism - Curiosities of London Life, or Phases, Physiological and Social of the Great Metropolis, by Charles Manby Smith, 1853


    What is to be done with the money which is realized in the ordinary course of affairs, has latterly become a kind of puzzle. There it goes on accumulating as a result of industry; but what then? A person can but eat one dinner in the day; two or three coats are about all lie needs for the outer man; he can but live in one house at a time; and, in short, after paying away all he needs to pay, he finds that he has got a little over for investment. Since our young days, this word investment has come remarkably into use. All are looking for investments; and as supply ordinarily follows demand, up there rise, at periodical intervals, an amazing number of plans for the said investments - in plain English, relieving people of their money. A few years ago, railways were the favourite absorbents. Railways, on a somewhat more honest principle, may possibly again have their day. Meanwhile, the man of money has opened up to him a very comprehensive field for the investment of his cash: he can send it upon any mission he chooses; he may dig turf with it, or he may dig gold; he may catch whales, or he may catch sprats, or do fifty other things; but if he see it again after having relinquished his hold upon it, he must have exercised more discretion than falls to the lot of the majority of Her Majesty's lieges in their helter-skelter steeple-chasing after twenty per cent. Our present business, however, is not with legitimate speculation, but with schemes in which no discretion is exercised, or by which discretion is set to sleep - in a word, with bubble investments; and the history of many of the most promising of these speculations may be read in the following brief and not altogether mythical biography, of an interesting specimen which suddenly fell into a declining way, and is supposed to have lately departed this life.
    The long Range Excavator Rock-Crushing and Gold-Winning Company was born from the brain of Aurophilus Dobrown, Esq., of Smallchange Dell, in the county of Middlesex, between the hours of ten and eleven at night on the 14th of October, 1851. It was at first a shapeless and unpromising bantling; but being introduced to the patronage of a conclave of experienced drynurses, it speedily became developed in form and proportion; and before it was ten days old, was formally introduced, with official garniture, to the expectant public, by whom it was received with general approbation and favour. The new company, in a dashing prospectus, held forth a certain prospect of enormous advantages to shareholders, with an entire exemption from responsibility of every sort. The shares were a million in number, at one pound each, without any further call - on the loose-cash principle, and no signing of documents. Aurophilus Dobrown was chairman of the committee of management.
    The intentions of the company, as detailed at length in their eloquent prospectus, were to invade the gold regions of the Australian continent with a monster engine, contrived by the indefatigable Crushcliff, and which, it was confidently expected, would devour the soil of the auriferous district at a rate averaging about three tons per minute. It was furnished, so the engineer averred, with a stomach of 250 tons capacity, supplied with peristaltic grinders of steel of the most obdurate temper, enabling it with ease to digest the hardest granite rocks, to crush the masses of quartz into powder, and to deposit the virgin gold upon a sliding floor underneath. The machine was to be set in motion by the irresistible force of "the pressure from without," and 1000 pounds-weight of pure gold per diem was considered a very low estimate of its powers of production. These reasonable expectations being modestly set forth in circulars and public advertisements, and backed by the august patronage of the respectable and responsible individuals above named, the Long Range Excavator Company speedily grew into vast repute. The starving herd encamped in Stagg's Alley, flew at once to pen, ink, and paper, and applications for shares poured in by thousands. Referees were hunted up, or they were not - that is no great matter. Half a million of the shares were duly allotted; and that done, to the supreme delectation of the stags, Mr. Stickemup the broker, in conjunction with his old friend and colleague Mr. Knockemoff; fixed the price of shares by an inaugural transaction of considerable amount, at twenty-five per cent, above par, at which they went off briskly. Now were the stags to be seen flying in every direction, eager to turn a penny before the inevitable hour appointed for payment of the shares. It was curious to observe the gradual wane of covetousness in the cerval mind; how, as the fateful hour approached, their demand for profit grew small by degrees and beautifully less. From 4s. premium per share to 3s.; from 3s. to 2s.; from 2s. to 1s.; and thence to such a thing as 9d., 8d., 7d., and still downwards, till, as the hand of the dial verged upon the closing stroke of the bell, they condescended to resign their Long Range Excavators to the charge of buyers who could pay for the shares they held. The company was now fairly afloat. By the aid of 

"A few clever riggers to put on the pot,
To stir it round gently, and serve while twas hot."

