History of Stocks and Bonds in England

Jonathan's was, especially, the Coffee House which stock jobbers frequented. Addison, in the first number of the Spectator , says, “I sometimes pass for a Jew in the assembly of Stock Jobbers at Jonathan's”; and Mrs Centlivre has laid one of the scenes in her Bold Stroke for a Wife , at Jonathan's: where, also, was subscribed the first foreign loan, in 1706.
There was a Stock Exchange hoax in the reign of Queen Anne. A man appeared, galloping from Kensington to the City, ordering the turnpikes to be thrown open for him, and shouting loudly that he bore the news of the Queen's death. This sad message flew far and wide, and dire was its effects in the City. The funds fell at once, but Manasseh Lopez  and the Jews bought all they could, and reaped the benefit when the fraud was discovered. In 1715, too, a false report that the Pretender had been taken, sent the Funds bounding up, to the great profit of those who were in the secret of the hoax.

The year 1825 was remarkable for the number of bubble companies which were floated or not, and for the dreadful commercial panic which ensued, during which over seventy banks collapsed in London, or the country. Over £11,000,000 were subscribed to foreign loans, and £17,500,000 to different companies. In Parliament there were presented 439 private bills for companies, and Acts were passed for 288. Horace Smith sings of them thus:

“Early and late, where'er I rove,

In park or square, suburb or grove,

In civic lanes, or alleys,

Riches are hawked, while rivals rush

To pour into mine ear a gush

Of money making sallies.

‘Haste instantly and buy,' cries one,

Real del Monte shares, for none

Will yield a richer profit;

Another cries—‘No mining plan

Like ours, the Anglo-Mexican;

As for Del Monte, scoff it.'

This, grasps my button, and declares

There's nothing like Columbian shares,

The capital a million;

That, cries, ‘La Plata's sure to pay,'

Or bids me buy, without delay,

Hibernian or Brazilian.

‘Scaped from the torments of the mine,

Rivals in gas, an endless line,

Arrest me as I travel;

Each sure my suffrage to receive,

If I will only give him leave

His project to unravel.

By fire and life insurers next,

I'm intercepted, pestered, vexed,

Almost beyond endurance;

And, though the schemes appear unsound,

Their advocates are seldom found

Deficient in assurance.

Last, I am worried Shares to buy,

In the Canadian Company,

The Milk Association;

The laundry men who wash by steam,

Railways, pearl fishing, or the scheme

For inland navigation.”

The first loans to Government, in a regular form, took the form of Tontines, so called from their inventor Lorenzo Tonti. A Tontine is a loan raised on life annuities. A number of persons subscribe the loan, and, in return, the Government pay an annuity to every subscriber. At the death of any annuitant, his annuity was divided among the others, until the sole survivor enjoyed the whole income, and at his death, the annuity lapsed. As an example, a Mr Jennings, who died in 1798, aged 103—leaving behind him a fortune of over two millions—was an original subscriber for £100 in a Tontine: he was the last survivor, and his income derived for his £100 was £3000 per annum. Our National Debt began in 1689—by that, I mean that debt that has never been repaid, and dealings in which, virtually founded Stockbroking as a business. The Bank of England started business on 1st Jan. 1695, and, from that time, we may date the methodical dealing in Stocks and Shares. Of course there were intermediaries between buyer and seller, and these were termed “Stock brokers.” They first of all did business at the Exchange, but as they increased in number their presence there was not desirable, and they migrated to ‘Change Alley, close by. These gentry are described in a little book, published in 1703, called, Mirth and Wisdom in a miscellany of different characters.[1]

