But it would lead us too far from our main purpose to investigate the multifarious modes in which the millionaires of the Bourse can always block the game, and ensure advantage to themselves. Certain it is, and it is rendered evident even by our slight analysis, that the exchange is in their hands, that the great prizes in the lottery of fortune are promised beforehand to them, that, if they act with ordinary prudence, they must always be the winners and that they must ultimately realize all the profits of these financial operations, except so much as their indifference or generosity may leave to support the existence and stimulate the hopes of the small fry on which they prey. Nothing but revolution can arrest their conquests, and revolution changes rather the persons than the character of the winners.

The small fry, however, play an important part during the period of their growth. They are the gudgeons which devour each other and the stray members of the community at large, until they are either consumed by the larger fish, or become large fish themselves. Speculation may be the luxury of the wealthy capitalist, but he has and desires no absolute monopoly of the amusement. He finds his own advantage in encouraging a shoal of minnows around him. A large capital may be requisite for the security of the player, but it is not necessary for every participant in the game. Gambling of all sorts is a very democratic occupation; and an adventurer with scanty funds, but sanguine expectations, may share the chances, and is welcome to encounter the risks of the play.

Since the stakes are not usually the capitals nominally exchanged, but only the differences of price at specified terms, the amount of values actually at issue bears only a feeble proportion to the sum ostensibly involved; and with a few thousands, business may be comfortably transacted to the tune of several millions. Nay, a skilful player may continue the game, by allaying suspicion, or producing erroneous impressions in regard to himself, long after all his little capital has been dissipated. If presumptive chances are accepted as the sources of gain, presumptions, natural or suggested, may very well be employed as the principal capital in the trade. Thus shadows fight with shadows, until reality comes with the final day of settlement; and at length the phantasmagoria, which amused, enriched, or impoverished individuals, may ultimately descend as a fearful and tangible visitation upon the nations which have encouraged or tolerated the show. The phantoms, the airy squadrons, the contending hosts, which manoeuvred in the clouds of the Jewish heavens, prognosticated and were succeeded by the terrible overthrow of the city of Jerusalem.

Speculation in the funds and in public stocks possesses so many of the essential characteristics of ordinary gambling and horsejockeying, that it is scarcely necessary to mention that it has

invented similar precautions to guard against the consequences of an imprudent or unfortunate venture. Its acolytes can hedge as well as the votaries of the turf. The numerous and ingenious combinations by which loss may be prevented or diminished, and small gains be secured after large winnings have been frustrated, are very clearly expounded by Le Spéculateur à la Bourse.*

Of course, in cases where the profit or loss turns principally upon hazard; where the interest of the game is dependent, not upon the real, but upon the factitious values of the commodities professedly exchanged; and where these values may be readily affected by the artifices of the players, it would be too much to expect at all times either perfect honesty in the transactions, or a very refined sense of integrity among the various performers. A conventional morality will necessarily exist, and this will be usually respected; but that morality will itself have a tendency to introduce and encourage a low grade of principle, which will rapidly infect the whole body of society. It is not of individuals, but of the character and effects of a system, that we speak; and it would be unjust to apply to persons the censures which may be appropriate to practices publicly recognized and admired. But there is only too much justice in the remark, that "Speculation, cultivated for the sake of further speculation, without thought of any increase of production-in fine, agio for the sake of agio aloneenters into the same category with betting and gambling, not to say with cheating and theft. Speculation, so understood, is nothing more than the art, always contingent, however, of making riches without labour, without capital, without commerce, and without genius; the secret of pocketing the means of the community or of individuals, without rendering any equivalent in exchange; it is the cankerworm of production, the consuming pest of societies and States." + Speculation then ceases to be a game at which every one has the right to do only what the law does not prohibit, and may simply correct, so far as prudence may permit, the caprices of chance. It involves all the vices of trade-charlatanism, fraud, monopoly, forestalling, collusion, deception, false reports, with cheating included." A recent illustration is afforded by the conduct of an acute broker after the fall of the southern part of Sebastopol. The funds in Paris were but little affected by the first intelligence of that event. He circulated the rumour that Gen. Liprandi had surrendered; an instant rise was the consequence, and though it was only of brief duration, it probably

66

*Premiére Partie. ch. v. pp. 88-111. Le Spéc. à la Bourse. Introd. Le Spéc. à la Bourse. Introd. quately rendered by "false reports."

ii. p. 11. ii, p. 15.

Chantage" is a neologism inade

lasted long enough to ensure a handsome profit to the shrewd operator who had originated it.

This short analysis of the character of the operations in the funds, is sufficient to show the hazards and insecurity to which the prosperity of civilized communities is exposed in consequence of their effects. Large capitals-probably the largest capitals held by individuals are withdrawn from the slower and less lucrative processes of production, and are employed in what may well be considered as authorized gambling. In addition to this injury to the commuuity, the national revenues and the national capital are rendered fluctuating, uncertain, and insufficient, because their values vary with every turn in the game, and every national loan must offer a premium of some sort to the creditor, which is a loss to the people and an additional tax upon the tax-payer. Moreover, the fortunes and the resources of the State are left completely at the mercy of the financiers on 'change, and governments must be guided by their interests and wishes, not by sound principle, or true policy, or the desires of the people. The consequence is, that an aristocracy of wealth, sometimes real, more freqently imaginary, in these days, virtually controls the civilized world, and the power is the greater and the more pernicious, because it is almost impossible to detect either the measure or the exact mode of its exercise. Still, the inevitable result must be, that the welfare of the people at large, the development of industry, the expansion of a healthy commerce, and all the interests of actual production, must be subordinated to the tricks, the caprices, and the private gains of the barons of the exchange. National ruin is of course the only ultimate solution of this desperate problem; for when the interests of the many are sacrificed to the advantages of the fewwhen the public weal becomes the privileged plunder of a select class, who use it simply for the increase of their own pecuniary gains, the mainspring of national prosperity is broken, and the whole machinery of society will be arrested.