the shares rose higher than had been expected. Aurophilus Dobrown sold his 50,000 at a handsome premium, and realised what he was pleased privately to term "something substantial" by the speculation. The public became enthusiastic on the subject of the Long Range Excavators, and for a few short weeks they were the favourite speculation of the market. By and by, however, a rumour began to be whispered about on the subject of the monster-machine, the stomach of which, it was secretly hinted, was alarmingly out of order, and resisted all the tonics of the engineer. It was currently reported among parties most interested, that from late experiments made, previous to embarkation, it had been ascertained beyond a doubt, that though the peristaltic apparatus digested pints with perfect ease, it yet rejected quartz - a defect which it was but too plain would be fatal to the production of gold. The effect of this rumour was most alarmingly depressing upon the value of the shares. In a few days they fell fifty per cent, below par, with few buyers even at that. At this juncture it was discovered, that one of the directors was actively bearing the market; but the discovery was not made before that disinterested personage, who had previously disposed of the whole of his original allotment at a handsome premium, had secured above 10,000 new shares at a cost of about half their upset value. A colleague openly accused him of this disgraceful traffic at a general meeting of the directors, and declared that he had not words to express his disgust at one who, for the sake of his own personal profit, could condescend to depreciate the property of his constituents. The accused retorted, and the meeting growing stormy and abusive, ended late at night with closed doors.
    A few days after, affairs again began to take a turn upwards. The failure of the engine was declared to be an erroneous and altogether unfounded report. It was boldly asserted, that the small model-engine of one inch to the foot, had actually crushed several masses of Scotch granite, and eliminated seven or eight ounces of pure metal; and these specimens were exhibited under a glass-case in the office of the company, in proof of their triumphant success. Now the shares rose again as rapidly as they had lately fallen, and honourable gentlemen who had held on, had an opportunity of turning themselves round. It is to be supposed that some of them at least did that to their satisfaction; at any rate, the respectable and responsible concoctors of the Long Range Excavator Rock- Crushing and Gold-Winning Company very soon began to turn their backs upon the public altogether. By degrees, the whole body of directors, trustees, counsel, and agents, dwindled down to a solitary clerk paring his nails in a deserted office. Shares at a discount of 60, 70, 80, 90 per cent. attested the decline of the speculation. Honourable gentlemen were reported to have gone upon their travels. The office was at first "temporarily closed," and then let to the new company for Bridging the Dardanelles on the Tubular Principle. The engine of the Long Range Excavators, according to the last report, had foundered - but whether in the brain of Crushcliff, the engineer, or on the Scilly Rocks, we could not clearly make out. The only one of the original promoters who has latterly condescended to gratify the gaze of the public, is the Baron Badlihoff, who, a few days ago made his appearance on the monkey-board of an omnibus, whence he was suddenly escorted by policeman B. 1001, to the presence of a magistrate, who unsympathisingly transferred him to Clerkenwell Jail, for certain paltry threepenny defalcations, due to a lapse of memory which our shameful code persists in regarding as worthy of incarceration and hard labour. He is now an active member of a company legally incorporated under government sanction, for grinding the wind upon the revolving principle. It is not precisely known when the first dividend on the Long Range Excavators will be declared. Sanguine speculators in the L. R. E. and the Thames Conflagration Company, expect to draw both dividends on the same day. In the meantime, the books are safe in the custody of Messrs. Holdem Tight and Brass, of Thieves' Inn; and ill-natured people are not wanting, who insinuate that they constitute the only property available for the benefit of the shareholders.
    Let us now take a glance at a snug little commercial bubble, blown into being by "highly respectable men," a private affair altogether, which never had a name upon 'Change, and was managed - we cannot say to the satisfaction of all parties - by the originating contrivers, without making any noise in the papers, or exciting public attention in any way. We will call it, for the sake of a name, "The Babel and Lowriver Steam Navigation Company." Lowriver is a pleasant, genteel little village, which has of late years sprung suddenly into existence on the coast of ---shire, and has been growing, for the last seven years, with each succeeding summer, more and more a place of favourite resort with the inhabitants of Babel. Mr. Montague Whalebone took an early liking to the place, and built a row of goodly houses by the water-side, and a grand hotel at the end of the few stumps of pitchy stakes dignified by the name of the pier. But the hotel lacked customers, and the houses wanted tenants; and the whole affair threatened to fall a prey to river-fog and mildew, when the Babel and Lowriver Steam Navigation Company came to the rescue, and placed it upon a permanent and expansive footing. Of the original constitution of this snug company, it is not easy to say anything with certainty. All we know is, that, some seven years ago, it was currently spoken of in private circles as a capital investment for money, supposing only that shares could be got: that was the difficult thing. Large dividends were to be realized by building four steamers, and running them between Babel and Lowriver. Upon the neat hot- pressed prospectus, privately and sparingly circulated - it was whispered that it was too good a thing to go a begging - appeared the names of Erebus Carbon, Esq., of Diamond Wharf; of Montague Whalebone, Esq., of Lowriver; of Larboard Starboard, Esq., ship-builder; and Piston Rodd, Esq., of the firm of Boiler & Rodd, engineers, as directors. The shares were £20 each, liable to calls, though no calls were anticipated; and it was reckoned an enormous favour to get them. Traffic in shares was discountenanced; the company had no wish to be regarded as a cluster of Speculators, but rather as a band of brothers, co-operating together for their common benefit. Of course, the necessary legal formalities were gone through - that could not safely be dispensed with.