A Stock Jobber

“Is a Rational Animal, with a sensitive Understanding. He rises and falls like the ebbing and flowing of the Sea; and his paths are as unsearchable as hers are. He is one of Pharaoh's  lean kine in the midst of plenty; and, to dream of him is, almost, an Indication of approaching Famine. He is ten times more changeable than the Weather; and the living Insect from which the Grasshopper on the Royal Bourse was drawn, never leap'd from one Place to another, as he from one Number to another; sometimes a Hundred and a half is too little for him; sometimes Half a hundred is too much; and he falls seven times a Day, but not like David, on his knees, to beg pardon for former Sins, but to be made capable of sinning again. He came in with the Dutch, and he had freed us from as great a Plague as they were, had he been so kind as to have went out with them. He lives on the Exchange, but his Dwelling cannot be said to be the Place of his Abode, for he abides  no where, he is so unconstant and uncertain. Ask him what Religion he professes, he cries, He'll sell you as cheap as any Body ; and what Value such an Article of Faith is of, his Answer is, I'll give you as much for a Debenture, as the best Chapman thereabout shall. He is fam'd for Injustice, yet he is a Master of Equity  in one particular to perfection, for he cheats every Body alike, and is Equal  in all his Undertakings. The Den from which this Beast of Prey bolts out is Jonathan's Coffee House, or Garraway's ; and a Man that goes into either, ought to be as circumspect as if in an Enemy's country. A Dish of tea there, may be as dear to him as a good Purchase, and a Man that is over reach'd in either, tho' no Drunkard, may be said to have drank away his Estate. He may be call'd a true Unbeliever, and out of the Pale of the Church, for he has no Faith. Is a meer Tolandist  in secular Concerns, at the very minute that he is ready to take up any Goods upon Trust that shall belong to his Neighbour. St Paul's  Cathedral would be a Mansion-House fit for a Deity indeed, in his Opinion, did but the Merchants meet there; and he can give you no subtantialler a Reason for liking Salter's Hall  better than the Church, than because of its being a House of Traffick and Commerce, and the Sale being often held there. He is the Child of God in one Sense only, and that is by reason of his bearing His Image, but the Devil in many, for he fights under his Standard. To make an end of a Subject that is endless; he has the Figure of a Man, but the Nature of a Beast; and either triumphs over his Fellow Adventurers, as he eats the Bread of other People's Carefulness, and drinks the Tears of Orphans or Widows, or being made himself Food for others, grows, at last, constant to one place, which is the Compter, and the fittest House for such an unaccountable Fellow to make up his Accounts in.”

[1]Also published in 1708 as Hicklety Picklety .

In  1734 an Act was passed (7 Geo. II., c. 8) entitled “An Act to prevent the infamous practice of Stock jobbing,” which provided that no loss in bargains for time should be recoverable in the Courts, and placed such speculations outside the Law altogether. It was a dead letter, but was in force till 1860, when it was repealed.

The first mention of the Stock Exchange as such, is in the Daily Advertiser  of Thursday, July 15, 1773. “On Tuesday, the Brokers and others at New Jonathan's came to a Resolution that, instead of its being called New Jonathan's, it is to be named the Stock Exchange, which is to be painted over the door.” And here they abode until, in 1801, the Stockbrokers laid the first stone of a building of their own: having purchased Mendoza's boxing room, the Debating Forum of Capel Court, and buildings contiguous to that site.

On May 5, 1803, an attempt was made to hoax the Stock Exchange, which was partially successful. On that day, at half-past eight in the morning, a man, booted and spurred, and having every appearance of having come off a long journey, rushed up to the Mansion House, and inquired for the Lord Mayor, saying he was a messenger from the Foreign Office, and had a letter for his lordship. When he was told he was not within, he said he would leave the letter, and begged the servant to place it where the Lord Mayor should get it the moment of his return; which duly happened. The letter ran thus:

“Downing Street, 8 A.M.

“To the Right Hon. the Lord Mayor,—

“Lord Hawkesbury presents his compliments to the Lord Mayor, and is happy to inform him that the negotiations between this country and the French Republic have been amicably adjusted.”

Thinking it genuine, the Lord Mayor published it, and wrote to Lord Hawkesbury, congratulating him; but the forgery was soon exposed.

Meanwhile, Consols opened at 69, and, before noon, were over 70, only to fall, when the truth came out, to 63. Of course, all transactions, that day, were made null and void. Although £500 reward was offered, nothing was ever heard of the perpetrators of this swindle.

Under date of Aug. 20, 1806, the Annual Register  says: “A most atrocious fraud was committed on a number of gentlemen at the Stock Exchange, it being the settling day, by a foreign Jew, of the name of Joseph Elkin Daniels, who has, for a long time, been a conspicuous character in the Alley. Finding that, in consequence of the great fluctuation of Omnium, he was not able to pay for all he had purchased at an advanced price, he hit upon a scheme to pocket an enormous sum of money, and with which he has decamped; £31,000 Omnium was tendered to him in the course of Thursday; in payment for which he gave drafts on his bankers, amounting to £16,816, 5s., which were paid into the respective bankers of those who had received them, to clear in the afternoon. Having gained possession of the Omnium, he sold it through the medium of a respectable broker, received drafts for it, which he cleared immediately, and set off with the produce. On his drafts being presented, payment was refused, he having no effects at his bankers.”

A hue and cry was raised after him, and he was soon discovered in the Isle of Man, whence he could not be taken without the Governor's consent. This was obtained, but there were so many similar rascals taking sanctuary in the Island, that it was not deemed prudent to execute the warrant in the daytime, and Daniels was arrested at night. Great was the uproar in the morning when the rogues found their companion had gone, and an indignation meeting was held to protest against the violation of their rights. He was brought before the Lord Mayor on 16th Sept., but, owing to some technicalities, he was let go, although he had to make his appearance at a Commission of Bankruptcy.

