Chapter 3: Stocks

Soon after the Revolution, the government needed to borrow money from its subjects at a higher rate than common interest.

  • But these loans became perpetual by various arts of government.
  • The people would have been most shocked at the thought of the taxes being perpetual.
  • Thus, the taxes were first laid.
  • When money is lent to a private person, the creditor can come upon the debtor when he pleases for the capital and interest.
  • It seems very odd that the creditor should consent that his money should never be paid up.
  • The funds rose and fell according to the government's credit, during:

  • There was still some risk of a revolution then.
  • But even in peacetime, stocks are sometimes at 10%, 20%, or even 50% below par.
  • Nobody risks losing that money by a change of government.
  • Every misfortune in war makes peace farther.

    Many big stockholders are merchants.


    Chapter 4: Stock-jobbing

    The practice of stock-jobbing is the buying stocks by time.

  • He hopes to sell these portions at profit by the rising of the stocks before they fall.
  • On the other hand, those who want to buy a stock want it to fall.
  • Because of this, our newspapers during wartime are filled with invasions and schemes that never were thought of.
  • In the language of Change Alley, the buyer is called the bull2, and the seller the bear3
  • This practice of buying stocks by time is banned by government.
  • But after the South Sea Scheme, this was thought on as an expedient to prevent such practices, though it proved ineffective.
  • Persons who game must keep their credit or else nobody will deal with them.
  • It is the same in stock-jobbing.
  • It is unnecessary to give any account of particular funds, as they are all of:
  • If the interest is not paid by the funds allotted for that purpose, it is paid out of the sinking fund.