    In spite of the difficulty of obtaining shares, a pretty large number of them got into the hands of the respectable portion of the public, and the whole were soon taken up. The boats were built by Larboard Starboard, Esq.; and the engines, as a matter of course, were put on board by Messrs Boiler & Rodd; Erebus Carbon, Esq., supplied, at the current rates, the necessary fuel; and at all hours of the day the vessels ran backwards and forwards, carrying customers to Mr. Montague Whalebone's hotel, and lodgers to the new tenements, which soon began to rise around it in all directions. Lowriver took amazingly, and rose rapidly in public estimation; the boats filled well, and the speculation promised great things. When, however, after several months of undeviating prosperity, the shareholders began to look for some return for their capital in the shape of a dividend, each one of them was individually surprised by a "call;" £5 a share was wanted to clear off urgent responsibilities. "The outfitting costs had been greater than was foreseen, and the demands upon the shareholders were not likely to be limited to the first call. The victims rushed, as they were invited to do, to the office, to inspect the accounts. The engineer was there to receive them, and, all suavity and politeness, submitted every fact and figure to their investigation. There was nothing to be found fault with - everything was fairly booked; but there was a heavy balance dead against the company. The engineer himself put a long face upon the affair, and shrugged his shoulders, and mumbled something about having burned his own fingers, &c. After this, reports soon got abroad very prejudicial to the value of the investments. Then came the winter, during which few passengers travelled to Lowriver; and with Christmas came another £5 call. People grew tired of paying twenty per cent. for nothing, and many forfeited their shares by suffering them to be sold to pay the calls. This game went on for nearly three years - all "calls" and no dividends; until at length it would have been difficult to find five persons out of the original five hundred who held shares in the Babel and Lowriver Steam Navigation Company, and there was next to nobody left to call upon.
    Years have rolled on since then. Lowriver has grown into a popular and populous marine summer residence. Mr. Montague Whalebone, who knew what he was about, having bought and leased the building-ground, has become the owner of a vast property, increasing in value every day. Larboard Starboard, Esq., is on the way to become a millionaire, and has several new boats building for the company's service at the present moment. Messrs. Boiler & Rodd have quintupled their establishment, and are in a condition to execute government contracts. Erebus Carbon, Esq., has found a market in the company for hundreds of thousands of tons of coal, and, from keeping a solitary wharf, has come to be the owner of a fleet of colliers. At this hour the company consists of six individuals - the four original projectors, and a couple of old codgers - "knowing files," who had the penetration, in the beginning, to see through the "bearing dodge," and would not be beaten or frightened off. They paid up every call upon shares, and bought others - and then, by showing a bold front, asserted a voice in the management, and crushed in to a full and fair share of the profits. They have made solid fortunes by the speculation; while the original shareholders, whose money brought the company into existence, have reaped nothing but losses and vexation in return for their capital.
    But enough, and more than enough, on the score of the delusive farces which, with pretences almost as transparent as the above, are from time to time played off for the purpose of easing the public of their superfluous cash. Let us glance briefly at a speculation of a different kind, no less a bubble as it proved, but one whose tragic issues have already wrought the wreck of many innocent families, and which, at the present moment, under the operation of the Winding-up Act, is darkening with ruin and the fear of ruin a hundred humble abodes. We have good reason to know its history too well; and we shall, in as few words as possible, present the facts most important to be known to the reader's consideration, with the view of inculcating caution by the misfortunes of others, and showing at the same time how possible it is, under the present law regulating joint-stock partnerships, for an honest man, by the most inadvertent act, to entail misery upon himself, and destitution upon his offspring.
    It is some fifteen or twenty years ago, since a company of two or three speculative geniuses issued a plan for establishing, in a delightful glen situated but a few miles from a well- known Welsh port in the Bristol Channel, a brewery upon an extensive scale. The prospectus, as a matter of course, promised to the shareholders the usual golden advantages. The crystal current which meandered through the valley was to be converted into malt-liquor - so great were the natural and artificial advantages which combined to effect that result - at one-half the cost of such a transformation in any other locality; and the liquor produced was to be of such exquisite relish and potency, that all Britain was to compete for its possession. So plausible was everything made to appear, that men of commercially acquired fortune, of the greatest experience, and of long-tried judgment, invested their capital in the fullest confidence of success. Following their example, tradesmen and employers did the same; and, in imitation of their betters, numbers of persons of the classes of small shopkeepers and labouring-men invested their small savings in shares in the "Romantic Valley Brewery." The number of joint-proprietors amounted in all to some hundreds, holding £20 shares in numbers proportioned to their means or their speculative spirit. Not one in fifty of them knew anything of the art of brewing, or had any knowledge of the locality where the scheme was to be carried out; but no doubt was entertained of the speedy and great success which was promised.