In 1814 there was an attempted fraud on the Stock Exchange, which was the most daring ever perpetrated. It was executed by one Charles Random de Berenger, a French refugee, and an officer in one of the foreign regiments. It was alleged that, with him, were associated Lord Cochrane, the Hon. Andrew Cochrane Johnstone, and several others. It appears from the evidence on the trial, that, early in the morning of the 21st of February, a gentleman, dressed in a grey greatcoat over a scarlet uniform, on which was a star, knocked at the door of the Ship Inn at Dover, and said that he was the bearer of very important despatches from France. This gentleman, all the witnesses swore, was Berenger.

He sent a letter, signed R. Du Bourg, Lieut.-Colonel, and Aide-de-Camp to Lord Cathcart, to Admiral Foley, the Port Admiral at Dover, advising him that he had just arrived from Calais with the news of a great victory obtained by the Allies over Bonaparte, who was slain, in his flight, by the Cossacks, and that the Allied Sovereigns were in Paris. Berenger posted up to London, which he entered, having his horses decked with laurels, in order to make a stir. It was felt on the Stock Exchange.Omnium, which opened at 27-1/2 rose to 33; but, as the day wore on, and no confirmation came of the news, they receded to 28-1/2. Business in that Stock was done, that day, to the tune of half a million of money. Lord Cochrane and others had, previously, given instructions to sell Omniums for them, on the 21st of February, to an enormous amount. One deposed that, on that date, he sold—

For Lord Cochrane £139,000 Omnium
Cochrane Johnstone 120,000 do.
do.100,000 Consols
Mr Butt 124,000 Omnium
do.168,000 Consols

And he further deposed that he always considered that any business he did for Mr Butt was to be placed to Lord Cochrane's account.

Another stockbroker sold for the same three gentlemen £565,000 Omnium. Another had sold £80,000 on their account, and yet another had had instructions to sell a very large sum for the same parties, but had refused.

In the end, Lord Cochrane and Mr Butt were condemned to pay to the King a fine of a Thousand Pounds each, and J. P. Holloway Five Hundred; and these three, together with De Berenger, Sandon, and Lyte, were sentenced to imprisonment in the Marshalsea for twelve calendar months. Further, Lord Cochrane, De Berenger, and Butt were to stand in the pillory for one hour, before the Royal Exchange, once during their imprisonment. This latter part of their punishment was, afterwards, remitted. Lord Cochrane's name was struck off the Navy List, he was expelled from the House of Commons, his Arms were taken down from his stall, as Knight of the Bath, his banner torn down, and kicked ignominiously out of Henry VII.'s Chapel in Westminster Abbey.

By very many he was believed innocent, and, on his seat for Westminster being declared vacant, he was enthusiastically re-elected. He escaped from custody, was captured, and had to serve his time. On June 20, 1815, he was told his imprisonment was at an end, if he would pay the fine imposed upon him; and, on July 3rd, he reluctantly did so, with a £1000 bank note, on the back of which he wrote:—“My health having suffered by long and close confinement, and my oppressors having resolved to deprive me of property, or life, I submit to robbery, to protect myself from murder, in the hope that I shall live to bring the delinquents to justice.”

On the very day he was released, he took his seat again in the House of Commons; and, in 1832, he received a “free pardon,” was restored to the Navy List, gazetted a rear-admiral, and presented at a Levée!

We  are apt to think that company promoters and commercial speculation are things of modern growth, but Projectors  and Patentees  (company promoters and monopolists) were common in the early seventeenth century; and we find an excellent exposition of their ways and commodities in a poetical broadside by John Taylor, the Water poet, published in 1641. It is entitled The complaint of M. Tenter-hooke the  Proiector, and Sir Thomas Dodger, the  Patentee. Under the title is a wood-cut, which represents a Projector, who has a pig's head and ass's ears, screws for legs, and fish hooks for fingers, bears a measure of coal, and a barrel of wine, on his legs respectively, tobacco, pipes, dice, roll tobacco, playing cards, and a bundle of hay slung to his body, papers of pins on his right arm, and a measure for spirits on his left arm, a barrel and a dredger on the skirts of his coat. With his fish hook fingers, he drags bags of money. This is Tenter-hooke, who is saying to his friend Sir Thomas Dodger, who is represented as a very well dressed gentleman of the period:

“I have brought money to fill your chest,
For which I am curst by most and least.”

To which Sir Thomas replies:

“Our many yeares scraping is lost at a clap,
All thou hast gotten by others' mishap.”
If any aske, what things these  Monsters be
‘Tis a
 Projector and a  Patentee
Such, as like Vermine o're this Lande did crawle,
And grew so rich, they gain'd the Devill and all.

