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On the Stocks, or Public Funds.

[VOL. 4

the Edinburgh Review, which, of all demand repayment, even though they other works, is supposed by its admir- were quite certain of receiving annual ers to go to the bottom of every subject, interest, and of transmitting the right to will ordinary readers find any explana- that interest to their posterity. To remtion of the first simple principles of the edy this inconvenience, therefore, the Public Funds? It is for the instruction lender who wishes to employ the sum of such readers, then, that I would beg which he lent to government in any leave to occupy a page or two of your other way, though he cannot directly Magazine; and though I am quite a- demand repayment, is at liberty to sell ware, that my observations will cut a his bill to any body who will purchase very sorry figure beside the nervous it, and for any sum that another may declamation of Idoloclastes, or the sar- be willing to pay for it. In doing so, castic humour of Timothy Tickler, I am he merely sells to a second person the nevertheless certain, that I will render right which he himself possessed to the a very acceptable service to many, and annual interest of £5, and that second these not the least respectable of your person is of course at liberty to dispose readers,if I can throw so much light up- of his right to another in the same way. on the subject as may enable them to This transaction, in general, is called a understand the prices of the Stocks, as transfer of stock; and in the particular given in the public papers. case which I have supposed, the one is It is perhaps hardly necessary to re- said to sell, and the other to buy, a mark, that in every war in which this £100 of 5 per cent. stock. If 5 per country has been engaged since the Re- cent. be considered as a fair and equivolution, the amount of the annual taxes table interest for money lent, it is obhas been found inadequate to defray the vious, that such a bill as I have now expenses of government. To supply been speaking of, or, in other words, the deficiency, our rulers have generally that £100 of 5 per cent. stock, is just had recourse to loans, that is to say, worth £100 sterling. It is possible, they have borrowed money from such however, that in certain circumstances, individuals as were able and willing to the holder of that bill may receive more, lend it, giving these individuals a secu- or be obliged to take less for it than rity for the payment of a certain annual £100. If two or three individuals, interest. To explain the nature of this for example, have each a sum of money transaction, I shall take a very simple which they are anxious to lay out at case. Suppose, then, that £100 is the interest, but find it difficult to do so, sum which government wishes to bor- a competition will naturally take place row,and that an individual offers to lend among them to become the purchaser that sum at an interest of 5 per cent. On of the bill in question, which will alpaying down the money, the lender re- ways secure to the holder £5 of yearly ceives a bill, bond, or acknowledgment, interest. The possessor of the bill will for the amount; by which acknowledg- of course take advantage of this compement, he is entitled to draw yearly from tition and raise his price, say, to £105. the public revenue £5 of interest, but The purchaser, therefore, pays £105 on the express condition, that he is not for £100 of 5 per cent. stock, or he to demand repayment of the principal, lays out his money at an interest of £5 or sum lent, unless government is will- for every £105, which is at the rate of ing to repay it. The person who thus something more than 43 per cent. If, possesses the bill or acknowledgment, on the other hand, however, the posis said to be a holder of £100 of 5 per sessor of the bill or stock is anxious to cent. stock, and the money lent upon dispose of it, while few are willing to that bill constitutes a part of what is buy it, he will be forced to offer it for called the national debt, because it is in less than £100, say, £95. The purfact borrowed by the nation, and the chaser, in this case, pays £95 for £100 interest is paid out of the taxes. It is of 5 per cent. stock, or he lays out his obvious, however, that few persons money at an interest of £5 for every would be disposed to lend money on £95, which is at the rate of something the condition of never being allowed to more than 5 per cent. For simplicity