This fatal tendency will be expedited and intensified by the unavoidable dissemination, through the great body of the community, of the same principles, procedures and aspirations, which characterize the dealings of those who control the general movements of production, and reap the most brilliant profits. Speculation in the funds is an old and familiar practice, although it has been much extended and modified during the last half century, and has acquired in that period an ascendency which is portentous. But the application of the same spirit to industrial enterprises is of comparatively recent date, and has in great measure, grown out of the introduction of steam, and the vast development of commercial and industrial enterprises consequent thereon. The Russia Company, the Virginia Company, the Turkey Companies, the East India Company, the South Sea Bubble, and the Missis

sippi scheme, were anticipations of those industrial associations, which now threaten to monopolize the transactions of the world. But the earlier trading associations contemplated actual production as the main source of their expected gains; and the most of them failed, not from any inherent defect in the projects themselves, but from want of confidence on the part of both the public and the shareholders, and the absence of any harmony between them and the sentiments of the contemporary communities. They would all probably have achieved the most dazzling success in our days, because almost every one is infected with the same fever of shareholding and stockdealing, and because associated enterprise is the monomania, and perhaps the necessity of our times. But neither the South Sea device nor John Law's bank was as shadowy and unsubstantial as La Société du Crédit Mobilier in France-an institution designed to acquire, by mortgages and purchases, the profitable ownership of the products and machinery of French industry, and to pay for them chiefly by the issue of shares and the speculative profits of the gigantic enterprise. After this prospective result is attained, and the actual ownership is transferred to the society, as it must ultimately be, unless, as is highly probable, some rude jar should produce the explosion of the grand machine, we may ask what will become of the industry and the capital of France; but we shall not attempt to answer a question which should be solved by MM. Isaac et Emile Péreire, the founders of this castle of clouds.*

This society of delusive credit is, however, only one grand exemplification of the disposition now prevalent to transfer to associations all the processes of commercial activity, and to convert all property into scrip and stocks, thus seeking profit not from actual production, but from stock dealing, or the dividends resulting from the enhanced values of the shares in the speculation. For all the incorporated companies of this character, or partaking in only a slight degree of this character, furnish new materials for speculation. In many instances their stocks are regularly transferred and quoted at the Bourse; and when they have not won this high honour, they give rise to similar operations in the private rooms of inferior brokers, or on the streets. In this manner, it has happened that the questionable dealings in the funds are now extended to an

* Le Spéculatéur à la Bourse. Deuxième section, i. chap. iv., pp. 210-221. "Comme instrument de circulation et d'agiotage, l'organisation de la société générale est une conception de mâitres. ***Le Crédit mobilier peut faire l'abondance ou la rareté, le vide ou le trop-plein; c'est un gigantesque monopole hors duquel il n'y a point de salut pour le spéculateur. Tout ce qui sera en dehors n'aura plus rien à faire qu'á payer," p. 215. The fluctuations of the price of shares in this company are enormous. They have risen from 500 francs as high as 1,875 francs. The New York Express said, in September 1855, that the stock is prevented solely by the financial reputation of M. Emile Péreire, from selling at 50 per cent. discount.

indefinite number of other stocks-railroad, canal, dock, gas, insurance, land, mining, manufacturing, marine and other companies; and that the great industrial enterprises of our day are prosecuted less for the actual service which they render to production, than for the incidental gains which they offer to skilful operators by the fluctuations in the nominal value of their stocks. Thus, by a singular development of the much applauded industry of recent years, the fruits of industry are contemned as inadequate to the satisfaction of modern greed, and large profits without labour, and derivable only from the fantasy of the public mind, have become the principal object of desire. It seems almost needless to intimate that the final result of this temper and the practice which ministers to it, must be the stagnation of actual production, and the sudden dissipation of the imaginary values which have inflamed the passions of all. Speculation, even when most successful, trades on fairy gold; and, though the delusion may be prolonged by the universality of its acceptance, it must be at length dispelled by the stern action of reality.

The mischief apprehended is not confined to national debts and large companies. It is implicated, in a more virulent though less active degree, in the whole system of joint stock association. In almost every combination of this kind speculation and extraordinary gains, without labour, are the object of the original shareholders, and large perquisites and revenues, with little labour, and comparatively little capital of the managers. The whole effort, as the whole tendency, is to contrive gains disproportionate to both the labour and capital employed, and to seek incidental profits at the risk of the public, and the more simple minded of the shareholders. Profit, rather than production, is the aim contemplated. If the nature of things should permit such a system to become universal, production would cease almost entirely, and profit would be impossible. But long before the goal was reached, the profits would be gambling profits, acquired at the expense of the pro

ducers.

The establishment and multiplication of these joint stock companies operate unfavourably on those actually engaged in honest and bona fide production. The vast capitals, real or nominal, but still efficient, employed by these associations, reduce the proportion of expenses, and diminish the ratio of profit, thereby competing with the individual producer, on terms fatal to his success, and even to his subsistence. This, however, must be the consequence wherever large capitals are brought into competition with small ones, whether the former be held by individuals or corporate bodies. But this inclination of the times to operate on a grand scale to unite extensive transactions in a single enterprizecooperates with the avidity for easy and extravagant gains, in repressing the separate exertions of the individual members of the