    The land was bought, the necessary buildings were substantially erected, and the three principal concocters of the scheme, one of whom was a lawyer, were appointed to manage the concern, and empowered to borrow money in case it should be wanted, to complete the plant, and to work it until the profits came in. They had every advantage for the production of a cheap and superior article: labour, land-carriage, and water-carriage, were all at a low charge in the neighbourhood, and materials, upon the whole, rated rather under than over the average. Year after year, however, passed away, and not a farthing of dividend came to the shareholders; promises only of large profits at some future period - that was all. It happened that none of the shareholders had invested any very large sums, and this was thought a fortunate circumstance, as none of them felt very deeply involved. The rich had speculated with their superfluity, and they could. bear to joke on the subject of the Romantic Valley, though they shook their heads when the supposed value of the shares was hinted at. The poor felt it more, and some of the neediest sold their single shares or half-shares at a terrible discount, while they would yet realise something. As time rolled on, several of the older proprietors died off and willed away, with the rest of their property, the Romantic Valley Brewery shares to their friends and relatives. A considerable number of them thus passed from the first holders to the hands of others, one and all of whom naturally accepted the legacies devised to them, and gave the necessary signatures to the documents which made the shares their own.
    Meanwhile, the managers went on working an unprofitable business, borrowing money on the credit of the joint proprietors; and in the face of all the advantages upon which they plumed themselves, plunged deeper and deeper into debt, until, being forced to borrow at a high rate of interest to pay for the use of former loans, they found their credit, in the thirteenth year of their existence, completely exhausted; and then the bubble burst at once in ruin, utter and complete, overwhelming all who were legally connected with it, either by original purchase, by transfer, or by inheritance. Independent country gentlemen, west-country manufacturers, and merchants of substantial capital, were summarily pounced upon by the fangs of the law, and all simultaneously stripped of everything they possessed in the world. Professional men, the fathers of families genteely bred and educated, were summarily bereft of every farthing, and condemned in the decline of life to begin the world afresh. Not a few, seized with mortal chagrin at the horrible consummation of an affair which had never been anything but a source of loss and annoyance, sunk at once into the grave. Others - accustomed perhaps for half a century to the appliances of ease and luxury, and who were the owners of hospitable mansions, the centres of genteel resort - at the present moment hide their heads in cottages, and huts, and eleemosynary chambers, where they wither in silence and neglect under the cold breath of alien charity. Some, at threescore, are driven forth from a life of indulgence and inactivity, to earn their daily bread. Young and rising tradesmen, who had had the misfortune to inherit from a relative or a patron but a few shares, or even a single one, saw themselves at once precipitated into bankruptcy. One case, for which we can personally vouch, is beyond measure distressing: a gentleman of good fortune dying, had bequeathed to each of a large family of daughters a handsome provision; shortly before the bursting of the fearful bubble, the mother also died, dividing by will her own fortune among the young ladies, and leaving to each one a few shares in the Romantic Valley Brewery. The transference of these shares to the several children made the whole of them liable to the extent of their entire property; and the whole six unfortunates were actually beggared to the last farthing, and cast upon the world to shift as they might. To detail the domestic desolation caused by this iniquitous affair, would require the space of a large volume. It has wrought nothing but wretchedness and ruin to those to whom it promised unexampled prosperity, and it is yet working still more - nor is it likely to stop, for aught that we can see, so long as it presents a mark for legal cupidity. All that could be got for the creditors has been extorted long ago from the wealthier portion of the victims; but the loans are not yet all liquidated, and the claim yet remaining unsatisfied, is now the pretext under which the lawyers are sucking the life-blood from the hard-working and struggling class of shareholders, who, while industriously striving for a respectable position, are considered worth crushing for the sake of the costs, though they will never yield a penny towards the debt.
    Besides the persons who have the settlement of affairs in their hands, the original concocters of the company are the only persons who have profited from its operations. They indeed ride gloriously aloft above the ruin they have wrought. The process by which they have managed to extract a lordly independence for themselves, from a scheme which has resulted in the destitution and misery of every other participator, is a mystery we do not pretend to fathom in this case - though it is one of by no means unusual occurrence in connection with bubble-companies of all sorts.

Charles Manby Smith Curiosities of London Life, or Phases, Physiological and Social of the Great Metropolis, 1853