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of illustration, I have supposed, that their money, still it may possibly be £100 is the sum borrowed by govern- more than they can draw for it in any ment, and that of course there is just other way, while the security is better one bill to be disposed of, or transferred, than if they lent their money to private by the lender. If it be supposed, how- individuals or companies. In this case, ever, as is really the fact, that the loans the contractors would gain 5 per cent. generally amount to several millions, upon the loan, or £50,000 on the the necessity which the lenders are un- whole ten millions. If, on the other der of selling their bills, or, in other hand, however, comparatively few perwords, transferring their stock, will be sons are found disposed to lay out their more apparent. The transaction be- money at 5 per cent., the contractors tween government and the lenders, is may be obliged to offer their bills for precisely the same in the case of mil- less than £100, say, as before, £95. lions as in that of a hundred, and it is In this case, the contractors lose 5 per unnecessary, therefore, again to illus. cent. on the loan, or £50,000 on the trate the general principle of that trans- whole ten millions. It is easy to see, action. It is evident, however, that from this view of the subject, how the even the most opulent merchants, who price of stock is liable to fluctuation, are generally the lenders, cannot be from accidental circumstances. I shall supposed to have such a command not attempt to enumerate these; but it of money as to be able to advance may be worth while to point out how ten or twelve millions to government it is affected by peace and war, as these at once. When they contract for a two states of the country are generally loan, therefore; that is, when they found to have the greatest influence in agree to lend to government the sum raising or depressing the value of stock. required, they generally pay the money In the time of war, then, the price of by instalments, or partial payments, at stock is comparatively low, because, in certain intervals, say one million such a state of things, it is likely that a-month, till the whole is advanced. government will be under the necessity In the mean time they sell, or transfer of borrowing; and as every loan prothe bills or securities which they receive duces new bills, the quantity of those from government, to those who may to be disposed of, or, in other words, have money to lay out at interest, and the supply of the market, will be inwho of course will be disposed to pur- creased. The price, therefore, will fall, chase such bills, so that the sale of the for the same reason that the price of bills of the first instalment may enable corn falls after a plentiful harvest. In them to pay the second. In this way time of peace, again, the price of stock government securities or bills become is comparatively high, because, in such articles of commerce, and their price is a state of things, the taxes are likely to regulated, like that of any other article, be sufficient to defray the expenses of according to the supply and demand. government without any loans, and If we suppose, as before, that the con- consequently no new bills are to be tractors for the loan, that is, the origi- disposed of, or the supply, though not nal lenders, receive from government a positively diminished, ceases to be £100 bill for every £100 sterling that mented. For the same reason, the they lend, bearing 5 per cent. they will price of stock in the time of war is magain or lose by the transaction, accord- terially affected by the nature of the ining as they can dispose of these bills, telligence that comes from the scene of for more or less than £100. If the action. If that intelligence be unfabuyers are numerous, compared with vourable, stock will fall, because there the quantity of bills; that is, if there is a prospect either of protracted warbe a great number who are ambitious fare, or of the necessity of more vigorto have their money laid out at inter- ous exertions on the part of governest, they will be tempted perhaps to ment; in both which cases, new loans give, as was before supposed, £105 for may be necessary, and consequently a every bill; for though, by doing so, new supply of bills will be thrown into they will have only 44 per cent. for the money market. On the other hand,

aug

350

On the Stocks, or Public Funds.

on a principle of gambling; but a sense of honour, or, what is perhaps nearer the truth, self-interest, generally secures the payment of the difference, as the person who refuses to pay his loss, is exhibited in the Stock Exchange under the designation of a lame duck, a disgrace which is considerered as the sen tence of banishment from that scene of bustle and business.