Loe, I, that lately was a Man  of Fashion,
The Bug-beare  and the Scarcrow  of this Nation,
Th' admired mighty Mounte-banke  of Fame,
The Juggling Hocus Pocus  of good name;
The Bull-begger  who did affright and feare,
And rake, and pull, teare, pill, pole, shave and sheare,
Now Time  hath pluck'd the Vizard  from my face,
I am the onely Image of disgrace.
My ugly shape I hid so cunningly,
(Close cover'd with the cloake of honesty),
That from the East  to West, from South  to North,
I was a man esteem'd of ex'lent worth.
And (Sweet Sir Thomas Dodger,) for your sake,
My studious time I spent, my sleepes I brake;
My braines I tost with many a strange vagary.
And, (like a Spaniell) did both fetch and carry
To you, such Projects, as I could invent,
Not thinking there would come a Parliament.
I was the great Projector, and from me,
Your Worship learn'd to be a Patentee ;
I had the Art to cheat the Common-weale,
And you had tricks and slights to passe the Seale.
I took the paines, I travell'd, search'd and sought,
Which (by your power) were into Patents wrought.
What was I but your Journey man, I pray,
To bring youre worke to you, both night and day:
I found Stuffe, and you brought it so about,
You (like a skilfull Taylor ) cut it out,
And fashion'd it, but now (to our displeasure)
You fail'd exceedingly in taking measure.
My legs were Screws, to raise thee high or low,
According as your power did Ebbe  or Flow ;
And at your will I was Screw'd up too high,
That tott'ring, I have broke my necke thereby.
For you, I made my Fingers fish-hookes  still
To catch at all Trades, either good, or ill,
I car'd not much who lost, so we might get,
For all was Fish  that came into the Net.
For you, (as in my Picture plaine appeares)
I put a Swine's face  on, an Asses eares,
The one to listen unto all I heard,
Wherein your Worship's profit was prefer'd,
The other to tast all things, good or bad,
(As Hogs will doe) where profit may be had.
SoapeStarchTobaccoPipesPensButterHaye,
WineCoalesCardsDice, and all came in my way
I brought your Worship, every day and houre,
And hope to be defended by your power.

Sir Thomas Dodgers' Answer.

Alas good Tenter-hooke, I tell thee plaine,
To seeke for helpe of me ‘tis but in vaine:
My Patent, which I stood upon of late,
Is like an Almanacke  that's out of Date.
‘T had force and vertue once, strange things to doe,
But, now, it wants both force and vertue too.
This was the turne of whirling Fortune's  wheele,
When we least dream'd we should her changing feele.
Then Time, and fortune, both with joynt consent,
Brought us to ruine by a Parliament;
I doe confesse thou broughtst me sweet conceits,
Which, now, I find, were but alluring baits,
And I, (too much an Asse) did lend mine eare
To credit all thou saydst, as well as heare.
Thou in the Project  of the Soape  didst toyle,
But ‘twas so slippery, and too full of oyle,
That people wondered how we held it fast
But now it is quite slipp'd from us at last.
The Project  for the Starch  thy wit found out,
Was stiffe a while, now, limber as a Clout,
The Pagan weed (Tobacco ) was our hope,
In LeafePrickeRoleBallPuddingPipe, or Rope.
BrasseeleVarinaMeavisTrinidado,
Saint ChristophersVirginia, or Barvado ;
BermudasProvidentiaShallowcongo,
And the most part of all the rest (Mundungo [1])
That Patent, with a whiffe, is spent and broke,
And all our hopes (in fumo) turn'd to smoake,
Thou framdst the Butter  Patent in thy braines,
(A Rope and Butter take thee for thy paines).
I had forgot Tobacco Pipes, which are
Now like to thou and I, but brittle ware.
Dice  run against us, we at Cards  are crost,
We both are turn'd up Noddies,[2] and all's lost.
Thus from Sice-sinke, we'r sunke below Dewce-ace,
And both of us are Impes of blacke disgrace.
Pins  pricke us, and Wine  frets our very hearts,
That we have rais'd the price of Pints  and Quarts.
Thou (in mine eares) thy lyes and tales didst foyst,
And mad'st me up the price of Sea-coales  hoyst.
CorneLeatherPartrickPheasantRagsGold-twist,
Thou brought'st all to my Mill ; what was't we mist?
WeightsBon[3] laceMowstraps, new, new, Corporation,
RattlesSeadans,[4] of rare invented fashion.
SilkeTallowHobby-horsesWoodRed herring,
LawConscienceJusticeSwearing, and For-swearing.
All these thou broughtst to me, and still I thought
That every thing was good that profit brought,
But now all's found to be ill gotten pelfe,
I'le shift for one, doe thou shift for thyselfe.


[1]Trashy Tobacco—from the Spanish Mondóngo, paunch, tripes, black pudding.

[2]Fools: but there was also a game at Cards called Noddy, supposed to have been the same as Cribbage.

[3]Bone lace.

[4]Sedan Chairs; said to have been introduced into England in 1581, and first used in London in 1623.