[VOL. 4 should the intelligence be favourable, loss or gain. In such a case as this, it the price of stock will rise, because the is obviously A's interest that the price prospect of a successful termination of of stock should fall, and as obviously the war renders it probable that there B's interest that it should rise, between will be no new loan, and consequently the day of the bargain and that of setno new supply of stock. It is this va- tling, and hence the temptation held out riation in the price of stock that gives to both to circulate reports favourable room for the nefarious practice of stock to their own particular views. B, or jobbing. That practice consists in the buyer, is usually denominated a raising and circulating reports, calcula- Bull, as expressive of his desire to toss ted to raise or depress the price of up; and A, or the seller, a Bear, from stock, according to the particular views his wish to trample upon, or tread of the individual. If he wishes, for down. The law, of course, does not example, to sell his stock or bills, he recognise a transaction which proceeds endeavours to propagate some report or other, favourable to the issue of the war, and the establishment of peace, in or der, if possible, to raise the price of stock and if he wishes to buy, he propagates reports of a contrary tendency. It is painful to think, that this abominable system is sometimes carried on by men whose rank and station in society, to say nothing of the obligations of morality and religion, might be I have, in the preceding remarks, for expected to place them above any such the sake of simplicity, represented the disgraceful acts; but in general, I be- transfer of stock, as carried on in a lieve it is confined to men of desperate way somewhat different from that in fortune and little character, who subsist which it is really conducted. I have by a species of gambling, to which the considered the securities which governfinance system of this country has open- ment gives to those from whom money ed a wide and extensive field. I allude is borrowed, as consisting of bids, and to those men who make a practice of these bills as uniformly bearing interest buying and selling stock, without actu- at 5 per cent. To many, I have no ally possessing any; and whose trans- doubt, my observations will appear not actions, therefore, are nothing more than only sufficiently simple, but abundantly wagers about the price of stock on a silly, and as containing nothing but certain day. To explain the nature of what every body knew before. the transaction by an example, I shall I do boldly aver, that every body does suppose, that A sells to B a government not know what I have above explained, bill of £100, or a £100 of 5 per cent, and I solemnly protest against the stock, to be delivered on a certain fu- sneers and sarcasms of those who do, ture day, and that the price is fixed at because it is not for them I write, nor is £102. If, when the day arrives, the it their approbation that I care any price of stock shall have fallen to £100, thing about. I write for the instruction A would be able to purchase the bill in of plain honest country folks (who, by question for £100, while, in conse- the way, constitute no inconsiderable quence of his bargain, B would be portion of your readers), and if I can obliged to pay him £102 for it, so that assist one old lady in judging when it A would gain £2. If, however, stock is most advantageous to invest in, or had risen to £104, B would still be sell out of the funds, or save one young obliged to give only £102, so that A gentleman from blushing, when he is would lose £2; but instead of actually requested to read and explain the newsbuying and selling the stock, the bar- paper report of the stocks, I shall not gain is generally implemented by A consider my own trouble lost, or the paying to B, or receiving from him, the paper of your Magazine wasted. I am, £2, or whatever may be the sum of Sir, your obedient servant, T. N.

Now,

TH HE arts of the surgeon and the shopkeeper arranged under the same physician derive their greatest im- head with a Borgia, just as we find the provements and discoveries from the beds edible and the poisonous heads of of the sick and the dying. Physiolo- Fungus classed together in the manuals gists draw their purest lights from the of Botany? hospital and the madhouse. It becomes the psycologist, the moralist, the legislator, to follow the example, and to study with like zeal dungeons and executions, above all courts of justice, the dissecting rooms of guilt.

Nothing can be more useless, more absurd, than the manner in which bistory is commonly written. Between the strong and excited passions of the men of whom we read, and the calm meditative state of mind in which we read of In the whole history of mankind, them, there exists little sympathy. The there is no chapter more abounding in gulf between the historical subject and instruction, both for the heart and the the reader is so wide, that things which intellect, than that which contains the ought to excite in our breasts emotions annals of their transgressions. In every of a very different character, are passed great offence some great power is set in by with a far-off shudder of unconcern. motion; and that machinery which We shake the head coldly when the escapes observation in the dim light of heart should be alive and trembling. ordinary transactions, when its opera- We contemplate the unhappy being tions are commanded by some stronger who, in the moment of conceiving, planpassion, gains from their influence the ning, executing, expiating his guilt, distinctness of colossal magnitude. The was still a man like ourselves, as it delicate observer, who understands the he were some creature whose blood mechanism of our nature, and knows flowed not with the same pulse, whose how far we may venture to reason by passions obeyed not the same law analogy from one man to another with ours. We are little interested in from great guilt to small-may learn his fortunes, for all sympathy with the much from contemplating these terrible fate of our neighbour arises from some displays. remote belief in the possibility of its By those who study the hearts of men, one day becoming our own; and we are at least as many points of likeness as of very far, in instances such as these, contrast will be discovered. The same from desiring to claim any such coninclination or passion may display itself nexion. It is thus that the instruction in a thousand different forms and fash- is lost, and that what might have been ions, produce a thousand irreconcilable a school of wisdom, becomes merely phenomena, be found mixed in the tex- a pastime for our curiosity. ture of a thousand characters, apparent- We are more interested in discoverly of the most opposite conformation. ing how a man came to will and con Two men may, both in action and cha- ceive a crime, than how he perpetratracter, be essentially kindred to each ed it. His thoughts concern us more other, and yet neither of them for a mo- than his deeds, and the sources of the ment suspect the resemblance. Should former much more than the consemen, like other departments of the king- quences of the latter. Men have scru

dom of nature, be at any time so fortu- tinized the depths of Vesuvius, in ornate as to find a Linnæus, one who der to learn the cause of its burning: should classify them according to ten- Why is it that moral attract less attendencies and inclinations, how would tion than physical phenomena? Why individuals stare at the result of his la- is it that we are contented to observe bours? how, for example, should we nothing in the human volcano but its be astonished to find some quiet paltry eruption?

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Christian Wolf.

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How many a maiden might have away the little he gained from his share preserved her innocent pride, had she in the profits of the Sun. Too idle learned to view with somewhat less of and too ignorant to think of supporting horror and hatred her fallen sisters, his extravagance by speculation; too and to regard the experience as some- proud to descend from Mine Host into thing that might be useful to herself. a plain peasant, he saw only one way How many a careless man might save to escape from his difficulties-a way himself from ruin, would he conde- to which thousands before and after him scend to hear and study the history of have had recourse theft. Bielsdorf the prodigal, whom folly has already is, as you know,situated on the edge of made a beggar! If from contemplat- the forest; Wolf commenced deering the slow progress of vice, we derive stealer, and poured the gains of his no other lesson, we must at least learn boldness into the lap of his mistress. to be less confident in ourselves, and tess intolerant towards others.

Whether the offender, of whom I am about to speak, had lost all claim to our sympathy, I shall leave my reader to decide for himself. What we think of him can give himself no trouble; his blood has already flowed upon the scaffold.

Among Hannah's lovers was one of the forester's men, Robert Horn. This man soon observed the advantage which Wolf had gained over her, by means of his presents, and set himself to detect the sources of so much liberality. He began to frequent the Sun; he drank there early and late; and sharpened as his eyes were, both by jealousy and poverty, it was not long before he discovered whence all the money came. Not many months before this time a severe edict had been published against all trespassers on the forest laws. Horn was indefatigable in watching the secret motions of his rival, and at last he was so fortunate as to detect him in the very fact. Wolf was tried, and found guilty; and the fine which he paid in order to avoid the statutory punishment amounted to the sum-total of his property.

Christian Wolf was the son of an innkeeper at Bielsdorf, who, after the death of his father, continued till his 20th year to assist his mother in the management of the house. The inn was a poor one, and Wolf had many idle hours. Even before he left school he was regarded as an idle loose lad; the girls complained of his rudeness, and the boys, when detected in any mischief, were sure to give up him as the ringleader. Nature had neglected his person. His figure was small and Horn triumphed. His rival was unpromising; his hair was of a coarse driven from the field, for Hannah had greasy black; his nose was flat; and no notion of a beggar for a lover. Wolf his upper lip, originally too thick, and well knew his enemy, and he knew twisted aside by a kick from a horse, that this enemy was the happy posseswas such as to disgust the women, and sor of his Hannah. Pride, jealousy, furnished a perpetual subject of jesting rage, were all in arms within him; to the men. The contempt showered hunger set the wide world before him, upon his person was the first thing but passion and revenge held him fast which wounded his pride, and turned at Bielsdorf. A second time he bea portion of his blood to gall. came a deer-stealer, and a second time, by the redoubled vigilance of Robert Horn, was he detected in the trespass. This time he experienced the full severity of the law; he had no money to pay a fine, and was sent straightway to the house of chastisement.

He was resolved to gain what was every where denied him; his passions were strong enough; and he soon persuaded himself that he was in love. The girl he selected treated him coldly, and he had reason to fear that his rivals were happier than himself. Yet the The year of punishment drew near maiden was poor; and what was its close, and found his passion inrefused to his vows might perhaps be creased by absence, his confidence granted to his gifts; but he was him- buoyant under all the pressure of his self needy, and his vanity soon threw calamities. The moment h's freedom